Thailand’s Office of the Insurance Commission (OIC) has said that the coverage for Southeast Insurance’s policyholders remains valid, as the firm has not yet been approved for liquidation.
The regulator’s statement came after Southeast Insurance recently said that it is planning to cease its operations, the Bangkok Post reported.
Thai Group Holdings, the parent company of Southeast Insurance, released an open letter on Jan. 26, informing the public that its board of directors has decided to terminate its non-life insurance business. The company decided to discontinue the business as it faces a huge amount of COVID-19 insurance claims.
The OIC responded that, according to Section 57 of the Non-Life Insurance Act, any non-life insurance company that wishes to cease its business must submit a request to the regulator to protect the interests of the policyholders and other stakeholders.
While Southeast Insurance has already filed a request, the regulator stressed that it has not yet given its approval, meaning that the closure is not yet legally effective, and all insurance coverage remains in place.
The OIC said that to approve the request for closure, the company must come out with rules, procedures and conditions governing the reimbursements and compensations for stakeholders. These should also detail how the company will manage or transfer existing insurance policies, notify customers and stakeholders of their legal rights, how the insurer will manage its capital reserve and assets, as well as timeframes for all important actions.
The OIC formed a team of officers from the business and investment compliance, auditing, and insurance business analysis divisions to oversee the closure process and ensure the rights of customers and other stakeholders are protected.
Southeast Insurance said that it has enough funds to pay the claims of all its customers and business partners.
