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

September 3, 2020

Thailand Introduces Stringent Requirements for Distribution of Insurance Products

Subscribe to Updates

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).

Penalties

  • 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].

Related Professionals

Industries

Insurance

Location

RELATED INSIGHTS​ 

April 29, 2025
On April 11, 2025, Thailand’s Office of Insurance Commission (OIC) released draft principles for two notifications for public comment, open until the end of April. These aim to amend the OIC Notifications on Guidelines for Customer Personal Data Protection for life and non-life insurance businesses, which were issued in 2021. Key Principles Both life and non-life insurance companies will be required to obtain consent for the following processing activities: Processing of general personal data: When requesting the OIC to disclose information related to a customer’s insurance policy for the purpose of underwriting or claims consideration. Processing of sensitive personal data: When requesting the OIC to disclose information related to a customer’s insurance policy for the purpose of underwriting or claims consideration; and When requesting the OIC to disclose information about a customer’s insurance fraud behavior for fraud monitoring, fraud risk management, and assessing and preventing insurance fraud risk for underwriting or claims payment. The consent for the above processing activities must be in accordance with the consent requirements prescribed by the OIC, and the disclosure of personal data must also comply strictly with the conditions set by the OIC. Life insurance companies may obtain consent for other purposes as long as they comply with Thailand’s Personal Data Protection Act B.E. 2562 (2019), and companies will be liable in the event of a personal data breach. Additional Principles for Non-Life Insurance Businesses Non-life insurance companies will be required to provide a privacy notice and a summary of the privacy notice for each type of insurance policy in accordance with the form prescribed by the OIC. The privacy notice and its summary must be provided prior to or at the time of offering insurance policies, or together with the consent form for data processing through any channels used for offering insurance.
Read More
April 1, 2025
The collapse of a building under construction in Bangkok on March 28, 2025, following a powerful earthquake in Myanmar has sparked widespread public concern about the potential financial impact on local insurers and insurance implications. The construction site was insured under a contractors’ all risks (CAR) policy, and initial reports and market speculation suggest that the event could cause serious financial strain for the domestic insurance industry. Nevertheless, local insurers connected to the site of the collapse may face limited exposure for two main reasons: Reinsurance significantly mitigates local insurers’ exposure. According to market sources, 95% of the CAR coverage for the construction site was reinsured by foreign reinsurers. This is standard risk-management practice for large-scale infrastructure and construction projects, allowing local insurers to participate in underwriting while transferring most of the liability offshore. As a result, the direct financial impact on domestic insurers is expected to be minimal, subject to the reinsurance contracts and any potential claims disputes. Potential exclusions may apply. The Thai General Insurance Association has issued an interim public advisory noting that coverage under the CAR policy may be limited or excluded altogether, pending a full investigation. CAR policies often contain exclusions for certain events, depending on how the policy is worded and the actual cause of the incident. A thorough factual and forensic investigation will be necessary to determine the true cause and assess policy applicability. For further information or assistance in reviewing CAR or project insurance coverage in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected], Witchupong Chittchang at [email protected], or Ajaree Trachukul at [email protected].
Read More
December 10, 2024
Thailand’s Ministry of Finance (MOF) has issued a new notification easing foreign shareholding and board limits for life insurers. This long-awaited update aligns with the draft notification that was previewed in May 2024, and reflects the MOF’s intention to enhance the stability and competitiveness of life insurers. Life Insurer Qualifications Life insurers may apply for permission to exceed 49% foreign shareholding or have a majority of foreign directors if: The life insurer operates in a manner that could harm the insured or the public, and either (1) the OIC has directed the company to improve its status or adjust its capital, or (2) the company’s actions may have a significant impact on the insurance industry, causing significant compensation burdens and affecting the company’s capital adequacy ratio (CAR); The life insurer’s shareholders are unable to increase capital; and The life insurer is unable to attract Thai investors to increase the capital necessary to ensure stability and the long-term operation of the business. Foreign Shareholder Qualifications To qualify, foreign shareholders must: Either be an insurance company or have at least 10 years of relevant experience in the insurance industry; Demonstrate financial stability and possess a credit rating (or have a parent company with a credit rating) of at least “A” from a reputable credit rating agency; Present a clear and comprehensive business plan to develop and promote the company’s efficiency and competitiveness in the industry; and Be able to make an investment that increases the company’s capital by at least THB 2 billion to maintain stability with a CAR of at least 250%. For more details on the MOF’s notification regarding criteria on foreign shareholding limits for life insurance companies, or on any issue concerning insurance regulations in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected], Witchupong Chittchang at [email protected], Ajaree
Read More
December 6, 2024
Thailand’s Office of Insurance Commission (OIC) recently announced two Notifications regarding Timeframe Standards for Service Level Agreements, for both life and non-life insurance companies. Under these notifications, every insurance company is required to set out clear and specific timeframes in its service level agreement (SLA) for at least the following activities: Providing information about life and non-life insurance and offering insurance policies; Underwriting and providing after-sales services; Paying compensation under the insurance policy; and Handling complaints. The timeframes described in the SLA must not exceed those specified in the insurance policy or by the relevant laws, and the SLA (which must be published on the insurer’s website) must be continually updated to reflect any changes in the timeframes. Insurance companies are required to disclose the standard timeframes for SLAs on their website by January 1, 2025, and notify the OIC through the channels and methods specified by the OIC. For more details on the OIC’s notifications on SLA timeframe standards, or on any aspect of 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].
Read More