Thailand's key insurance regulatory body, the Office of Insurance Commission (OIC), recently published the Insurance Development Plan (Vol. 3) for 2016 to 2020 (the Insurance Development Plan), which seeks to provide an overview of the OIC's key strategies for the Thai insurance market in the forthcoming years. For stakeholders with an eye on future regulatory developments over the short to medium term, these plans will be of particular interest. Some of the policy proposals of note include the following: Policy Policy 1: Increase the potential of the insurance industry
- Increase the potential of insurers by raising the standard of capital maintenance in insurance companies, stipulating the requirements for risk-based capital, and requiring insurers to conduct internal risk and solvency assessments.
- Relax the foreign shareholding limit to increase sources of funding in insurance companies and to encourage knowledge transfer. In this respect, the OIC plans to issue rules and conditions for the supervision of foreign shareholders, as well as supporting amendments to the primary legislation to provide greater opportunities for foreign investments.
- Raise the standards of risk management and the operation of core insurance business by stipulating the framework and structure for management and internal controls to be in line with international standards, and prescribing the qualifications and experience for directors and high-level executives, and for the OIC to have approval rights on the appointment of such persons.
Policy 2: Raise awareness and access to insurance products
- Raise public awareness and understanding of insurance products and insurance as a method for risk management. This initiative will be conducted through various marketing tools and channels in collaboration with the private sector.
- Support the development of insurance products that meet the preferences and risk appetite of customers, including products for the elderly that reflect the ageing society, products for low-income and disabled customers, and microinsurance products.
- Enhance the public's access to insurance products through electronic platforms by prescribing guidelines and procedural standards for the electronic sale of insurance products, in order to strengthen confidence in these emerging channels and to mitigate associated risks.
Policy 3: Enable competitive environment
- Gradually detariff insurance products, including marine and cargo insurance, industrial all-risk insurance, non-life insurance and voluntary motor insurance.
- Develop a products approval process to accurately reflect the stability and risk of the applicant, and improve the approval process through electronic means using the I-SERFF system.
- Support the expansion of insurance business in ASEAN countries and promote Thailand as a regional headquarter base for insurance in CLMV countries.
Policy 4: Support the fundamental structure of the insurance industry
- Improve the qualifications and standards of loss adjusters, underwriters, agents, brokers, and actuaries.
- Push for amendments to the Life and Non-Life Insurance Acts to improve the supervision of insurance businesses, and to develop laws related to marine insurance.
The principal objective of the Insurance Development Plan is stated as achieving "sustainable growth and public confidence in the Thai insurance system" in order to increase stability in the insurance industry and efficiency in business operation; increase public knowledge and awareness of the importance of insurance; and encourage a more competitive environment in the insurance industry in Thailand.