Myanma Insurance to pay indemnities to Htoo Group
THE fire incident at Kandawgyi Palace Hotel will be classified as being 100 percent burnt-down and indemnities will be given within this month, U Lwin Oo, deputy general manager from Myanma Insurance, told The Myanmar Times.
Yangon’s iconic Kandawgyi Palace Hotel, owned by U Tayza’s Htoo Group, was destroyed by a fire in the early hours of October 19, and it had bought insurance from Myanma Insurance and private insurer Aung Thisar Oo Co.
The Htoo Group, which owns Kandawgyi Palace Hotel, has bought insurance worth almost K1.5 billion for the hotel. Two policies worth K855 million and K75 million are from state-controlled Myanma Insurance while one more policy, worth K523 million, is from private insurer Aung Thitsar Oo Co.
After inspection, it was found that the buildings for which insurance was bought from Myanma Insurance had been completely burnt down while those under insurance cover of Aung Thitsar Oo Co. had been partially affected from the fire, according to U Lwin Oo.
Therefore, Htoo Group will be entitled to indemnities from Myanma Insurance and they will not claim compensation from Aung Thitsar Oo Co.
As the buildings insured by Myanma Insurance had been already specified as being wholly burnt, indemnities will be paid as soon as possible after calculations, U Lwin Oo said.
“The hotel has been classified as 100pc damaged. The building can no longer be used and it must be destroyed. However, the leftover from fire will have to be appraised for their value,” he said.
Burnt-down big teak pillars are useless but remnants like nails, nuts, bolts and broken bricks can be sold and value has to be calculated and deducted from indemnities, one official from fire and engineering, the insurance section said.
“No claim bonus will not be entitled if damages are claimed for distant partial burning of the building. No claim bonus is a 25pc discount on current-year premium. If they ask for small amount of maintenance, they cannot get that bonus,” U Lwin Oo said regarding insurance at Aung Thitsar Oo Co.
At present, engineers from Myanma insurance and Htoo Group are working on calculating the value of remaining properties after the fire and it will be followed by a negotiation meeting and then exact amount of indemnities can be known, he continued.
It is possible to know the amount in a week’s time and once the amount is specified, payment will shortly be made, he added.
With regards to insurance policies, some are under U Tayza’s name and some under the hotel’s.
Kandawgyi Palace Hotel is a highend hotel which was built mostly with teak wood and was decorated with many Myanmar traditional handicrafts. It took firefighters more than three hours to extinguish the fire at the hotel.
It is the largest fire disaster involving a hotel in the 60 years for which Myanma Insurance has been in business. Prior to the Kandawgyi Palace Hotel fire, only small-scale fires involving machineries took place in the hospitality buildings, U Lwin Oo said.
The Htoo Group plans to reconstruct the Kandawgyi Palace hotel.