SMK files for bankruptcy protection after failing to pay massive Covid claims
Syn Mun Kong Insurance (SMK) has filed for protection with the Central Bankruptcy Court after it failed to pay a whopping THB164 billion to 1.95 million people who purchased its Covid insurance.
SMK managing director Reungdej Dusdeesurapoj informed the Stock Exchange of Thailand that the company filed for bankruptcy protection on Tuesday in accordance with the decision of its board of directors.
Reungdej said the SMK board had earlier agreed to have the company submit the bankruptcy filing and the board’s decision was sent to the Insurance Commission for approval on May 10.
Reungdej said the commission approved the decision and SMK was required to file for bankruptcy within five days of being notified, so the company submitted the filing to the Central Bankruptcy Court on Tuesday.
In the filing, the company promised to restructure its massive debt by seeking more investment funds.
SMK would also seek permission to restructure its debt by extending the payout datelines and would negotiate with some creditors to turn the debts into shares.
The lawsuit states that its restructuring plan is aimed at allowing it to repay debts to Covid insurance purchasers and to pay buyers of its vehicle, fire, and marine insurance as well as petty insurance.
SMK reportedly sold 1.95 million Covid-19 insurance policies and ended up with a massive liability of some THB164 billion.
On July 16 last year, at the height of the pandemic, the company announced it would cancel all its Covid-19 insurance policies and would return the money to buyers.
However, the Insurance Commission put a brake on the cancellation, saying SMK had to honour the policies it had sold.
At the beginning of this year, a large number of Covid insurance buyers swarmed SMK’s head office to register claims, prompting the authorities to step in to help organise registrations.
SMK promised to pay the money in installments.
Some 61,000 buyers of SMK's Covid insurance policies have joined a Facebook group to help one another monitor and seek their insured sum from the company.
