Days after the closure of Indochine Insurance, one of Cambodia’s leading private insurers, employees, policyholders and government officials expressed uncertainty and confusion over the company’s fate.
Indochine, which, after failing to meet the government’s legal requirement of at least $7 million capital investment, had its bank accounts frozen more than two months ago, finally declared insolvency on Friday, leaving behind 55 employees, a rented office and a $100,000 deposit at the National Bank of Cambodia.
As of Tuesday, the Ministry of Finance had not decided how to deal with the company, said Mey Vann, deputy director of the ministry’s Finance Industry Department.
But Mey Vann was clear about who is responsible for any unpaid claims or refunded premiums. Indochine is a private company, he said, “so it has to be responsible for all compensation.”
He said the situation was made difficult because Cambodia has no bankruptcy law, leaving the Finance Ministry to sort things out.
And to complicate matters, the ministry has been unable to
contact Indochine Company Director Philippe Lenain, Mey Vann said.
“Our staff went to [Lenain’s] home and the door was locked,” he said.
Contacted by mobile phone Tuesday evening, Lenain said he was very busy before hanging up.
Lenain has previously criticized what he called the excessive investment requirement and hinted at a plan to undermine Indochine and benefit the state-run insurance company Caminco. Indochine has operated in Cambodia for more than 10 years.
Late last month Indochine announced plans to merge with France’s largest insurance company, Macif, in a bid to secure the required capital investment.
“However the Ministry of Economy and Finance decided that the investment came too late,” Indochine said in a statement released Friday.
The statement also referred all “claims or complaints” to the Ministry of Finance.
“Under the provisions of the Prakas issued by the Ministry of Economy and Finance, Indochine insurance’s assets, including a [$100,000] deposit to the National Bank of Cambodia, will be used to liquidate the company,” the release read.
The problem is that the company does not appear to have many assets other than the deposit, Mey Vann said.
He said the Finance Ministry must now decide whether to use Indochine’s deposit to hire a foreign liquidating company, or to assume the task itself and use the deposit to compensate former clients.
“Hiring a liquidating company may cost a lot,” he said, “but if we do it ourselves, we might face challenges from clients.”
According to the government’s figures, Indochine turned over about $3 million a year, Mey Vann said. His ministry is trying to locate some of that money.
Kim Saly Soulevann, an underwriting manager for Indochine, said she has no idea where the company’s management has gone since the office closed.
“All [of the former employees] are waiting for our salaries— including me; I haven’t been paid,” she said.
Ru Chai Lee, national personnel manager for the NGO World Vision, which held an Indochine policy, tried to get details about the insurance company’s closure, but, like other policyholders, found nothing but a shuttered office on Tuesday.
“We will watch to see what becomes of this company,” he said.
But Ta Pao, a car owner with Indochine insurance, said he was not that concerned.
“I checked to see if this insurance company was healthy.” he said. “It should not be a problem.”
Sue Bailey, of UK-based JBI International Insurance, said Tuesday that the demise of Indochine—which was an agent of JBI’s underwriting agent, Journeyman Services Ltd—would not impair coverage of existing health insurance policies issued by the company.
“Either Journeyman or we are in contact with clients direct[ly] with regards to their health insurance policies. I think the difficulties faced by Indochine may have been apparent to some clients already and one group in particular had decided to deal with us direct,” Bailey wrote in an e-mail message from the UK on Tuesday. Baily said concerned policyholders should contact JBI directly.
