Regulators have ordered Chao Phraya Insurance Plc to temporarily suspend selling policies to new customers after it failed to maintain the required capital adequacy ratio.
The Office of the Insurance Commission issued the order on Friday. It said that apart from inadequate capital, the company’s liabilities exceeded assets and its balance sheet, financial statement and operating results were not always inaccurate.
“The company hid facts about its financial position or operations by underbooking liabilities from reinsurance and allowances for claims, resulting in the OIC not being able to know its actual financial position and cannot be assured the company could repay its obligations to the insured or the public,” read the order signed by OIC president Suthiphon Thaveechaiyagarn.
To rectify the situation, Chao Phraya must maintain its capital adequacy ratio as required by law and submit its financial position estimates quarterly starting from the first three months of this year.
It is also required to fix its accounting flaws and improve its internal system involving accounting, finance, claims management, risk management and internal control. The company must complete the measures by June 29, the order says.
Chao Phraya operates auto, fire, marine and general insurance businesses.