Thailand's Ministry of Finance (MOF) has issued a new notification easing foreign shareholding and board limits for life insurers. This long-awaited update aligns with the draft notification that was previewed in May 2024, and reflects the MOF's intention to enhance the stability and competitiveness of life insurers.
Life Insurer Qualifications
Life insurers may apply for permission to exceed 49% foreign shareholding or have a majority of foreign directors if:
- The life insurer operates in a manner that could harm the insured or the public, and either (1) the OIC has directed the company to improve its status or adjust its capital, or (2) the company's actions may have a significant impact on the insurance industry, causing significant compensation burdens and affecting the company's capital adequacy ratio (CAR);
- The life insurer's shareholders are unable to increase capital; and
- The life insurer is unable to attract Thai investors to increase the capital necessary to ensure stability and the long-term operation of the business.
Foreign Shareholder Qualifications
To qualify, foreign shareholders must:
- Either be an insurance company or have at least 10 years of relevant experience in the insurance industry;
- Demonstrate financial stability and possess a credit rating (or have a parent company with a credit rating) of at least "A" from a reputable credit rating agency;
- Present a clear and comprehensive business plan to develop and promote the company's efficiency and competitiveness in the industry; and
- Be able to make an investment that increases the company's capital by at least THB 2 billion to maintain stability with a CAR of at least 250%.
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.
