New investment regulations for Thai insurers become effective

by DLA Piper
Contact

On 25th October 2013, new regulations became effective which govern how life and non-life insurers in Thailand may conduct investment and engage in other business. While the regulations are lengthy and detailed, we have highlighted certain key points below.

Investment administration 

An investment committee must be appointed by the insurer. It must comprise of at least three persons, who shall be

  • directors/executives, and
  • 'knowledgeable and skilled persons' who have at least three years' experience in investment management, risk management or securities analysis.

The committee has a supervisory role. Among other things, it must develop an investment policy framework and consider and approve investment plans, supervise and manage investment, oversee transparency and accountability of investments, and report investment results to the insurer's Board of Directors.

An investment unit should be developed by the insurer, responsible for the operational role in undertaking investment. Within two years, responsible person(s)/investment decision maker(s) within the unit must complete an official training course & have certain financial/economic qualifications and/or experience. Otherwise, an external party can be appointed to oversee the investment unit, which must be either a licensed personal fund manager or approved for the role by the insurance regulator.

If the investment unit is not appropriately comprised as described above, the insurer may still invest although its scope to do so is then extremely limited. 

Permitted investments

The regulations prescribe that insurers may invest in the following ways, subject to certain limitations on investment proportions:

  • bank deposits
  • equity instruments (generally, up to 10% of the total issued shares may be acquired)
  • debt instruments
  • hybrid instruments (eg convertible debentures)
  • investment units
  • futures contracts
  • structured notes
  • making loans
  • vehicle hire purchase
  • issuing avals & letters of suretyship
  • securities borrowing & lending transactions, and
  • securities buying or selling under repurchase agreements.

Conducting other business

Subject to certain conditions, insurers may engage/invest in 'other' business as follows:

  • letting or subletting real estate
  • conducting back office services
  • holding more than 10% of shares in a foreign insurer, or in a company holding shares in ASEAN insurers, with the regulator's permission
  • holding more than 20% of shares in certain insurance-related businesses (including brokerages), with the regulator's permission
  • operating certain securities businesses, with the regulator's permission.

A supervisory committee and an internal control system must be established for the conduct of other business, and income from each 'other business' must be separated according to generally accepted accounting principles.

Documents to be developed and submitted to the regulator 

The following must be developed and submitted to the insurance regulator:

  • investment policy framework & investment plan*
  • risk management procedure*
  • policy for conducting other business*
  • investment manual**, and
  • risk management procedure for conducting other business*.

* These documents must also be reviewed and resubmitted annually.

** To be developed within 90 days of the end of 2013, and submitted to the regulator within 30 days of completion.

There is also a general requirement to submit to the regulator details of any material changes to these documents within 30 days.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© DLA Piper | Attorney Advertising

Written by:

DLA Piper
Contact
more
less

DLA Piper on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.