Office of Insurance Commission

The Office of Insurance Commission (OIC) is the regulator of Thailand’s insurance industry has been regulated by the (OIC) which operates under the supervision of the Thai Ministry of Finance.[1] The OIC is empowered to regulate insurance companies, brokers and agents and was established under the Thailand Government Insurance Commission Act B.E. 2550 which summarized the role of the Commission ‘to supervise and promote insurance business conduct’.[2] Prior to this insurance regulation occurred within the Department of Insurance, part of the Thai Ministry of Commerce.[3]

The OIC is responsible for the issue of operating licenses for insurance companies and operational adherence to regulations through market supervision.

Ensuring insurers adhere to capital adequacy requirements is an important aspect of the ongoing market supervision role of the OIC. Thailand implemented Risk Based Capital (RBC) framework from 2011 aligning the Thai insurance industry to many other Asian economies including Japan (since 1997), Indonesia (since 2000), Taiwan (since 2002), Singapore (since 2004), Malaysia (since 2009), South Korea, The Philippines and Thailand (since 2011).[4] From 1 January 2013 life insurers and reinsurers were required to maintain a minimum level of capital of THB500 million and general insurers/reinsurers THB300 million with a minimum solvency margin of 140 percent.[5]

In 2010 the OIC in anticipation of the planned move to a Risk Based Capital measure of solvency in 2011, issued a 5-year strategic development plan for the Thai insurance industry [6] in which the OIC recognised that with more than 90 licensed insurers in the Kingdom at that time,[7] industry consolidation was both desirable and necessary as many market participants would be inadequately capitalised when the full ramifications of the RBC approach were felt. Other salient points in this plan included the recognition that in addition to undercapitalisation in some areas, the industry also suffered in places from being sub-scale and thus inefficient, posing a threat to the industry's international competitiveness, particularly as competition may increase following the relaxation of trade and commerce restrictions among members of ASEAN, commencing in 2015.[8] The Plan recommended in addition to consolidation that the industry seek the more active involvement of multinational insurance groups able to provide the necessary capital as well as expertise to ensure the Thai insurance industry remains internationally benchmarked.[9]

References

  1. ↑ Bank of Thailand website
  2. ↑ Office of Insurance Commission website
  3. ↑ Office of Insurance Commission website
  4. ↑ Sukpaiboonwat, Piputsitee & Punyasavatsut1 2014 Thailand Insurance Regulation: Highlights & Time to Go Ahead, Asian Social Science; Vol. 10, No. 6
  5. ↑ Norton Rose Group Insurance Regulation in Thailand
  6. ↑ Office of the Insurance Commission Insurance Development Plan volume II 2010-2014
  7. ↑ http://www.oic.or.th/en/search/companies.php
  8. ↑ http://www.bangkokpost.com/business/news/438004/small-firms-seek-mergers-after-regulation-changes
  9. ↑ Office of the Insurance Commission Insurance Development Plan volume II 2010-2014

External links

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