Life Insurance Act

Defines the Commission (คณะกรรมการกำกับและส่งเสริมการประกอบธุรกิจประกันภัย) and the Registrar (นายทะเบียน), who is the Commission's Secretary-General or a person the Secretary-General delegates. The Commission and the Registrar make the approvals, announcements and orders under the Act.

Life insurance may be carried on only by a public limited company that holds a licence from the Minister with Cabinet approval. After the company is registered it must lodge the security deposit (Section 20) and hold the capital funds (Section 27) within six months, otherwise the approval lapses. A foreign life insurer may set up a branch only with a licence on the same basis, holding assets in Thailand not below the Section 27 capital funds (Section 8). Section 10 is the Thai-ownership rule, not the licence.

At least 75% of the voting shares and at least three-quarters of the directors must be Thai nationals. Where there is reasonable cause the Commission may permit non-Thai holdings of up to 49% of voting shares and non-Thai directors above one-quarter but below one-half. Separately, where a company's condition may harm insureds or the public, or to strengthen a company or the life insurance business, the Minister on the Commission's advice may relax the share or director requirements (third paragraph), so 49% is not a hard cap in every case. Sections 9 to 12 do not apply to branches of foreign insurers licensed under Section 8 (Section 13).

An insurer must lodge security with the Registrar of a value set by ministerial regulation, in cash, Thai government bonds or other assets the Commission announces. If its value falls below the prescribed level the Commission orders a top-up within two months of the order (Section 21). The Act states no baht figure.

The insurer must set aside premiums as reserves for policies still in force, plus other reserves the Commission announces. The Commission may require up to 25% of these reserves to be deposited with the Registrar (Section 24).

The insurer must hold capital funds at all times as a ratio to assets, liabilities, commitments or risk, at the rates the Commission announces. It must also hold liquid assets at a ratio the Commission announces, and an increase in that ratio must be announced at least 60 days before it takes effect (Section 27/1). It reports its capital monthly (Section 27/5). If capital falls below the required level, the insurer must put forward a recovery plan within 30 days of the Registrar's notice or of the date the auditor or the company discovers the shortfall, and the plan may last no more than one year. The Act does not itself name a risk-based-capital formula.

Policies and their attachments must follow the form and wording the Registrar has approved, and premium rates need the Registrar's approval (Section 30). If an insurer uses a form the Registrar has not approved, the insured may hold it liable on that policy or cancel the contract and recover all premiums paid; if it departs from an approved form, the insured may choose between the issued wording and the approved wording.

Statements or images in advertising or solicitation materials are treated as part of the policy; if they conflict with the policy wording they are read in favour of the insured or beneficiary.

A life insurer may not carry on non-life insurance business, and may not reduce its capital without the Registrar's written permission given with the Commission's consent.

An insurer must not delay paying the insured or beneficiary, or refunding premiums, without reasonable cause, or pay or refund in bad faith. What counts as a breach, including the method and time limits, is set by the Commission's announcement; the Act fixes no number of days. The Registrar may hear complaints about insurance and claims and mediate (Section 37/1). Section 84 is the Life Insurance Fund, not claim payment.

The Minister may revoke the life insurance licence where, among other grounds, liabilities exceed assets or finances are unsound in a way that may harm insureds or the public, the company breaches the Act or the Minister's or Registrar's orders in a way that may harm them, it stops business without reasonable cause, it delays paying policy money without reasonable cause, or continuing business would harm them. A revoked company is dissolved and liquidated (Section 65).

Acting as a life insurance agent or broker requires a licence from the Registrar. Agent applicants must be adults domiciled in Thailand with the insurance education or exam the Commission's Office announces, and must not be disqualified, for example by a final conviction for dishonest offences against property unless the sentence ended at least five years before the application, or by a revocation of an agent or broker licence within the previous five years (Section 69).

Agent and broker licences last one year; renewal must be applied for within the two months before expiry, with proof of additional training. After two consecutive renewals the licence is issued for five years at a time.

Establishes the Life Insurance Fund (กองทุนประกันชีวิต) as a juristic person, to protect creditors under insurance contracts when an insurer's licence is revoked and to develop the life insurance business to be stable and secure. Insurers remit to it at a rate the Commission announces with the Minister's consent, not above 0.5% of premiums received in the preceding six months (Section 85/3). The Fund pays each creditor in place of the revoked insurer, and the amount, together with anything received from the liquidator, may not exceed THB 1,000,000, each creditor being assessed mainly by the number of persons covered under the insurance contract (Section 85/5). The Commission with the Minister's consent may announce a higher figure, generally or for a type of contract (Section 85/6).

Acting as an insurer without a licence (Section 18) is punishable by two to five years' imprisonment or a fine of THB 200,000 to 500,000, or both, plus up to THB 20,000 a day while the breach continues. Acting as an agent or broker without a licence faces up to six months or THB 50,000 (Section 105). A fraudulent claim or false evidence in a claim is punishable by up to three years or THB 300,000 (Section 114/4).