The Office of the Insurance Commission (OIC) Board has ordered Asia Insurance 1950 Plc to temporarily cease providing non-life insurance policies, effective from Sept 23.
The OIC board passed a resolution to this effect during its meeting on Thursday, secretary-general Suthiphon Thaveechaiyagarn said.
The decision follows the OIC’s earlier rejection of speculation the company could be closed down.
Mr Suthiphon said circumstances and evidence submitted to the registrar showed that Asia Insurance 1950 Plc was not in a financially stable position, with the provision for liabilities exceeding its assets.
Thus, there was no assurance that the firm would be able to pay its debts in accordance with its obligations to the insured and the public.
There were also late claim payments, which contravened Commerce Ministry regulations. The firm owed a huge amount in unpaid claims and this affected its operation, its reputation and credibility.
The company violated the law by offering insurance policies that did not conform to the forms and declarations approved by the registrar.
The facts and evidence made the registrar believe that Asia Insurance 1950 Plc had a status or operated in a way that could cause harm to the insured or the public.
The OIC board took into consideration circumstances and evidence and resolved to authorise the registrar to exercise power under Section 52 of the 1992 Insurance Act and its amendments and order Asia Insurance 1950 Plc to temporarily suspend non-life insurance.
The firm cannot move or sell its property. It was also ordered to urgently solve its financial and operational problems.
The insurance firm has been ordered to do the following:
1. Increase its capital or adjust its financial status to meet its obligations, provide an adequate equity ratio in accordance with the provisions within 30 days from the date of receiving the order, and report the progress every seven days;
2. Prepare a summary report of the details of the insurance policies that the company is required to payout and send a report to the OIC every working day;
3. Make a correct and complete entry of the list of compensation payments within the time given;
4. Accelerate compensation payments to the insured.