Thailand’s Office of Insurance Commission (the OIC) has issued two sets of requirements—collectively called the OIC Notifications Re: Conditions Relating to Issuing and Offering Insurance Policies of Insurance Companies, and Duties of Non-life Insurance Agents, Brokers and Banks 2018 (the Notifications)—imposing practical new requirements on life and non-life insurance and reinsurance companies in Thailand.
The key provisions are listed below, and are applicable to both life and non-life insurance unless expressly specified otherwise. All provisions come into force on January 1, 2019.
Corporate Culture
- The board of directors and the executives must produce an internal policy, a business plan, and a business strategy, in writing, for the purpose of promoting tangible and effective fair dealing with customers. These must be rolled out to all of the company’s employees and insurance intermediaries.
- Companies must conduct risk management in respect of conducting business, exercising fair treatment, and dealing with customers, including:
- Preparing and developing product wording and premium rates;
- Advertising and the offering insurance products;
- Collecting, storing, and securing customers’ personal data;
- Servicing insureds;
- Handling claim compensation and monitory benefits according to policies; and
- Handling complaints.
Conduct in respect to the issuance of insurance products
- After concluding a sale, companies must issue the policy and send it to the insured with a summary of the coverage and the exclusions. In the case of a group policy, the documents must be sent to the policy holder or the insured. The insured members of the group policy must be provided with an insurance certificate, including a summary of the coverage, the exclusions and the conditions.
- In the event of a renewal, where there is no change to the coverage and conditions, the company may choose to send a renewal certificate to the policy holder/insured/group members, upon their request, instead of the whole policy. This is not applicable insurance products that the insured is legally required to procure.
Conduct in respect to the issuance of insurance products
- Conduct in respect to offering insurance products
- Companies must ensure that their intermediaries comply with the Notifications. If they do not comply, and the intermediary fails to rectify their incompliance, they must be de-authorized no later than seven days from the deadline that the company provides for rectification. The company must notify the OIC of the non-compliance and the outcome.
- Permitted distribution channels include offering by:
- Employees or staff;
- Phone (telesales);
- Bancassuance;
- Post;
- Electronic means; and
- Other means.
Premium remittances can only be made to the company’s account for products offered through channels (2), (3) and (4).
- Companies must publicly disclose the details of their intermediaries (e.g. names and license numbers).
- When offering insurance products, the company/intermediary must:
- Explain that the information provided in the application must be true and complete and the consequence of incompliance;
- Clearly identify the insurer, which is the product issuer;
- Create no disturbance or annoyance to the customer and immediately stop the sale when the customer declines;
- Provide information about the premium amount, payment period, and insured period (separately from any other financial product offered together in a bundle—customers must be informed of any such bundling);
- State how the customer information was obtained upon the customer’s request;
- NOT, in order to procure a sale, induce the insured to cancel another insurance policy; provide untrue or misleading information, or omit any material information; or require the customers to buy insurance as a condition for providing other services.
- Telesales:
- The offering must be by employees, staff, agents, brokers, or banks, which have been authorized by the company. Companies must submit the name of authorized persons to the OIC within 7 days of authorization.
- Calls can only be made from Monday to Saturday between 8.30am and 7.00pm.
- For non-life products, a minimum 30-day free look period is required, except for compulsory motor and micro-insurance (fire).
- Calls cannot be made to the customers who have made a “do not call” request for a period of at least six months. Companies must keep a “do not call list” and make it readily available upon request from the OIC.
- Calls must be recorded, and recordings can only be made with the prior consent of the customers. Telesales scripts must be approved by the company in advance.
- A confirmation call must be made within seven days.
- Sales by post
- Sales can only be made by the company, agent, broker, and bancassurance, and the customer must express their intention to buy the insurance policy by post.
- The company must provide (and ensure that its intermediaries provide):
- Name, address, and phone number, by which the company can be contacted;
- OIC approved product wording;
- Payment channel and coverage commencement date;
- Insured term; and
- Certificate of insurance (if applicable).
The name and the contact details of any intermediaries must also be provided to the customer.
After sales service
Companies must have a complaints system and process, including provisions on policy cancellation and premium refunds.
For advice on how to comply with these new regulations, or for any other information, please contact Athistha (Nop) Chitranukroh on [email protected] or +662 056 5600
