Thailand's finance minister Pichai Chunhavajira has ordered the revocation of the licence of Syn Mun Kong Insurance Public Company Limited, once a major non-life insurance provider in the country. The order took effect on 4 July 2024.
In a follow-up, the Office of Insurance Commission (OIC) named the General Insurance Fund as the liquidator of Syn Mun Kong.
The non-life insurer suffered huge losses and became insolvent as a result of massive claims made on COVID insurance policies in the early phase of the pandemic which lasted from 2020 to 2022.
In October 2022, Syn Mun Kong was instructed to correct its financial position and operations by increasing its capital and maintaining the required capital adequacy ratio within a year. However, the insurer did not increase its capital nor remedied its financial position. It turned instead to the business rehabilitation process under the Bankruptcy Act.
In December 2023, the Central Bankruptcy Court ordered a halt to the business rehabilitation. Thus, the management of Syn Mun Kong reverted to the insurer’s management. However, Syn Mun Kong had more liabilities than assets and a capital adequacy ratio that was lower than the minimum required. OIC consequently issued an order suspending Syn Mun Kong’s acceptance of new business.
In addition, Syn Mun Kong had not drawn up a plan to improve its financial position and had delayed paying claims. The insurer is deemed to be incapable of continuing its operations.
In the wake of the licence revocation, Syn Mun Kong’s policyholders and other creditors are asked to lodge their claims with the Insurance Fund within 60 days.
The fund was set up to protect policyholders by settling the insurance claims of insurers whose licences are revoked.