The Finance Ministry plans to speed up the payment of lump sum claims from Covid-19 policyholders of four dissolved non-life insurance companies, says permanent finance secretary Krisada Chinavicharana.
The General Insurance Fund (GIF) under the Office of the Insurance Commission (OIC) is responsible for payments of outstanding claims involving the dissolved insurance firms.
The fund has only paid around 5,000 policyholders out of tens of thousands of claims, said Mr Krisada.
He attributed the poky processing to a staff shortage at GIF.
As GIF chairman, Mr Krisada said he wants to outsource part of the claim payments to well-equipped private companies in order to speed up the process to 10,000 policyholders per month, up from the current rate of just 300 per month.
He insisted the GIF has adequate funding to pay out the claims, tallying 7 billion baht in cash.
However, the GIF might need to seek additional funds in the future by applying for bank loans or issuing bonds, said Mr Krisada.
Another option is the OIC injecting its own funds into the GIF, he said.
Mr Krisada said he is unsure of the total amount of Covid claims outstanding from the four dissolved insurers, but it is estimated to be tens of billions of baht.
In 2021, two non-life insurers -- Asia Insurance and The One Insurance -- were forced to close because of liquidity problems stemming from losses due to Covid-19 insurance claims, which spiked during the third wave of the pandemic.
The Finance Ministry revoked the business licences of Southeast Insurance and Thai Insurance in 2022 after the two companies were declared financially incapable of paying out outstanding claims.
Contributions to the GIF are made by insurance companies, amounting to 0.25% of their annual insurance premiums.
A ministry source who requested anonymity said earlier if the GIF needs to seek bank loans to increase its liquidity to pay the Covid claims, it was estimated the fund would take 60 years to repay the loans to banks.
While insurance companies contribute between 500-600 million baht per year to the fund, the GIF's burden from paying out Covid claims for the four dissolved insurers could exceed 10 billion baht, the source said.
