The Thai General Insurance Association (TGIA) has revealed that nine of its member companies are accepting transfers of insurance policies from the bankrupt Syn Mun Kong Insurance Public Company (SMK) so that SMK customers can have continuous insurance coverage.
The insurers are taking part in the “Project to Mitigate the Impact on Policyholders with Insurance Contracts with Sin Mun Kong Insurance Public Company Limited” arranged by the Office of Insurance Commission (OIC) and the TGIA.
Dr Somporn Suebthawilkul, TGIA president, stated that the group of participating insurers will help customers—who have insurance policies with SMK that have not expired—if they do not want to request a refund of premiums paid to SMK but are looking for an insurer to provide continuous protection and attention to their policies.
These customers can contact the insurance companies participating in the project to have their premiums reduced, according to local media reports. It is reported that the number of such policies is more than 800,000.
Dr Somporn also affirmed that the revocation of SMK's operating licence will not affect the insurance business as a whole.
Among the nine insurers is Thanachart Insurance which says that SMK customers can transfer their SMK policies to it via three online channels: Line Official Account, website, and Facebook.
Licence revoked
Thailand’s Finance Minister Pichai Chunhavajira revoked SMK’s licence, with the cancellation going into effect on 4 July 2024. At the same time, the OIC named the General Insurance Fund (GIF) as the liquidator of SMK.
The non-life insurer, once among the biggest in Thailand, 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. SMK had sold more than a million “Diagnosed and Pay” COVID-related insurance policies.
In October 2022, SMK 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 failed to comply with the order. 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 handling of SMK’s affairs reverted to the insurer’s management. However, SMK had more liabilities than assets, with a capital adequacy ratio that was lower than the minimum required. The OIC consequently issued an order suspending SMK’s acceptance of new business.
In addition, SMK had not drawn up a plan to improve its financial position and had delayed paying claims. The insurer was deemed to be incapable of continuing its operations.
As of 9 July 2024, SMK had total assets of over THB4bn ($114.3m) and liabilities of over THB38bn ($1.09bn). There were approximately 484,000 outstanding claims, totalling around THB32.2bn, comprising over 350,000 COVID insurance claims totalling over THB30bn and more than 127,000 non-COVID outstanding claims, totaling over THB2bn.
SMK policyholders are to file their claims with the GIF via online channels from 9 September to 7 November. The fund was set up to protect policyholders by settling the insurance claims filed with insurers whose licences are revoked.