The regulator thwarts Asia Insurance
No new customers because the survey finds insufficient liquidity
The Office of the Insurance Commission (OIC) ordered Asia Insurance 1950 to temporarily stop recruiting new clients from September 23 after an investigation suggested the company did not have sufficient liquidity to settle claims and a capital ratio lower than the legal requirement.
The bureau also asked the company to ensure it makes claims payments to policyholders on time, as well as to prohibit the company from transferring assets.
The previous week, the OIC released several measures to support insurance companies facing liquidity issues due to the huge increase in Covid insurance claims.
OIC Secretary General Suthiphon Thaveechaiyagarn said the office found Asia Insurance’s financial situation to be unstable, with more liabilities than assets and a lower equity ratio than prescribed by law. .
The company might not be able to repay its debts in line with its obligations to policyholders or the public because it would have insufficient liquidity to pay claims, he said.
According to the OIC statement, the late reimbursement of indemnities by Asia Insurance is considered to be a violation or non-compliance with the rules of the Ministry of Commerce regarding the payment of indemnities or the reimbursement of insurance premiums by insurance companies. non-life insurance.
The company also has many accumulated debts that affect its financial position and operations, the regulator said.
In addition to the suspension of insurance sales and the transfer of assets, the OIC ordered the company to take steps to address its financial and operational issues.
Asia Insurance must increase its capital and solvency ratio to reach the levels required by law within 30 days of the date of the order, as well as provide a progress report every seven days.
The office also asked the company to prepare a summary report gathering all the details about its insurance policies.
To ensure transparency, Asia Insurance should compile a complete and up-to-date list of existing claims and expedite the payment of claims in accordance with the conditions prescribed in the contracts.
According to Asia Insurance’s financial statements released as of June 30, the company had a cash reserve of 685 million baht, total income of 491 million and total assets of 4.87 billion.
Its direct insurance claims stood at 721 million baht, with cumulative losses of 285 million and total liabilities of 4.4 billion.
According to Suthiphon, the OIC will continue to monitor and inspect insurance companies and immediately take legal action if any wrongdoing or violation of consumer rights is detected.
The public does not need to panic as the OIC strives to ensure that policyholders receive compensation on time and that the industry as a whole is free from systemic risks, he said.