- The regulator
The Office of Insurance Commission, under the supervision of the Ministry of Finance (OIC) regulates insurers, brokers and agents.
- Subsidiary/Branch
Both are permitted for an insurer; however the OIC's current policy is not to grant new licences for either on the basis that the insurance company market requires consolidation.
Brokers must establish a legal entity in Thailand.
Only individuals can be insurance agents.
- FDI restrictions
Insurance and reinsurance companies:
- up to 25 per cent less one share permitted
- up to 49 per cent with approval of the OIC
- above 49 per cent with approval of the Minister of Finance
Brokers can be 100 per cent foreign owned, but if > 49 per cent they need a licence under the Foreign Business Act.
- Control approvals
A change of ≥ five per cent shareholding must be notified after the event to the OIC.
A change in directors must be approved by the OIC.
- Minimum capital
| Life insurer/reinsurer: | THB500 million |
| General insurer/reinsurer: | THB300 million |
THB32.7 = USD1 at 1 January 2014
- Risk based capital
Yes – Eligible Capital/Risk Capital Requirement x 100 per cent = minimum capital requirement.
Eligible Capital is equity, share premium, retained profits, preference shares, etc. less certain deductions. Assets are valued at market value with adjustments.
Risk Capital Requirement is liabilities (calculated on a best estimate basis) plus capital charges for insurance risk, market risk, credit risk, concentration risk.
Solvency margin: minimum capital requirement of 140 per cent (effective from 1 January 2013).
- Group supervision
No.
- Policyholder protection
Yes. The General Insurance Fund and the Life Insurance Fund (funded by industry levies) assist policyholders of non-life and life insurers respectively in the event of insolvency or revocation of insurance licence. Payments are limited to THB1 million.
Prior to claiming from the relevant fund, policyholders must first bring a claim against the insurer and, in insolvency proceedings, the policyholder will have priority over other creditors against any securities and unearned premiums reserves of the relevant insurer placed with the OIC.
- Portfolio transfers
No regime
- Outsourcing
Insurer may not outsource "core" functions, which include: risk underwriting & issue of policy, collecting premiums, accepting or rejecting claims and loss adjustment. With specific approval of the OIC, insurer may outsource certain "support" functions, which include: paying claims under limited circumstance. Insurer may freely outsource "other" non-core administrative functions, which include: Internal audit, accounting, IT and advisory services in respect of claims and back office functions.
*as at 1 January 2014
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
