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Published on October 18, 2007

Sorasit Soontornkes, the Bank of Thailand's assistant governor, who is also a secretary of the NCB, said it was unclear yet if insurance companies must report information about individual debtors with insurance policies as loan collateral to NCB, the country's only credit bureau. The loans are a specific type that might need to be considered on a case-by-case basis, he said.

"If the companies have to report these debts to the credit bureau, then the data would be clearer," he said.

Sorasit said he had already advised the committee to consider the issue when it meets next month.

There are three factors - contract types, instalment conditions and accounting methods - involved in the consideration.

He said that insurance firms currently have to report to the NCB about their customers who had secured their loans by placing property assets as collateral.

Earlier, Niwat Kanjanaphoomin, chief executive officer of NCB, visited the central bank to ask for clarification of conditions about reporting information.

He said the insurance companies have approved loans for customers to pay for policies as they do not have enough money to extend the policies.

"When customers do not have money to pay the premium, the companies must find a way to lend to them based on the cash value of the policies. This would help to extend the policies and the customers' protection would be prolonged," said Niwat.

The NCB asked the central bank whether insurance firms needed to report this information. However, Niwat said the issue was different from general loans as it was like the customers borrowed their own money, and did not create any risk.

"I think the firms do not need to report the information because it is just a way to keep a customer's right of protection through their insurance policy," he said.

If reporting was required, the customers could be misunderstood by other creditors who might think they have additional financial burden, he said.

Anoma Srisukkasem

 The Nation