The General Insurance Fund (GIF) is presenting a choice to Covid-19 policyholders by offering a discounted rate for payment now instead of waiting for future payouts.
According to finance permanent secretary Lavaron Sangsnit, instead of waiting for 10 years to claim a payment, policyholders can receive a discounted rate with immediate payment.
For example, a claimed entitlement of 100 baht may be reduced to 60 baht, he said.
The GIF is responsible for paying insurance claims for companies that went under, especially during the pandemic.
The fund is expected to pay claimants up to 1 million baht, in accordance with the law.
The fund was established as a government unit, aiming to protect policyholders owed debt payments from insurance coverage in cases where insurance firms had their business licences revoked.
Insurance companies are required to contribute 0.5% of their premiums received to the fund, which represents its revenue.
A GIF source who requested anonymity said since the fund's establishment in 2008, 14 insurance firms have had their licences revoked, with many of them during the pandemic when there were a significant number of claims under "find-pay-end" insurance policies.
This strategy led to the closure of four insurers: Asia Insurance 1950 Plc, The One Insurance Plc, Thai Insurance Plc and Southeast Insurance Plc.
As a consequence, the GIF has incurred debts on behalf of the insurance companies totalling 60 billion baht, with creditors entitled to receive payouts for up to 600,000 individuals.
The fund has only a few million baht left.
The GIF previously settled debts for three companies: Thai Medical Care Plc, Promise Insurance Co and Sajja Insurance Plc.
The fund is in the process of repaying debts for seven companies: Sampanh Insurance Co, APF International Insurance Co, Chao Phraya Insurance Plc, Asia Insurance 1950, The One Insurance, Thai Insurance and Southeast Insurance.
The GIF was approved to repay debts on behalf of companies whose licences were revoked totalling 8.51 billion baht, with the number of creditors who have received debt payments tallying 145,000 individuals.
Four more companies are being audited by external auditors, with the audits to be submitted to the GIF for further debt settlement.
The fund is responsible for about 350-400 million baht worth of debt payments to creditors per month.
The GIF has also been exploring ways to increase its revenue sources.
In addition to asking for insurance companies' contributions to be raised from 0.25% to 0.50%, the fund also submitted borrowing plans worth 3 billion baht to the Public Debt Management Office and requested government funding.