THAI INSURERS MAY STRUGGLE UNDER NEW CAPITALISATION RULES

Domestic insurers in Thailand could be badly affected by the new capitalisation requirements, with the total number of insurers likely to be halved, reports Bangkok Post . General Insurance Association president Chai Sophonpanich said that “dozens” of existing insurers were expected to fail to meet the new regulations, particularly the requirement that capital funds be related to levels of risk exposure. The first national insurance master plan for Thailand requires non-life insurers to maintain minimum capital funds of 300m baht, while life assurers are required to maintain capitalisation of at least 500m baht, 10 times the current minimums. At a meeting between the Insurance Department and industry executives last weekend, a “cash before cover” system for motor insurance was proposed, with premiums needing to be fully paid to an insurer before a cover note or policy could be issued.