Amendments to the Non-life Insurance Act B.E. 2535 (1992) and Life Insurance Act B.E. 2535 (1992) were published in the Government Gazette on May 25, 2019. They will come into force 180 days after publication—i.e. November 21, 2019. These amendments are the first in a series of updates that the Office of Insurance Commission (OIC) intends to introduce to modernize and improve Thailand’s insurance laws.
The amendments mainly focus on insurance intermediaries, i.e., agents and brokers. The key changes introduced by the amendments are as follows:
- Adoption of laws on electronic transactions, extending regulations to cover electronic activities over which the OIC currently has no specific controls.
- Extension of the validity period of loss adjuster licenses from two years to five years.
- Prohibition of those with a record of poor behavior or irresponsible behavior, as determined by the OIC, from becoming loss adjusters, agents, individual brokers, or corporate brokers.
- Introduction of duties and liabilities on corporate brokers, including a duty to only appoint licensed brokers, or those with appropriate knowledge and experience to work as brokers; and joint liability for corporate brokers with their appointed individual brokers, regardless of whether they have a brokerage license, for damage caused by the individual’s conduct.
- Rearrangement of grounds for revocation of an agent or broker’s license and establishment of a suspension procedure.
- Prohibition of agents or brokers from using advertisement materials without prior approval from the insurer.
- New penalties for violation of OIC regulations and the use of advertisement materials without the insurer’s approval, and prescription of additional daily penalty rates for those who fail to remedy their breach.
The amendments also prescribe a number of new offences and penalties, for which prosecution has previously relied on provisions under the criminal code. This allows for tighter control of these offenses through more industry-specific regulations, and brings prosecution under the remit of the state (via the OIC). The latter is important in ensuring the possibility of public criminal prosecution, which is permissible under general Thai criminal law, and therefore limiting the possibility of settlement. These new offences include:
- fraudulent claim;
- offering or accepting bribes for the payment of claims or other benefits under an insurance policy; and,
- enticing a person to enter into an insurance contract by deceit or misrepresentation, without actually binding that person by the insurance contract.
Penalties for violation of the new provisions above extend to the managing directors, or other persons responsible for a corporate broker’s business operation, who have a duty to give directions in compliance with the provisions governing agents and brokers, whose command, action, or omission causes the violation.
The amendments also give the OIC the authority to issue a number of new regulations governing the activities of insurance intermediaries, including the collection and remittance of premiums, disclosure of information regarding the conduct of agents and brokers, etc.