GIF expedites Covid-19 payouts amid financial strain
The General Insurance Fund (GIF) proposed an expedited payment option for Covid-19 policyholders, where they can avail of an immediate reduced payout rather than wait for a decade for the full claim. This could mean receiving 60 baht now instead of 100 baht in the future, according to Finance Permanent Secretary Lavaron Sangsnit.
Governmental body GIF was formed to safeguard policyholders against insolvencies in the insurance sector, ensuring owed debt payments from insurers whose business licences were revoked. The fund is financed by insurance companies, who contribute 0.5% of their premiums.
GIF’s role has been particularly critical during the pandemic, with 14 insurance companies losing their licences since its establishment in 2008. A significant number of these occurred during the pandemic, with claims soaring under the find-pay-end insurance policies. The fund has had to bear the brunt of these failures, inheriting debts to the tune of 60 billion baht, impacting around 600,000 individuals.
The fund has already settled debts for three firms, including Thai Medical Care Plc, Promise Insurance Co., and Sajja Insurance Plc. It is currently handling repayments for seven companies, including Sampanh Insurance Co., APF International Insurance Co., and Chao Phraya Insurance Plc, among others.
To date, the GIF has been authorised to settle debts totalling 8.51 billion baht on behalf of affected companies, with around 145,000 individuals receiving their due payments. The fund is also overseeing external audits for four more companies, whose results will determine further debt settlements.
Despite these efforts, the fund’s resources are dwindling, with only a few million baht remaining in its coffers, yet it is responsible for monthly debt payments of approximately 350 to 400 million baht. To mitigate this, the GIF has proposed increasing insurance companies’ contributions from 0.25% to 0.50%.
Furthermore, it has submitted plans to borrow 3 billion baht to the Public Debt Management Office and has also requested government funding, reported Bangkok Post.
