The General Insurance Fund (GIF) has revised regulations to allow it to borrow more to increase liquidity in case the Office of the Insurance Commission (OIC) shuts down more insurance companies in the future, says permanent finance secretary Krisada Chinavicharana.
He said the GIF has adequate funds now of 5 billion baht and can still service insurance claims for companies shuttered by the OIC following their failure to reimburse Covid-19 policy claims for their customers.
A Finance Ministry source who requested anonymity said it is uncertain how much the GIF will borrow, but is expected to be around 10 billion baht.
The OIC has vowed to tighten its supervision to restore public confidence in the industry, which has been hit by cash crunches during the prolonged pandemic.
The non-life insurance industry has been heavily tested by a surge in lump-sum claims for Covid-19 pandemic insurance, threatening to bankrupt many local insurers.
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 claims, which spiked during the third wave of the pandemic.
The Finance Ministry decided to withdraw their business licences last year after finding the two companies were incapable of reimbursing claims for their customers.
The ministry mandated the OIC oversee the transfer of active insurance policies to other insurance companies and the GIF supervise compensation payments to policyholders who filed for claims.
In April, the ministry revoked the business licences of Southeast Insurance and Thai Insurance after the two companies were declared incapable of paying outstanding claims.
After their closure, the OIC and the GIF took responsibility for compensation payments of outstanding claims for the two companies.
