New rules will come into force for insurance companies at the end of 2018 and the Office of the Insurance Commission (OIC) is advising insurance companies to be ready for them.
The new rules include the necessity for insurance intermediaries such as brokers and agents to have a license and to have disclosures about the information they collect and provide. Also they will need to have in place all the necessary resources to respond to customer complaints quickly and effectively. Overall the new rules are to ensure that insurance companies, intermediaries and agents do business in an ethical manner.
Suthipol Taweechaikarn, secretary-general of the OIC was quoted as saying, “Insurance companies must have a system to monitor the quality of product distribution from their agents, according to the regulator’s requirement,” adding, “For example, they must complete risk analysis and assessment, and assign persons or departments to conduct the monitoring.”
In terms of information disclosure, this cuts both ways as it means that insurance companies will need to carefully protect the data they have about customers as well as accurately convey information about policies to them. Insurance companies will be responsible for overseeing their agents to ensure they behave responsibly. Data protection is a hot topic of late with Europe also on the cusp of rolling out a new set of General Data Protection Regulations (GDPR), along with heavy penalties for non-compliance, representing one of the biggest shakeups for all industries that process personal data.
In Thailand, the International Association of Insurance Supervisors has a set of standards called the Insurance Core Principles (ICPs). Insurance companies will be assessed by the Financial Sector Assessment Program to check adherence to them. The program will evaluate the effectiveness of both Thailand’s local regulators and insurance businesses to meet the standards. The ICPs are international standards and the aim is to bring Thailand’s insurance companies to a stage where they can meet them.
Mr. Taweechaikarn was also quoted as saying, “Insurance companies, as owners of life-insurance products, must emphasize and adhere to quality of products distributed through all channels, including agents, brokers and bancassurance to meet international standards,” adding, “Such practices are partially to drive Thai businesses to international recognition.”
As of the end of 2017, Thailand had 274,575 life insurance agents and 112,582 brokers representing the largest number of life insurance brokers and agents in Asean.
The OIC invited 21 life insurance companies to meet recently to prepare for the new rules. Under discussion was the notifications’ draft, a document that sets the conditions for the launch of life insurance products and spells out the duties of life insurance companies, brokers and agents.