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

October 9, 2017

Thailand: New Risk Management Regulation for Insurance Companies to Take Effect in February 2018

Subscribe to Updates

The Office of the Insurance Commission (OIC) has issued notifications applicable to life and non-life insurance companies, which are intended to emphasize the importance of internal risk management in insurance companies. The notifications were published in the Government Gazette  on September 1, 2017, and will take effect 180 days later on February 28, 2018.

The notifications contain several requirements that life and non-life insurance companies must comply with:

  • A Risk Management Committee (RC) must be established, with at least one member being a director, and the others being company executives or qualified persons with an understanding of enterprise risks. The RC will be required to convene and provide a report to the board of directors quarterly. Foreign insurers in Thailand may satisfy this requirement by utilizing an RC established at their company headquarters or regional office.
  • A risk management function must be set up to manage and monitor enterprise risks and produce status reports on all risks to the company.
  • A risk officer (i.e., the head of the risk management function) must be appointed. The company must report the appointment or withdrawal of the risk officer to the OIC within 30 days.
  • A risk management framework and policy, and three-year business plan, must be submitted to the OIC annually. Potential risks arising from the business plan, and the top ten recorded risks to the company, must be mentioned in these documents.
  • An internal audit department must be assigned to monitor and assess the company’s compliance with its risk management framework and policy, and report assessment results to an audit committee or the board of directors at least annually.
  • The company must inform employees about the objectives and benefits of risk management, and provide training sessions to employees to integrate a risk management culture into everyday business operations.

It is important to note that the OIC may require any specific insurance company (or the entire industry) to perform “stress tests” on a case-by-case basis.

Related Professionals

Industries

Insurance

Location

RELATED INSIGHTS​ 

May 25, 2020
The newly amended Law on Insurance was published in the Electronic Official Gazette on March 30, 2020, and has been in effect since April 15. Existing insurers are allowed three years to comply with the new requirements, as provided in the amended law. As for insurance and reinsurance companies not yet established in Laos, new insurance business licenses remain suspended under a 2016 notification.
Read More
May 19, 2020
On May 12, 2020, Myanmar’s Insurance Business Regulatory Board (IBRB) issued Directive 4/2020—a game-changer for the insurance industry in Myanmar. Previously, reinsurance in Myanmar had only been available through the state-owned Myanma Insurance, without competition. However, when this directive comes into force on October 1, 2020, insurance companies (or cedants) will be able to obtain reinsurance from other insurers or reinsurers within Myanmar or abroad, with certain restrictions.
Read More
May 5, 2020
The Global Attorney-Client Privilege Guide, published by Lex Mundi, provides information on what constitutes attorney-client privilege in over 65 jurisdictions around the world. The Thailand chapter of the guide was written by Michael Ramirez, counsel in the dispute resolution group of Tilleke & Gibbins’ Bangkok office.
Read More
April 16, 2020
On April 15, 2020, the Lao Prime Minister’s Office issued Notification No. 481/PMO, which provides further recommendations on the implementation of PM Order No. 06/PM issued on March 29, 2020, including the extension of the earlier lockdown measures imposed in Laos to May 3, 2020, and reiterating that measures to tackle the COVID-19 pandemic should remain in effect until further notice. 
Read More