The Finance Ministry has revoked the business licences of Southeast Insurance and Thai Insurance, effective yesterday, after the two companies were declared financially incapable of paying outstanding claims, according to the Office of the Insurance Commission (OIC).
After the closure, the OIC and the General Insurance Fund will be responsible for compensation payments of outstanding claims for the two companies, said Suttipol Taweechaikarn, secretary-general of the OIC.
He said after the OIC ordered both companies to temporarily suspend new insurance issuance and had a discussion with a shareholder representative and related groups, the regulator was informed the shareholders of the two insurers would not provide any additional financial support to the two companies.
Without any additional capital injection, the companies would fail to pay compensation on time and record claim payments as required by law. This means they are subject to licence revocation to protect the benefits of policyholders, said Mr Suttipol.
He said after revocation, only holders of Covid-19 insurance policies with lump-sum payments will be affected because policyholders of other insurance products have already been transferred to other insurers.
In this regard, the OIC set up advisory centres to receive complaints and facilitate debt repayment requests.
The OIC will provide support personnel to help receive debt repayment applications both at OIC headquarters and other provincial OIC offices throughout the country, said Mr Suttipol.
He said customers of both companies can bring documentary evidence to the OIC and file for a claim. After receiving a request, the OIC will pay for claims using reserves from the General Insurance Fund, according to the regulator.
The OIC said the closure of the two insurers will have a limited effect on the insurance industry as a whole, and confirmed that the sector remains financially stable. In addition, the OIC asked the Economic Crime Suppression Division to audit the financial activities of all executives related to the two companies, Mr Suttipol said.