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Sampanh Vows to Be Compliant in 60 Days

Aug 7, 2007

By Phusadee Arunmas, Bangkok Post, Thailand

Aug. 8--Cash-strapped Sampanh Insurance, which was ordered to suspend operations in mid-July, yesterday submitted a business rehabilitation plan and pledged to fulfil it within 60 days.

Among other things, the company pledged to settle value-added tax in an undisclosed amount with the Revenue Department within this month, according to Chantra Purnriksha, the director-general of the Insurance Department.

The plan also requires the company to repay outstanding claims worth 182 million baht to 2,426 customers and settle debts worth 444 million baht owed to authorised garages starting from Aug 14. Mrs Chantra said the company had informed regulators that negotiations with five potential foreign partners were under way and it promised to wrap up a deal ahead of the 60-day deadline.

She said the prospective foreign investors were from Qatar and other developed countries.

Earlier, Qatari firms including Al Daicel, an industrial conglomerate, were reported to be preparing to commit $36 million for an undisclosed number of shares of Sampanh Insurance, but no deal has been signed yet.

Sampanh Insurance is among three firms that have been ordered to shore up their finances. The others are Thanasin Insurance and Saha Life Insurance, a small firm controlled by a group of co-operatives.

Sampanh Insurance has total debts worth 672 million baht, excluding its capital fund shortfall of 777 million baht.

Capital funds are a portion of assets in excess of the insurer's liabilities in accordance with their appraised value.

Under the Non-Life Insurance Act, general insurers must maintain capital funds equivalent to 10 percent of earned premiums, or at least 30 million baht.

Sampanh is thus required to bring in new capital or sell existing assets to generate at least one billion baht to ease its financial constraints.

During this period policyholders can continue to file claims with the company and anyone having problems about claims can deal directly with the Insurance Department or its provincial offices, Mrs Chantra said.

She said regulators would take legal action against the firm if it failed to fulfil the plan it has presented.

However, she did not specify whether Sampanh would have its licence revoked if it failed to meet its 60-day deadline.

Sampanh is the country's fourth-biggest auto insurer among 74 companies. Last year it reported written direct premiums of 3.537 billion baht.

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Copyright (c) 2007, Bangkok Post, Thailand

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