Two firms file lawsuit against OIC head
Southeast Insurance and Thai Insurance filed a lawsuit against Suttipol Taweechaikarn, secretary-general of the Office of Insurance Commission (OIC), accusing him of unlawfully forbidding insurance firms from terminating Covid insurance policies with a lump sum payment and causing serious damage to the companies.
The indictment requests the Central Administrative Court revoke the Registrar’s Order No. 38/2564 prohibiting the cancellation of the termination of the Covid insurance for non-life insurance companies, issued July 16, 2021, with retroactive effect to the issuance date and temporarily suspend the enforcement of the order before the judgment is reached.
Mr Suttipol said the court is currently considering if the lawsuit was filed within the timeframe as specified by the law.
He said the lawsuit must be filed within 90 days after the issuance of the order unless it can be argued that the case is for the benefit of the public.
Mr Suttipol said if the court agrees to try and adjudicate the case and temporarily suspends the order, over 10 million policyholders with Covid insurance will be unable to claim insurance if they are infected with Covid because the insurance companies will be allowed to terminate the policies.
He said no one is above the law. Although the law allows insurance companies to cancel insurance policies in case of a crisis, the companies shouldn’t entirely terminate the policies when there is a risk but must consider cancelling the policies on an individual basis.
If the companies cancel their policies every time there is a crisis threatening their survival, people will eventually lose confidence in the industry because such action betrays people’s trust and suggests that insurance is ineffective as a risk management tool.
Thai General Insurance Association president Anon Vangvasu said the total value of Covid insurance claims is expected to exceed 40 billion baht this year due to the new wave of infections from the Omicron variant which now stands at 7,000-8,000 cases per day.
He said there are currently about 8 million policies of Covid insurance with a lump sum payment in the system that are set to expire within June so in the meantime the claims will continue to increase.
“If 10 million more people get infected, the insurance companies will have to pay a total of over 200 billion baht in claims, so the damage could be more severe than the 2011 floods,” Mr Anon said.
In addition, it is expected that the existing insurance fund of 5.6 billion baht may not be enough to cover the loss and the industry may need additional borrowing to survive.
Mr Suttipol said despite the case, the meeting of 14 insurance firms to discuss protection and find solutions together will continue because the team has already been assigned.