Thailand’s Office of Insurance Commission (OIC) has issued a notification announcing new and updated criteria for the approval of capital reductions for both life and non-life insurance companies. The notification was published in the Government Gazette on March 6, 2024. These updates aim to reduce the time required and relax and streamline the procedures for seeking OIC approval for capital reductions. Under the notification, general approval will be granted by the OIC upon submission of an application to the registrar if the capital reduction is to be implemented by way of: Removing registered shares that cannot be sold or that have not yet been issued for sale; or Reducing the share value or the number of shares to mitigate the accumulated loss. The reduction must not affect the share ratio of the shareholders in the financial statement and must comply with relevant laws, regulations, and accounting standards. After granting written approval, the registrar will notify the OIC to arrange for registration by the company. For more details on the OIC’s notification regarding capital reductions for life and non-life insurance companies, or for any issue concerning insurance regulations in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected], Witchupong Chittchang at [email protected], Ajaree Trachukul at [email protected], Thammapas Chanpanich at [email protected], or Sireethorn Wijan at [email protected].

In December 2023, Thailand’s Office of Insurance Commission (OIC) presented draft amendments to the country’s laws for life and non-life insurance, pointing to significant modifications ahead for the laws governing insurers. These amendments primarily aim to: Elevate governance standards within the insurance industry. Support compliance with the Financial Sector Assessment Program (FSAP) of the International Monetary Fund and the World Bank. Address current regulatory enforcement issues. Harmonize governance standards for insurance businesses with those for financial institutions. The draft amendments involve changes to a wide range of regulatory areas; key changes include the following: Corporate Governance Expanding the definition of directors to include representatives of foreign insurers’ branches in Thailand. Imposing the same standards of care and obligations on “persons having the authority to manage the company” as on directors. Requiring OIC approval for appointment and reelection of directors. Expanding the list of prohibited connected transactions to include lease of property. Shareholding Requirements Requiring mandatory reporting to the OIC for individuals holding 5% or more of shares in an insurance company. Requiring regulatory approval for 10% shareholding and prohibiting exceeding the limit without OIC approval or compliance with subregulations. Dividend Payments Empowering the OIC to issue subregulations on dividend payments from both life and non-life insurance companies. Products and Distribution Permitting directors, staff, and employees to sell insurance products after obtaining relevant training from the OIC. Granting insurers discretion to set group insurance premium rates following regulations, methods, and conditions set out by the OIC without having to obtain OIC approval. Allowing insurers to underwrite foreign currency-based insurance. Allowing insurers to offer additional benefits beyond policy stipulations in compliance with the relevant OIC subregulations. Capital Fund and Finance Establishing minimum capital fund requirements of approximately THB 1 billion for non-life and THB 5 billion for life insurers. Imposing sanctions

As part of its membership in Lex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2023. This guide outlines the key factors for starting and operating a business in the Thai market. Issues covered include: Investment incentives Financial facilities Exchange controls Import and export regulations Structures for doing business Requirements for the Establishment of a Business Operation of the Business Cessation or Termination of the Business Labor legislation, relations, and supply Tax Immigration requirements This publication is part of Lex Mundi’s Country Guides series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource for planning international business strategy and researching new markets. The full Guide to Doing Business in Thailand is available through the button below.

Insurance specialists from Tilleke & Gibbins’ Bangkok office have provided an update to the Thailand chapter of Thomson Reuters’ Practical Law guide to insurance and reinsurance. The guide is a Q&A-style overview of insurance and reinsurance law in dozens of jurisdictions worldwide. The Thailand contribution provides a detailed overview of the legal framework for the insurance and reinsurance market in Thailand, covering the following issues: Market trends; Regulatory framework; Authorization for insurers and reinsurers and insurance intermediaries, exemptions and foreign insurers, fronting, legal forms, and restrictions on insurance activities; Ownership restrictions; Ongoing requirements and penalties for noncompliance; Sales and marketing; Transfer of risk; Reinsurance contracts and risks; Contracts and policies, including content requirements and common clauses, implied terms, customer protections, and standard policies or terms; Dispute resolution; Insovency; Tax; InsurTech; and Reform. Practical Law produces a number of guides to key legal practice areas around the world for business lawyers. Tilleke & Gibbins contributes many overviews to these guides for all of the firm’s jurisdictions in Southeast Asia. To read the full Thailand insurance and reinsurance chapter, please visit the Practical Law website.