Thailand’s Ministry of Finance has relaxed legislation to attract foreign investors and promote stability within its insurance and reinsurance industry.
Under the new measures, current limits on foreign shareholding and board membership for life and non-life insurance companies will be removed or broadened.
A licensed insurance company can now apply for up to 100% foreign shareholding and can have foreign directors make up more than 50% of its Board of Directors.
Regional law firm, Tilleke & Gibbins, said in a website commentary; “This appears to be a significant movement for the Thai insurance industry, especially on the life insurance side.
“For the past several years, there has been some direction toward liberalisation on the non-life insurance side—possibly due to the various catastrophic events within Thailand over recent years.”
The Thai finance office laid out a string of requirements for foreign shareholders, these include being a re/insurance company, or engaging in a business that supports the insurance industry and having at least 10 years of re/insurance related business expertise.
The notification released by the Ministry of Finance also states that foreign investment companies must have a percentage of Capital Adequacy Ratio (CAR) prescribed by the Office of Insurance Commission (OIC) and a business operation plan for promoting stability for insurance companies, or the overall insurance industry.
In addition, foreign investors are required to have (or have a parent company) with a credit rating of ‘A’ – have a clear direction for their business operation policy and technology transfer plan, and have sufficient capital to promote the company’s efficiency and ability to compete in the market.