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​ 

October 14, 2021
As part of its membership in Lex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2021. This guide outlines all of 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 Guides to Doing Business series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource when planning an international business strategy or researching a new market.
Read More
September 10, 2021
Thailand’s Ministry of Interior has issued new regulations requiring owners, occupants, and operators of certain types of buildings to obtain third-party life, body, and property liability insurance. The Ministerial Regulations Prescribing the Type or Category of Buildings Which Must Apply for Legal Liability Insurance B.E. 2564 (2021) were announced in the Government Gazette on September 6, 2021, and will come into effect on November 5, 2021. The new regulations, which repeal and replace similarly titled regulations from 2005, detail third-party liability insurance rules, procedures, conditions, and minimum insurance amounts for specific building types and activities. The new regulations clearly distinguish the building use phase from the construction, modification, relocation, and demolition phases. They also add a new requirement for the owner, occupant, or operator of large buildings to apply for third party liability insurance during the construction, modification, relocation, and demolition phases. Building Construction, Modification, Relocation, and Demolition When a permit for construction, modification, relocation, or demolition is granted for a building classified as a high-rise, large, or extra-large building, the owner, occupant, or operator who obtained the permit must apply for third-party liability insurance before work begins. If work is already in progress when the regulations come into effect, the permit holders will have 30 days to apply for third party liability insurance covering the remainder of the period specified in the permit. Building Usage Owners or occupiers of public assembly buildings, hotels with more than 80 rooms, entertainment venues of 200 square meters or more, and large freestanding or building-attached signboards and support structures must also apply for third party liability insurance covering accidents related to the condition or use of the structures. Owners or occupiers have 30 days from the completion of the construction, modification, relocation, or change of use of the buildings, as the case
Read More
August 2, 2021
Lawyers from Tilleke & Gibbins’ Bangkok office have authored the Thailand chapter of the 2021 edition of Chambers & Partners Aviation Finance & Leasing Guide. John Frangos, partner and deputy director of Tilleke & Gibbins’ dispute resolution practice; Santhapat Periera, partner in the firm’s corporate and commercial department; and Nuanchun Somboonvinij, senior associate in the firm’s dispute resolution group, provided the Thailand update for the publication, which covers the most important legal developments affecting aircraft lessors, lessees, and financiers in 32 jurisdictions worldwide. The guide provides in-depth details on the legal regimes affecting all aspects of aircraft sale and purchase, aircraft and engine leasing, and aircraft debt finance, including sale and lease agreement terms; taxation; lease registration and enforcement; lease assignment/novation; insurance and reinsurance; debt structuring; securities; liens; and many others that affect the day-to-day operations of leading players in the aviation industry. Chambers and Partners’ Global Practice Guides provide in-house counsel with expert legal commentary focusing on practical legal issues affecting business, and enable readers to compare legislation and relevant procedures across a range of key jurisdictions. The full Chambers & Partners Aviation Finance & Leasing Guide—including the Thailand chapter—is available for free on the Chambers and Partners website, and the Thailand chapter be downloaded as a stand-alone PDF through the button below.
Read More