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​ 

March 11, 2020
The latest update to the Laos chapter of Thomson Reuters’ Practical Law guide to insurance and reinsurance has been published, written by legal practitioners from Tilleke & Gibbins’ Vientiane office. The guide presents a Q&A-style overview of insurance and reinsurance laws and practices in major jurisdictions around the world.
Read More
January 28, 2020
In late 2019, Thailand’s cabinet approved in principle the draft amendments to the Life Insurance Act B.E. 2535 (1992) and Non-Life Insurance Act B.E. 2535 (1992). The key changes introduced by the draft amendments include:Added provision on insurance business transfers that result in a change of insurer. In such a case, the transferee of the insurance business is required to notify the insured of the right of objection. A novation by substitution of the debtor will be deemed to occur when the insured does not object to the business transfer.
Read More
January 28, 2020
Tilleke & Gibbins authors have provided the latest update to the Thailand Q&A section of Doing Business in… , a Q&A-style guide published by Thomson Reuters Practical Law that presents an overview of recent legal developments affecting doing business in 59 jurisdictions worldwide. The Thailand chapter of the guide was written by attorneys from Tilleke & Gibbins and presents an overview of Thailand’s legal system and key laws applicable to foreign companies doing business in the country.
Read More
January 13, 2020
On January 7, 2020, the Thai General Insurance Association hosted a session on the insurance industry’s compliance with the Personal Data Protection Act (PDPA), which was enacted in 2019 and is due to come into force on May 27, 2020. Representatives from the Office of Personal Data Protection Commission (PDPC) and the Office of Insurance Commission (OIC) gave presentations, followed by a panel discussion with representatives of the OIC and the Thai General Insurance Association.Speakers were able to give clarity on a number of issues:
Read More