December 29, 2020

Securing Insurance Regulatory Reform to Facilitate a Client’s Restructuring

We advised the Thailand group of a multinational American insurance corporation on a restructuring and a merger and acquisition transaction, wherein the client acquired a sister entity’s business, valued at about USD 90 million, in Thailand. As the proposed transaction was not provided for within existing insurance regulations in Thailand, we set out to work with Thailand’s insurance regulator, the Office of Insurance Commission (OIC) on building an appropriate regulatory framework for it.

Our initial work in this matter involved conducting extensive multijurisdictional research, as requested by the OIC, involving the regulatory frameworks of Australia, Hong Kong, Japan, Singapore, and Vietnam relating to market liberalization and relaxations on foreign shareholder limits in insurance companies. The OIC used the resultant research report to draft a regulation enabling foreign shareholding with a controlling stake, and up to 100 percent foreign shareholding, in life and non-life insurance companies in Thailand.

The promulgation of this regulation in early 2017 represented a landmark reform in the Thai insurance industry, not only paving the way for our client’s M&A transaction, but also opening the economy to greater foreign investment in general.

We also advised on the restructuring plan for our client’s broker entity, and e have since provided legal advice to our client on both the insurer and brokerage elements of the business, on an ongoing basis, on all aspects of the proposed transaction, including, inter alia, the legal implications of the transfer of insurance policies, agents, receivables, and employees, including the knock-on impact on US compliance.

The M&A ultimately proceeded following the approval of the Ministry of Finance and the OIC.

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