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​ 

April 30, 2011
This open letter from David Lyman to the clients of Tilleke & Gibbins addresses the events that unfolded in April 2009, when political demonstrations—sometimes violent—took place in Bangkok and Pattaya. Although the protests by the so-called Red Shirts attracted a great deal of media attention, life continued without serious disruption in Thailand’s capital.
Read More
April 30, 2011
Within the past two years, Thailand has experienced a number of events that have called into question the country’s political stability. In this article, David Lyman puts these events into historical perspective by looking back on the path that has led to the current situation. This article provides a thorough overview of Thailand’s recent history and explains many of the driving factors underlying the political instability of 2008. The article concludes that there is reason for optimism about Thailand’s future, with progressive development likely to return to the country.
Read More
April 29, 2011
This chapter provides an overview of the legal system and key laws for foreign companies doing business in Thailand. Presented in a question-and-answer format, the chapter examines the rules governing foreign investment, business vehicles, employment, tax, competition, intellectual property, marketing agreements, e-commerce, data protection, and product liability.
Read More
April 28, 2011
This guide provides a detailed overview of doing business in Thailand. Topics covered in the guide include investment, import and export regulations, exchange controls, tax, requirements for establishment of a business, structures for doing business, cessation or termination of a business, labor legislation, and immigration requirements. The guide provides an invaluable primer for investors new to the Thai business investment.
Read More