Non-Life Insurance Act

Defines non-life loss (วินาศภัย) as any damage that can be estimated in money, including loss of rights, benefits or income. Names the Commission (คณะกรรมการกำกับและส่งเสริมการประกอบธุรกิจประกันภัย) and the Registrar (นายทะเบียน), the Commission's Secretary-General or a delegate, who exercise the Act's powers, and defines the Non-Life Insurance Fund.

Non-life insurance may be carried on only by a public limited company holding a licence from the Minister with Cabinet approval. After registration the company must lodge the security deposit (Section 19) and hold the capital funds (Section 27) within six months, otherwise the approval lapses. A foreign insurer may set up a licensed branch (Section 7). Section 10 is a share-acquisition sanction, 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% 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 non-life insurance business, the Minister on the Commission's advice may relax the requirement (third paragraph), so 49% is not a hard cap in every case.

A person who acquires shares in breach of Section 9 and does not comply with Section 11 cannot assert the excess holding against the company, which may not pay dividends or other returns on the excess or let it vote at shareholder meetings.

An insurer must lodge security with the Registrar according to the class of insurance, in the value set by ministerial regulation, in cash, Thai government bonds or other assets the Commission announces. The Act states no baht figure.

The insurer must hold reserves for premiums not yet earned, reserves for claims, and other reserves the Commission announces; the Commission may require the unearned-premium reserve to be lodged with the Registrar by class of insurance at the rates and rules in its announcement (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. The insurer reports its capital monthly. If capital falls below the required level it 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 (Section 27/5), and while the plan runs it may not expand its business until it again holds the required capital (Section 27/6). 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.

A non-life insurer may not carry on life insurance business. Without the Registrar's written permission it may not write cover above these limits: for fire, one policy or several on the same loss within a zone the Registrar defines, with sums insured above 10% of capital funds; for land, water or air vehicles and the people or property on them, and liability cover for the same loss, a sum insured per vehicle above 10% of capital funds; and for other risks, a single sum insured above 10% of capital funds. Reinsurance taking effect at the same time as the cover is not counted towards these limits.

For the classes and sums insured the Commission announces (Section 35/1), the policy parties choose a licensed loss assessor to inspect and assess the loss, and the insurer bears the cost. If they cannot agree, each side picks its own assessor and pays for its own. A loss-assessor licence lasts five years, renewable on application made within the two months before expiry (Section 35/4).

An insurer must not delay paying compensation 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 mediate complaints (Section 36/1). Section 84 is an administrative-fine provision, not claim payment.

The Minister may revoke the non-life insurance licence where, among other grounds, liabilities exceed assets or finances are unsound in a way that may harm insureds or the public, or the company breaches the Act, regulations, conditions or orders in a way that may harm them.

Acting as a non-life insurance agent or broker requires a licence from the Registrar. Licences last one year, renewable by application within the two months before expiry with proof of additional training, and last five years at a time after two consecutive renewals (Section 72).

Establishes the Non-Life Insurance Fund (กองทุนประกันวินาศภัย) as a juristic person, to protect creditors under insurance contracts when an insurer's licence is revoked and to develop the non-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 80/3). 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 80/5). The Commission with the Minister's consent may announce a higher figure, generally or for a type of contract (Section 80/6).

Acting as an insurer without a licence (Section 17) 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 99). A fraudulent claim or false evidence in a claim is punishable by up to three years or THB 300,000 (Section 108/4).