Two insurers get end-Jan deadlines
Thanasin Insurance and Saha Life Insurance have to complete their business restructuring plans and raise capital this month, or they will face official sanctions.
The Insurance Department has extended the deadline for the two financially strapped insurance companies to comply with the Insurance Act of 1992. Director-general Chantra Purnariksha said yesterday that the two insurers had been given to the end of this month after they failed to take corrective action by the deadline of the end of December. The department will consider taking legal action against the two companies after the end of January. Last year, five non-life insurers were forced to raise their registered capital and undertake shareholder restructuring to solve their financial crises. They are Union Prosper Insurance, Thanasin Insurance, Sampanh Insurance, Thai Medical Care and Commercial Insurance. Only one life insurer - Saha Life Insurance - was required to undergo rehabilitation. Commercial Insurance was completely shut down for failing to solve its problems. Saha Life Insurance is in a precarious position, as the department requires it to report on its restructuring progress every 15 days, while Thai Medical Care is under close observation by the department. Only Union Prosper Insurance and Sampanh Insurance succeeded in deleting their names from the department's blacklist. Management from both Thanasin Insurance and Saha Life Insurance met with Chantra last week to ask for more time. The two firms have been fined Bt1,000 a day, starting last June for Thanasin and October for Saha Life. Chantra's department is analysing the two companies' liquidity shortage by seeking cooperation from banks to reveal their financial status. In the middle of last year, the department found that those insurers could not maintain their insurance funds, as required by the Insurance Act. Non-life insurers have to maintain an insurance fund at 10 per cent of their total premiums, or no less than Bt30 million. Life insurers have to keep an insurance fund at 2 per cent of their insurance reserve, or no less than Bt50 million. Chantra said the department had monitored all insurance companies' cash flows and their payouts to policyholders to protect consumer rights. Ayudhaya Allianze CP Life was fined Bt500,000 for delaying to pay claims. Petchanet Pratruangkrai The Nation
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