GIF looking for a loan to handle claims

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GIF looking for a loan to handle claims

Covid policyholders awaiting payments

Covid-19 policyholders file complaints with the Office of Insurance Commission (OIC) on March 15 after receiving no compensation from issuers. Nutthawat Wicheanbut

The General Insurance Fund (GIF) is seeking a loan from the government’s Caisse d’Epargne to pay Covid-19 claims to policyholders of closed non-life insurance companies, a source at the finance ministry said. requested anonymity.

The source added that the GIF is also in talks with the Office of Insurance Commission (OIC) Victims Compensation Fund for the same fundraising purpose.

The Ministry of Finance source estimates that the loan requested by GIF is around 10 billion baht.

In 2021, two non-life insurance companies – Asia Insurance and The One Insurance – were forced to close due to cash shortages induced by Covid-19 claims losses, which peaked in the third wave. of the epidemic.

As a result, the OCI – the industry regulator – had to use GIF funds to reimburse Covid-19 claims from the company’s customers.

Recently, the Ministry of Finance also revoked the business licenses of Southeast Insurance and Thai Insurance after they were declared financially unable to pay outstanding claims.

After the closing, the OCI and the GIF will be responsible for the payment of the indemnities of the outstanding claims for the two companies.

The OCI said 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 operated under the umbrella of Thai Group Holdings, part of billionaire Charoen Sirivadhanabhakdi’s diversified business empire.

The Finance Ministry source is not optimistic about GIF’s ability to repay a loan to financial institutions if it has secured loans from them.

The GIF is financed by annual contributions from insurers, at the rate of 0.25% of their premiums, which total several hundred million baht per year.

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