You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

March 4, 2019

Thailand to Introduce its First Marine Insurance Bill

Subscribe to Updates

In January 2019, the Thai Cabinet agreed to propose the Marine Insurance Bill, as prepared by the Ministry of Finance, to the National Legislative Assembly for consideration. When the bill has been passed by both the House of Representatives and the Senate it will be passed to the monarch to be signed into law, and then published in the Government Gazette  before coming into force.

Thailand does not currently have specific laws governing marine insurance, and the market therefore commonly adopts or refers to English law as the governing law for marine policies. This bill, once enacted, will be used to govern marine insurance in Thailand, and it therefore sets out specific terms in relation to marine insurance (that could also be used for insurance on other modes of transportation if specifically agreed by relevant parties).

The key points introduced in the bill are as follows:

  • Definitions of fundamental terms in relation to marine insurance, and the enforceability of marine insurance contracts in the transportation of goods by sea within Thailand and internationally.
  • The rights and duties of the insurer and the insured, including, inter alia:
    • duties of the insured in presenting risks and disclosing information in the case of commercial marine insurance contracts;
    • rights of the insurer in proving that the insured did not comply with their duty in presenting the risks for non-commercial marine insurance contracts; and,
    • rights of the insurer when the insured acts fraudulently.
  • Specifications of content that must be shown in the marine insurance policy, e.g., signatures and seals, including the ability of the insured to amend the representation before any damage is incurred.
  • The method of calculating the insurable value of the ship, freight, goods, and other insured objects, as well as specific definitions and criteria relating to insurable interest in marine insurance.
  • The criteria to be met for damages that will be covered by marine insurance—and damages that will not be covered, such as willful misconduct by the assured and loss caused by delay—including definitions of total loss and partial loss.
  • The principles and duties for premium payment.
  • The method of calculating the insured’s entitlement to compensation where the insured object is subject to total loss or partial loss, and the compensation method in the event of double insurance.
  • The prescription period for a compensation claim under a direct insurance contract and a reinsurance contract (set at two and six years respectively in the current draft).

Once enacted into law, the new regulations would improve the economic potential of the Thai marine insurance and transportation industries, strengthening the ability of companies in those sectors to compete internationally. 

We will continue to monitor the status of this bill closely and provide updates as they become available. For more information on insurance law, please contact Tilleke & Gibbins at [email protected] or on +66 2056 5555.

Related Professionals

Industries

Insurance

Location

RELATED INSIGHTS​ 

September 19, 2022
Tilleke & Gibbins’ insurance specialists in Cambodia, Laos, Myanmar, Thailand, and Vietnam have contributed to the Subrogated Recoveries – Asia Pacific guide produced by RPC Premier Law Firm. The guide addresses how insurers can recover indemnifiable losses. For each jurisdiction in the Asia Pacific region, the guide addresses the following topics: Local legal framework on subrogation; Insurers’ right to subrogate; Investigations prior to subrogated proceedings; Limitation period for subrogated action; Responsibility for costs in subrogated action; Enforcement of judgements for insurers; and Subrogated actions against co-insured parties. The Subrogated Recoveries – Asia Pacific guide is available below.
Read More
September 1, 2022
On June 2, 2022, Thailand’s Office of Insurance Commission (OIC) issued Notification No. 6 Re: Investments in Other Business Operations for both life and non-life insurance companies. The two notifications, which took effect upon issuance, strengthen the OIC’s supervision of investments by insurance companies, with a focus on basic infrastructure relevant to the promotion of business competition and sustainability, and also allow and regulate additional investment types. Internal Governance of Investment Activities An insurance company’s board of directors is required to appoint a credit committee when engaging in credit activities. These activities include providing loans (excluding personal loans to employees or loans made under a guarantee by its insurance policies), car leasing services, avals for bills of exchange, and letters of guarantee for project performance. The credit committee has the following duties: Preparing the credit policy framework for the credit activities described above for further board approval; Supervising the credit activities; Overseeing good corporate governance, transparency, and prevention of conflict of interest in relation to credit activities; Ensuring that the work system, manpower, and data in relation to credit activities are sufficient; and Regularly reporting to the board of directors regarding credit activities. Credit policies must at least cover: Procedures and conditions for credit transactions. These include risk management, internal controls, data storage, and written reporting requirements. The procedures and conditions must comply with the relevant OIC regulations and the Bank of Thailand’s minimum standards for financial institutions. Persons responsible for operations relating to credit work, risk management for credit transactions, and verification of credit transactions. These roles include (1) the credit analyst, (2) the person who approves appropriate credit transactions, (3) the verifier of work accuracy after a credit transaction is approved, (4) the person in charge of reporting credit transaction risks, and (5) the person responsible for
Read More
November 24, 2021
Attorneys from Tilleke & Gibbins have provided the latest update to the Thailand contribution to Doing Business in…, a Q&A-style guide published by Thomson Reuters Practical Law that presents an overview of the legal framework for doing business in 63 jurisdictions worldwide. The Thailand chapter of the guide outlines Thailand’s legal system and key laws applicable to foreign companies doing business in the country. The chapter specifically covers the following main topics: Legal system: Thailand’s court system and codified legal system. Foreign investment: Lists of reserved business activities, restrictions on doing business with certain jurisdictions, exchange controls and currency regulations, and grants and incentives available to investors. Business vehicles: Ordinary partnerships, registered ordinary partnerships, limited partnerships, private limited companies, and public companies. Environment: Main laws and regulations, factory operation. Employment: Laws, employment contract requirements, work permits, and termination and redundancy. Tax: Taxes on employment, tax and nontax resident employees and businesses, corporate income tax, value added tax, special business tax, municipal tax, stamp duty, dividends, interest, intellectual property royalties. Competition: Important aspects of Thailand’s regulatory regime surrounding competition, centered around the updated Trade Competition Act. Antibribery and corruption: Laws, compliance requirements, regulatory authority. Intellectual property: Patents, trademarks, registered and unregistered designs, and copyright. Marketing agreements and advertising: Regulation of marketing agreements, Thailand’s Consumer Protection Act, direct marketing, role of the Consumer Protection Board and Food and Drug Administration. E-commerce: E-commerce laws and regulations, marketing and sales via online platforms. Data protection: An outline of Thailand’s Personal Data Protection Act. Product liability: Procedures and regulations for product liability and product safety, including the Unsafe Goods Liability Act and the Consumer Case Procedure Act. Product liability: Key regulatory authorities for trade competition, environmental issues, and financial services. To browse, download, or print the Thailand chapter, please visit the Practical Law website.
Read More
October 25, 2021
Michael Ramirez, a counsel in Tilleke & Gibbins’ dispute resolution group in Bangkok, has updated the firm’s contribution to the Global Attorney-Client Privilege Guide, published by Lex Mundi. The newly expanded guide provides information on what constitutes attorney-client privilege in over 70 countries around the world. The Thailand section of the guide contains in-depth information on the function and applications of attorney-client privilege in Thailand (or, as explained in the guide, an equivalent concept enshrined in Thai law), including coverage of the following topics: Privilege in corporations Common interest doctrine Litigation funding Crime-fraud exception Work product doctrine/litigation privilege Other privileges including mediation, accountant-client and settlement negotiation The interactive guide features expert contributions by Lex Mundi member firms from jurisdictions worldwide. Readers can browse the contributions, generate country-specific reports, and compare attorney-client privilege in multiple jurisdictions. For more information, please visit the Lex Mundi website.
Read More