The Office of the Insurance Commission (OIC) has issued seven urgent waivers to help sustain insurance companies facing liquidity issues from the surge in Covid claims.
The measures are effective from Sept 30.
The OIC’s board of directors passed a resolution on Sept 16 to issue seven waivers to help insurance companies that are short on capital to enhance their liquidity and pay out claims as they surge.
As the pandemic situation remains severe, many non-life insurers have suffered higher than expected losses from Covid claims in a short period.
To protect customers and ensure the companies have sufficient liquidity for claim payments, the measures are expected to help companies adjust their financial status.
The measures include exempting companies from calculating capital for insurance risks from Covid insurance, allowing them to count subordinated loans as Tier 2 capital, and relaxing the minimum Tier 1 capital ratio.
The OIC will also allow companies to exclude the provision for adverse deviation in the calculation of their capital reserves.
Moreover, companies granted waivers will be allowed to use accrued premiums with an overdue period not exceeding 30 days as backup assets and in calculating capital reserves, and have more than 5% of cash and bank deposits in their liquidity management.
According to the OIC, companies eligible to apply for the waiver measures are required to have accumulated more than 500 million baht in Covid claims and have a lower capital adequacy ratio than the legal requirement from Sept 30 to June 30, 2022.
Companies that meet the criteria can file a waiver request with the OIC.
After being granted a waiver, the companies must complete a revision of their financial positions by June 30, 2022, and report the progress of the implementation every 15 days.Internet Explorer Channel Network