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September 3, 2020

Thailand Introduces Stringent Requirements for Distribution of Insurance Products

On July 31, 2020, Thailand’s Office of Insurance Commission (OIC) imposed a host of new measures aimed at regulating the issuance of insurance policies and the conduct and duties of insurance agents and brokers.

These measures are contained in two new notifications: the Notification re: Conditions Relating to the Issuing and Offering of Insurance Policies of Insurance Companies; and the Notification re: Duties of Life and Non-life Insurance Agents, Brokers, and Banks. The key provisions to note are identified below.

General Duties of Insurance Companies

  • Insurance companies must institute a quality control system for the sale of insurance policies and provision of services. This should also cover the development of new insurance products and administrative and monitoring systems for the offering of insurance products. Such systems must also be approved by the company’s board of directors.
  • If an insurance company finds that an intermediary fails to comply with the requirements of the new notifications, the company must immediately revoke the intermediary’s authority to offer insurance products for sale on behalf of the insurance company, and keep a record of any such noncompliance for the OIC’s inspection.
  • Insurance companies must comply with the OIC Notification regarding Criteria, Procedures, and Conditions for Enterprise Risk Management (ERM) and Own Risk and Solvency Assessment (ORSA). 

General Duties of Intermediaries

  • The general and specific duties of intermediaries under the new notifications are very similar to those given in previous notifications, with changes of wording for conciseness. However, the new notifications do add a new general duty as well as an exception:
  • Intermediaries are required to thoroughly study the details and coverage of insurance policies before conducting any sales, and to ensure that the insurance policies offered are suitable for each customer’s purposes, risk appetite, and ability to pay premiums.
  • Intermediaries may fix a condition for the customers to enter into an insurance contract in order to receive services, or enter into a transaction, provided that the purpose of the condition is to directly prevent a risk associated with the provision of service or entry into the transaction.

Offering Insurance Products via Employees or Staff (Face-to-Face)

  • The new notifications repeal the OIC notification regarding digital face-to-face measures during the COVID-19 pandemic. However, the new notifications also provide an exemption for face-to-face sales to be carried out digitally (e.g., by voice, video, and images), provided there is a justifiable necessity to do so and the customer in question consents to a digital face-to-face meeting. Insurance companies and intermediaries must arrange for appropriate systems and sales processes to accommodate this, such as communication records, quality control, and personal data protection.
  • For offering unit-linked or universal life insurance policies, intermediaries are required to pass the relevant training and register with the OIC in accordance with the criteria prescribed by the OIC.

Offering Insurance Products via Bancassurance

  • Upon receiving a customer’s consent, banks can now offer insurance products outside of their offices. However, banks must comply with the requirements for this, which will be prescribed by the OIC in due course.

Offering Insurance Products via Telesales

  • The new notifications also prescribe the minimum requirements for intermediaries arranging systems or procedures to carry out telesales. These include a voice recording system and storage, a do-not-call list, policies and procedures for lawful collection and retention of customers’ data, and a risk management or business continuity plan.

Receipt, Retention, and Remittance of Premiums

  • For the sale of insurance products via the digital face-to-face channel, or if the intermediaries are licensed business operators under the laws relating to the Payment System Act, the premium must be remitted directly to the company’s account.

Information Disclosure and Handling of Customer Data

  • Companies must disclose information about their intermediaries to customers, and must keep that information up to date.
  • Corporate brokers and banks must also disclose information about employees who offer insurance policies on their behalf, and must keep that information up to date.
  • Insurance companies and intermediaries must implement a system or procedure for the collection, retention, and protection of customer data in compliance with the Personal Data Protection Act B.E. 2562 (2019).


  • Any breach of the conditions specified in the new notifications is a criminal offense, with the offender subject to the penalties specified in the Non-Life Insurance Act B.E. 2535 (1992).

For advice on complying with these new regulations, or for any other information on insurance business in Thailand, please contact the Tilleke & Gibbins insurance team at [email protected], [email protected], or [email protected].

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