OIC to insurers: Get ready for new rules
Local firms to be assessed under ICPs
The Office of the Insurance Commission (OIC) is urging insurance companies to prepare for a new international assessment scheme that is scheduled to be adopted around the end of this year.
The new programme will require insurance intermediaries to be licensed and have information disclosure policies, the ability to conduct business ethically and a process to handle customer complaints, said Suthipol Taweechaikarn, the OIC’s secretary-general.
Insurance firms will also be required to offer products with complete and accurate information, keep customers money safe and protect their customer information, he said. In addition, they must oversee their intermediaries to ensure they act in a proper manner.
“Insurance companies must have a system to monitor the quality of product distribution from their agents, according to the regulator’s requirement,” Mr Suthipol said. “For example, they must complete risk analysis and assessment, and assign persons or departments to conduct the monitoring.”
Thailand is set to apply the Financial Sector Assessment Program, which will require local insurance companies to be assessed under Insurance Core Principles (ICPs) of the International Association of Insurance Supervisors.
The ICPs will assess the effectiveness of each local regulator and business operators to meet the international standards. Many ICP standards are related to insurance companies, including ICP No.18 (intermediaries) and No.19 (conduct of business).
Mr Suthipol said insurance companies’ directors are also required to pay attention to quality control for the selling process and reviewing the quality control system.
“Insurance companies, as owners of life-insurance products, must emphasise and adhere to quality of products distributed through all channels, including agents, brokers and bancassurance to meet international standards,” he said. “Such practices are partially to drive Thai businesses to international recognition.”
At the end of 2017, Thailand had the highest number of life-insurance agents and brokers in Asean at 387,157, of which 274,575 were life insurance agents and the remainder were brokers.
Separately, the OIC recently invited 21 life insurance companies to join a meeting to prepare for the new notifications’ draft, which sets a criteria for the launch of life insurance products and duties of life insurance agents.
The notifications draft has four principles: to upgrade marketing behaviour of the insurance business, to meet international standards, to let insurance companies have transparent market behaviour and to improve punitive measures.