Most Read Contributor in Hong Kong, September 2016
There are two relevant provisions involved in the insurance business which are
1. The Life Insurance Act 1967, and
2. The Insurance Against Loss Act 1967.
The Life Insurance Act 1967.
Any business entity wishing to operate a life insurance business shall file their application for the Minister of Commerce's approval. An application form shall contain the conditions specified by the Minister.
After approval is granted, a company registration shall be made in accordance with the terms and conditions prescribed in the Civil and Commercial code. Accordingly, the company shall deposit financial securities of 2,000,000 Baht with the Insurance Commissioner. The company also shall maintain a capital fund of not less than 5,000,000 Baht. After the completion of the company's registration, the company shall apply to the Minister for a license.
A foreign branch office may file the same application, but it must maintain assets in Thailand of not less than five million Baht. The types of assets shall be cash, government bonds without encumbrance, shares, preferred shares of the Industrial Financial Corporation of Thailand or immovable property for the company establishment which do not exceed 60% of maintained assets.
The Insurance Against Loss Act. 1967.
The company formation procedure is similar to those of a life insurance company. However the financial securities shall be deposited with the following:
1. 1,000,000 Baht for the Sea Insurance and Insurance Commissioner Transportation Insurance.
2. 1,250,000 Baht for any other types of insurance, including
The securities shall be either cash, government bonds or any other assets according to the rules prescribed by the Minister in the Government Gazette.
The company shall maintain assets according to the types of following insurance :
(1) Not less than 2,500,000 Baht for the Sea Insurance and Transportation Insurance.
(2) Not less than 3,000,000 Baht for any other types of insurance business not including (1)
(3) Not less than 3,500,000 Baht for any other types of insurance business including (1).
An ordinary legal person may establish an Insurance Agency. However, an Insurance Agent must obtain authority from the company which it is representing and a license form the Insurance Commissioner. An Insurance Agency does not equate to Insurance Broker. An Agent means a legal person retained by the company to persuade other persons to procure their insurance. An applicant for an Insurance Agency shall have following qualification ;
1. already become Sui Juris
2. have residence in Thailand.
3. education standard not lower than primary 4.
4. not a incompetent person or quasi - incompetent person.
5. not a bankrupt according to the Bankrupt law.
6. the license that has never been repealed.
7. passed the examination regarding the Life Insurance course, prescribed by the Insurance Commissioner.
An ordinary legal person or juristic person may become an Insurance Broker by obtaining the license from the Insurance Commissioner. A Broker is a person who suggests to an other person to conclude an Insurance Contract within a company in return for compensation from the company. The ordinary person broker shall have similar qualifications to the agency.
The juristic person having the Head Office in Thailand may apply for a license if it has been specified in the objectives of such company.
NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".
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