GIF seeking loan to handle claims
Covid policyholders awaiting payouts
Covid-19 insurance policyholders file complaints with the Office of Insurance Commission (OIC) on March 15 after not receiving any compensation from the issuers. Nutthawat Wicheanbut
The General Insurance Fund (GIF) is seeking a loan from Government Savings Bank in order to pay Covid-19 claims to policyholders of shuttered non-life insurance companies, says a source at the Finance Ministry who requested anonymity.
The source added that the GIF is also in talks with the Office of Insurance Commission (OIC)’s Compensate Casualty Fund for the same fundraising purpose.
The Finance Ministry source believes the loan sought by the GIF is around 10 billion baht.
In 2021, two non-life insurance companies – Asia Insurance and The One Insurance – were forced to close because of liquidity crunches induced by losses from Covid-19 claims, which spiked during the third wave of the outbreak.
As a result, the OIC – the industry’s regulator – had to use GIF funds to reimburse Covid-19 claims for the company’s customers.
Recently the Finance Ministry also revoked the business licenses of Southeast Insurance and Thai Insurance after they were declared financially incapable of paying outstanding claims.
After the closure, the OIC and the GIF will be responsible for compensation payments of the outstanding claims for the two companies.
The OIC said that the closure of Southeast Insurance and Thai Insurance would have a limited effect on the industry as a whole, and confirmed that the sector remains financially stable.
Southeast Insurance and Thai Insurance were operating under the umbrella of Thai Group Holdings, part of the diversified business empire of billionaire Charoen Sirivadhanabhakdi.
The Finance Ministry source is not optimistic about the GIF’s ability to repay a loan to financial institutions if it secured loans from them.
The GIF is funded by annual contributions from insurers, at the rate of 0.25% of their premiums, which totals several hundred million baht a year.