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​ 

December 1, 2016
On November 29, the Office of Insurance Commission (OIC) in Thailand announced that it had approved, in principle, draft notifications that set out the criteria, procedures, and conditions for the issuing and offering for sale of both life and general insurance products through online channels.The key features of the draft notifications are as follows:   
Read More
September 2, 2016
Many people are approached by “investment consultants” selling various investment products and/or life insurance. One of the products they commonly offer is life insurance that is written to pay a benefit based on the performance of particular investments. They may refer to this as an “insurance wrapper,” or explain that the investments (stocks, bonds, mutual funds, etc.) are held “inside” the insurance. Whatever the informal description, it is important to understand that activities involving these types of products are subject to strict regulation under Thai law.
Read More
August 10, 2016
On July 1, 2016, the Vietnam government enacted with immediate effect Decree No. 73/2016/ND-CP guiding the Law on Insurance Business 2000, as amended in 2010 (Decree 73). Decree 73 replaces Decree No. 45/2007/ND-CP (and its amendments) and Decree No. 46/2007/ND-CP.Decree 73 introduces the following key changes to the reinsurance business in Vietnam:
Read More
June 24, 2016
Technological advancements are leading to innovation and disruption across a range of industries, and insurance is no exception. Self-driving cars, for example, may one day cause insurance risk to shift from car owners and drivers to car manufacturers. New approaches to insurance, such as peer-to-peer insurance, are also shaking up the industry.
Read More