The Office of the Insurance Commission (OIC) will not lift its previous order which banned insurance companies from canceling their active Covid-19 insurance policies, the office said on Monday.
“We insisted that we will not revoke the order because it will impact consumers and deprive the rights of the insured,” said Suthiphon Thaveechaiyagarn, OIC’s secretary-general, at press conference.
The Thai General Insurance Association (TGIA) asked government regulators last week to revoke the order because of rapidly increasing claim payments, especially from lump-sum payments policies as they believe the development could impact companies’ financial stability.
Between early 2020 and August 2021, the total number of Covid-19 policies written was 39.86 million, with premiums received at 11.25 billion baht.
By the end of October, insurance companies paid up more than 30 billion baht in Covid claims, up from 9.43 billion baht in August. TGIA added that these numbers have the potential to increase even more.
The OIC said they will not lift the order, but companies will be allowed to offer new policies that would replace its lump-sum payment policy. However, the consumer must give consent for the policy change first.
“The insured cannot be forced to change their policy and if they have been forced to change without their consent, they can file a complaint with the OIC,” Suthiphon noted.
According to the OIC, insurance companies have already sold around 40 million Covid policies. Of the 40 million, 10 million were lump-sum payments and seven million policies are still active today.
Last week, the OIC approved liquidity enhancement measures for Syn Mun Kong Insurance (SMK), Thai Insurance, and One Insurance, to help them pay outstanding Covid insurance claims. The OIC has approved the measures, but has yet to implement full bailouts.
In July, SMK tried to terminate its Covid-19 insurance contracts with lump-sum payments before it was blocked by the OIC’s order.
The One Insurance was the latest to ask the government regulators to cancel its Covid-19 insurance contracts with lump-sum payments. They made this request before the OCI’s announcement that it will maintain its previous order.