Unofficial translation NON LIFE INSURANCE ACT, B.E. 2535 (1992) 1 BHUMIBOL ADULYADEJ, REX; Given on the 4th day of April B.E. 2535 (1992), Being the 57th Year of the Present Reign His Majesty King Bhumibol Adulyadej is graciously pleased to proclaim that: Whereas it is expedient to revise the law concerning non-life insurance; Be it, therefore, enacted by the King, by and with the advice and consent of the National Assembly, as follows: Section 1. This Act is called the non-life insurance Act B.E. 2535 (1992). Section 2. This Act shall come into force from the day following the date of its publication in the Government Gazette. 2 Section 3. The Non-Life Insurance Act B.E. 2519 shall be repealed. Section 4. In this Act: non-life means any damage which may be estimated in money terms and shall also include loss of rights, interests or income; 1 Translated by Ms. Sukpuck Phongsathit under contract for the Office of the Council of State of Thailand's Law for ASEAN project.- Initial version- pending review and approval 2 Published in the Government Gazette, No. 192, Part 46, Page 33, dated 10th April B.E. 2535
2 company means a public limited company which has been licensed to conduct non-life insurance business in accordance with this Act and also includes a branch of foreign non-life insurance company who has been licensed to conduct non-life insurance business in the Kingdom in accordance with this Act; head office also includes a branch office of foreign non-life insurance company who has been licensed to conduct non-life insurance business in the Kingdom in accordance with this Act; conducting non-life insurance business also includes reinsurance business; funds (repealed); non-life insurance agent means a person whom a company assigns to induce another person to enter into an insurance contract with the company; non-life insurance broker means a person who, with the expectation of a commission, direct or arrange for another person to enter into an insurance contract with the company; Commission means the Office of the Insurance Commission; Fund means Non-Life Insurance Fund; Competent Official means a person whom the Minister appointed to act in accordance with this Act; Registrar means the Secretary-General of the Office of the Insurance Commission or a person whom the Secretary-General of the Office of the Insurance Commission so designated; Minister means the Minister in charge of the application of this Act. Section 5. The Minister of Finance shall be in charge of the application of this Act and shall have the power to appoint Competent Official, and to issue Ministerial Regulations prescribing the fees not exceeding the rates in the Annex of this Act and any other activities for the execution of this Act, and to issue a Notification pursuant to the provisions of this Act.
3 Ministerial Regulations and Notifications shall come into force upon their publications in the Government Gazette. Chapter 1 Company Section 6. A non-life insurance business may only be conducted when a public limited company is established under the law on public limited company, and with a license to conduct the non-life insurance business being approved by the Cabinet. For an application for a license to conduct non-life insurance business under paragraph one, the person establishing the company shall submit the application to the Minister; and when the Minister, by the approval of the Cabinet, grants approval for the nonlife insurance to be conducted, the person establishing the company shall register the incorporation of the public limited company and shall place security deposit in accordance with section 19 while maintaining the funds in accordance with section 27 within six months from the date of the public limited company being registered. When the Minister finds that the applicant has completed the process as stated in paragraph two, a license shall be granted to the incorporated public limited company. In a case where the public limited company is not able to place a security deposit or maintain the funds in accordance with the prescribed period, the approval for the non-life insurance to be conducted shall be deemed to be nullified. The application and license shall be in accordance with the rules, procedures and conditions as prescribed in the Ministerial Regulations. In licensing the application, the Minister may also prescribed conditions.
4 Section 7. A foreign non-life insurance company may establish a branch of the company to conduct non-life insurance business under this Act only when the license from the Minister, as approved by the Cabinet, has been granted. In this regard, the Minister may license with conditions. The application for and the issuance of a license to conduct a non-life insurance business through the establishment of a branch of a foreign non-life insurance company under Paragraph one shall be in accordance with the rules and procedures as prescribed in the Ministerial Regulations. A branch of the foreign non-life insurance business which has been licensed to conduct non-life insurance business must maintain assets in Thailand in accordance with the prescribed amount, types and conditions that the Minister has announced. The amount of asset that the Minister prescribes must not be less than the amount of funds that the company must maintain under section 27. The Minister shall issue a license pursuant to the provision of Paragraph one only when the company has placed a security deposit under section 19 and maintained the assets in Thailand in accordance with Paragraph three. A company which is a branch of a foreign non-life insurance company may not open a branch at any place. A branch includes an office which is separated from the head office of a company, regardless of what name it is called, and which receives expenses from the company, whether directly or indirectly. However, this does not include a location which has been approved by a Registrar to be used as an information operating unit, document storage space and a place of training in relation to the company s business. Section 8. A company s ordinary shares and preference shares must be in the form of a named share certificate, and have a registered par value of no more than one hundred baht per share.
5 The issuance of preference shares under paragraph one shall be in accordance with the law on public limited company. The Registrar may prescribe rules, procedures and conditions in order to protect the interests of the insured, provided that such prescription is not in conflict with the law on public limited company. Section 9. At least three-fourths of a company s directors must be Thai nationals and there must be a person under (1) or (2) or (1) and (2) who shall hold shares all together exceeding seventy-five per cent of all shares, with voting rights, which have all been sold: (1) a natural person who has Thai nationality or a non-registered ordinary partnership in which all partners have Thai nationality; (2) a legal person registered in Thailand and possess the following characteristics: (a) having a person under (1) holding shares in excess of fifty per cent of the total number of shares with voting rights which have been sold; or (b) having a person under (1) or a legal person under (2) (a) or a person under (1) and a legal person under (2) (a) holding shares in excess of fifty per cent of the total number of shares with voting rights which have been sold. Where appropriate, the Commission may permit a person who does not have Thai nationality to hold shares up to fourty-nine per cent of the total number of shares with voting rights which have been sold, and permit more than one-fourth but no more than half of the total number of the directors to be persons who do not have Thai nationality. In granting such permission, the rules regarding shareholding of such person under paragraph one shall be applied, mutatis mutandis. In a case where the company s standing or operations are in such a characteristic that may cause damage to the insured or the public, the Minister, upon the recommendation of the Commission, shall have the power to have leniency for the
6 company to have different shareholders or directors as otherwise prescribed under paragraph two. Such leniency may also prescribe rules or time condition as well. Section 10. If any person acquires shares of any company, and such acquisition causes the number of shares or shareholders to be in violation of section 9 and non-conformity of section 11, such person shall not use the excess shares in order to hold it against that company. The company shall not pay dividends or any pecuniary benefit on the excess shares to such person or allow such person to exercise voting rights on the said excess shares at a shareholders meeting. Section 11. For the purpose of complying with section 9 and section 10, the company shall examine its shareholders registration no less than three months before every shareholders meeting; and shall inform the Registrar of the results of the examination in accordance with the list and within the period of time that the Registrar prescribes. In a case where the numbers of shares held by shareholders are found to be in breach of section 9, the company shall notify such shareholder within fifteen days of the finding; and such person shall proceed to rectify the situation within one month from the date of receipt of the notice. Section 12. the provisions of section 8, section 9, section 10 and section 11 shall not be applied to a company which is a branch of a foreign non-life insurance company under section 7. Section 13. A transfer or an acceptance of transfer of business, either in whole or in part, or a company amalgamation, may only be done between companies. In a case where a company wishes to transfer of accept a transfer of business, either in whole or in part, or an amalgamation under paragraph one, the board of directors of such company shall jointly prepare and submit a scheme showing details of operations to
7 the board of directors. In granting approval, the board of directors may also prescribe any particular condition as deemed appropriate in order to protect the interests of the insured or to ensure stability of the company s business operation. Section 13/1. A transfer of business, either in whole or in part, may commence when the approval from the Commission under paragraph two of section 13 has been granted. The assignment of claim in the transfer of business shall not be subjected to the requirement to give notice to a debtor pursuant to section 306 of the Civil and Commercial Code, provided that such assignment does not affect the right of the debtor to raise a defense under paragraph two of section 308 of the Civil and Commercial Code. In a case where an entire business of the company is transferred, such transfer shall be deemed valid when the transferor company and the transferee company have fulfilled the conditions that the Commission has prescribed under paragraph two of section13 and shall be deemed to be the revocation of the license to conduct non-life insurance business issued to the transferor company. Section 13/2. An amalgamation of companies shall be in accordance with the law on public limited companies. An amalgamation of companies under paragraph one shall be valid when the amalgamating companies have fulfilled the conditions that the Commission has prescribed under paragraph two of section 13, and the amalgamated companies shall be deemed to have been given approval to conduct non-life insurance business under paragraph one of section 6. When the amalgamation of companies is registered and a security deposit is placed in accordance with section 19, and funds are maintained in accordance with section 27, the Minister shall issue a license to the amalgamated companies and such issuance shall be deemed to be the revocation of the license to conduct non-life insurance business issued to the predecessor company.
8 Section 13/3. In a transfer of business from a company to another, either in whole or in part, or in an amalgamation, if there is a transfer of assets with collateral other than the right of mortgage, the right of pledge, or right arising from a suretyship, which must pass on to the transferee pursuant to section 305 of the Civil and Commercial Code, such other collateral shall pass to the transferee company or the amalgamated company, as the case may be. Section 14. In addition to the fees for the license to conduct a non-life insurance business, the company must pay an annual fee for the operation of the non-life business every year, except for the year that the license is issued. If any company fails to pay the annual fee within three month from the date of the end of calendar year, the Registrar shall issue an order prohibiting such company from expanding its business, until the fee is correctly and fully paid, and the order of the Registrar prohibiting the company from expanding its business is revoked. For the purpose of this section, when determining what expansion of business under paragraph two is, the provisions of paragraph two of section 27/6 and the penalty in case of violation of paragraph one of section 27/6, as provided for under section 89/1, shall apply, mutatis mutandis. Section 15. (repealed) Section 16. A company under section 6 that opens a branch, relocates its head office or branch office, or dissolves a branch must obtain a permission from the Registrar and the provision in paragraph six of section 7 shall apply, mutatis mutandis. Application for, and the granting of, permission shall be in accordance with the rules, procedures and conditions prescribed by the Commission.
9 Section 17. No person shall act as an insurer by entering into an insurance contract with any person, unless he/she has obtained a license to conduct a non-life insurance business. No person shall use an insurance policy of a company to which he/she is not entitled to use in accordance with this Act. Section 18. No person shall use or display the name in a business as non-life insurance or any other words which have the same meaning, except for the following persons: (1) a company; (2) an association whose majority of members are companies or an association which most members are officers or employees of a company; (3) an association whose majority of members are non-life insurance agents or brokers; (4) an employer s association or labour union whose majority of members are officers or employees of a company; (5) a non-life insurance agent or broker who use the description in his/her business as a non-life insurance agent or broker, as the case may be; (6) a non-life insurance education institute or other institute relating to nonlife insurance business which use the description in its name; (7) a director, officer, employee, member or a person having a status, position or any duty in a company, association, labour union, non-life insurance education institute or other institute relating to non-life insurance business under (1), (2), (3), (4) and (6) who use such description to show themselves to be a director, officer, employee, member or to have a status, position and duty in such company, association, labour union or institute. The use of name or description in a non-life insurance agent or broker s business under (5) must comply with the rules, procedures and conditions prescribed by the Registrar.
10 Section 19. A company must place the company s securities with the Registrar as a security deposit, in accordance with the types of insurance. The determination of the types of insurance and the value of the securities to be placed with the Registrar under paragraph one shall be as prescribed by the Ministerial Regulation. The securities that the company must place with the Registrar may be cash, Thai Government bonds or any other assets as prescribed by the Minister s notification. The company may ask for permission to change the security deposit placed, subject to the provisions of paragraphs two and three. Section 20. in a case where the value of the security deposit of any company is lower than that prescribed in the Ministerial Regulations issued in accordance with section 19, the Registrar shall *order such company to deposit additional security until the prescribed amount is met within two months from the date of receipt of the order. Section 21. in a case where the value of the security deposit of any company is increased to the extent that such value is greater than that prescribed in accordance with section 19, the Registrar* shall have the power to order the release of the excess portion of the security deposit upon the request of the company, provided that it is able to prove the increased value. Section 22. In a case where a company discontinues its business in any category of the non-life insurance which causes the value of the security deposit placed to be higher than the security deposit prescribed for the continuing non-life insurance business, the company shall be entitled to the return of the excess portion of the assets placed as security deposit for conducting such continuing non-life insurance business, upon the company showing evidence to the satisfaction of the Registrar that the company has
11 discharged all of its debts and has no remaining liability for conducting the discontinued category of non-life insurance business. Section 23. A company shall allocate reserves as follows: (1) Reserve for premiums not yet earned as income by the company; (2) Reserve for compensation; and (3) Reserve for any other purposes, as prescribed by the Commission. The reserves under paragraph one may be in cash, Thai government bond or other assets, in accordance with the rules, procedures, conditions and proportion prescribed by the Commission. Section 24. The Minister * has the power to prescribe for a company to place a reserve under section 23 (1) with a Registrar, in accordance with to the category of insurance and the rates, rules and procedures prescribed. Section 25. In a case where the security deposit that the company placed with a Registrar under section 19 and the reserve that the company placed with a Registrar under section 24 are assets that the transfer or acquisition of such assets must be registered with the officials under the law or must be executed with another person involving in such transfer or acquisition, the Registrar shall notify in writing the official or the person involved; and such official or person involved is prohibited from transferring or disposing of such asset until the Registrar notify them in writing of the revocation or change in the said asset. Section 26. The security deposit that the company placed under section 19 and the reserve under section23 that the company placed with the Registrar under section 24 are not subject to enforcement of a case, throughout the period of time that the company is in operation.
12 In a case where the company discontinues its operation, the creditor having the right to receive payment of debt arising from insurance shall have preferential rights over the assets placed as security deposit under section 19 and reserve under section 23 (1), placed with the Registrar under section 24, and shall have the rights to receive payment of debts from such assets before any other creditor with preferential rights. In a case where the company is bankrupt, the creditor entitled to receive debt repayment arising from insurance shall have preferential rights over the assets placed as security deposit under section 19 and reserve under section 23 (1), placed with the Registrar under section 24, shall have the right to receive payment of debit from such assets in the same manners as a secured creditor under the law concerning bankruptcy. With regard to the company s asset, other than the security deposit under section 19 and reserve under 23 (1), placed with the Registrar under section 24, the creditor entitled to receive debt repayment shall have the right to receive payment of debt arising from the taking of insurance in the same manners as the holder of preferential rights in the value of tax in accordance with the Civil and Commercial Code. Chapter 1/1 Maintenance of Funds and Liquid Assets Section 27. The Commission shall have the power to prescribe the categories and types of funds, including the rules, procedures and conditions for the computation of a company s funds. A company must maintain its funds throughout the period that it conducts a non-life insurance business with the proportion of assets, liabilities, obligations, or risk at a rate prescribed by the Commission.
13 The Commission may determine the rate of funds maintenance under paragraph two in accordance with the size or categories of assets, liabilities, obligations or risk, for all or each of the categories. In a case where a company repurchases shares in accordance with the law on public limited company, the repurchased shares shall not be counted as part of the funds. The funds shall be deducted in accordance with the rules, procedures and conditions prescribed by the Commission. A company is prohibited from using its funds to incur an obligation, subject to the rules, procedures and conditions prescribed by the Commission. Section 27/1. a company must maintain liquid assets in the proportion of assets, debts or liabilities or reserves under section 23, which must not be lower than the rates prescribed by the Commission. The Commission may prescribe the ratio of liquid assets maintenance under paragraph one for certain or all categories of liquid assets, or may prescribe the proportion of each category of liquid assets at any rate. If a liquid assets maintenance rate that the Commission prescribed under this section is increased, such rate must be announced at least sixty days before prior to its effective date. Section 27/2. liquid assets are: (1) cash or deposits at a bank, in accordance with the rules, procedures and conditions prescribed by the Commission; (2) Thai Government securities or Bank of Thailand s securities; (3) bonds or debentures that the Ministry of Finance, the Bank of Thailand or the Financial Institution Development Fund has guaranteed their principles and interests; (4) other assets in accordance with the rules, procedures and conditions prescribed by the Commission.
14 The liquid assets under (2), (3) and (4) must be free from any obligation and be negotiable. Section 27/3. A company must manage its assets, debts, obligations and reserves under section 23 to be consistent with the period of receipt of insurance premiums, period of borrowing or period of receipt of payments from the insured or the public, in accordance with the rules, procedures and conditions prescribed by the Commission. Section 27/4. A company shall allocate its assets for liabilities and obligations under insurance contract, in accordance with the categories, types and proportion prescribed by the Commission. A company shall deposit its reserves under section 23, except for the part that the company has placed with the Registrar under section 24, and its assets under paragraph one with a financial institution or manage them in other ways in accordance with the rules, procedures and conditions prescribed by the Commission. It is prohibited for the assets under paragraph two to be used to incur obligations, subject to the rules, procedures and conditions prescribed by the Commission. Section 27/5. A company shall prepare a funds maintenance report and presented it to the Registrar every month, in accordance with the rules, procedures and conditions prescribed by the Registrar. In a case where any company s funds are reduced to less than the funds required to be maintained under paragraph two of section 27, the company shall propose a scheme to correct the status of the funds within thirty days from the date of receipt of a notification from the Registrar or the date that the auditor or the company has detected such status. The scheme under paragraph one must at least comprise of the following particulars:
15 (1) steps to sufficiently increase the funds; (2) the level of the funds that is expected to be maintained in each quarter, within the period of the scheme; (3) categories and business that will be conducted; and (4) the period of the scheme which must not exceed one year. In giving approval, the Registrar must consider the scheme and notify the company within thirty days from the date the scheme is receipt. The approval may also be given with conditions or time conditions prescribed. In a case where the Registrar does not approve of the scheme or the company does not agree with the conditions or the time conditions prescribed by the Registrar, the company shall have the right to appeal to the Commission within thirty days from the date of receipt of the notification and the Commission shall complete the consideration for such appeal within sixty days from the date that the appeal is received. The Commission s decision shall be final. Section 27/6. While executing the approved scheme under section 27/5, the company may conduct its business as usual but may not expand its business until the funds is maintained in accordance with paragraph two of section 27. An expansion of business under paragraph one shall mean: (1) an acceptance of new insurance or the expansion of the insured amount of the existing insurance policies; (2) an increase of risks for the investments in other businesses of the company; (3) an additional obligation being incurred, except as required by existing obligations; (4) a contract appointing an additional non-life insurance agent or broker being entered into; (5) a receipt of transfer of a company s business.
16 Whether a case increases risks under (2) or incurs an additional obligation under (3) shall be in accordance with what the Registrar prescribes. Section 27/7. The Registrar shall consider applying section 52 when one of the following circumstances arises: (1) a company fails to propose a scheme under section 27/5 to the Registrar within the time period; (2) a company fails to apply the scheme or does not apply the scheme in accordance with the approval under section 27/5, with the conditions or time conditions prescribed by the Registrar; (3) the scheme proposes under section 27 (5) does not receives an approval and the company does not appeal within the prescribed time period or the Commission decides to dismiss such appeal. Chapter 2 Supervision of Companies Section 28. Apart from non-life insurance, a company may only invest in businesses which are prescribed by the Minister. In this respect, the Minister may also prescribe conditions for such business to be conducted by the company. Section 29. Insurance policies, including additional documents or endorsements, that a company issues to the insured must be in accordance with the form and texts which have been approved by the Registrar. The form and texts that the Registrar has approved under paragraph one may be amended, changed, added to, or cancelled, whether in whole or in part, by the Registrar s order, upon the Registrar s discretion or the request of the company.
17 In a case where a company issues an insurance policy which differs from the form or texts approved by the Registrar under paragraphs one or two, the insured or the beneficiary under the insurance policy shall have the option to hold the company liable for payment of debt under the form of the insurance policy or the texts issued by the company or under the form or texts approved by the Registrar. Whether or not the insured or the beneficiary under the insurance policy exercises such an option, the company shall not be released from its liability as stated in this Act. In a case where a company issues an insurance policy using the form or texts which have not been approved by the Registrar under paragraphs one or two, the insured shall have the option of holding the company liable under such insurance policy or terminating such insurance contract and having the company return all insurance premiums that have been paid to the company. Whether or not the insured exercises such an option, the company shall not be released from its liability as stated in this Act. Section 30. The insurance premium rates prescribed by the company must be approved by the Registrar. The insurance premium rates approved may be changed by the order of the Registrar, upon the Registrar s discretion or upon the company s request. The changing of the rates shall not affect the insurance policies whose premium rates have previously been approved by the Registrar. Section 30/1.The texts or pictures in an advertisement or prospectus shall be deemed an integral part of the insurance policy. If any text or picture contains a meaning which conflicts with the texts in the insurance policy, it shall be interpreted in such a way that is favourable to the insured or the beneficiary under the insurance policy, as the case may be.
18 It shall be prohibited for a non-life insurance agent to use texts or pictures in an advertisement or a prospectus which have not been approved by the company to solicit a person to enter into an insurance contract. Section 31. A company is prohibited from the following: (1) conducting a life insurance business; (2) accepting non-life insurance exceeding the following, except by written permission of the Registrar: (a) the acceptance of one or more fire insurance for the same peril within the area prescribed by the Registrar, with an insured sum of more than ten per cent of the funds; (b) the acceptance of non-life insurance on a vehicle for land, water, air, and for persons or property in such vehicle, and liability insurance for the same peril, with an insured sum of more than ten per cent of the funds for each vehicle; (c) the acceptance of other non-life insurance apart from (a) or (b), with each insured sum of more than ten per cent of the funds; In a case where the re-insurance of the perils under (a), (b) or (c) becomes effective at the same time as the acceptance of a non-life insurance, the amount of money for the reinsurance shall not count towards the prescribed amount under (a), (b) or (c); (3) reducing its capital without a written permission from the Registrar, with the approval of the Minister; (4) depositing money elsewhere other than in a bank, finance company or finance and securities company; (5) storing cash elsewhere other than at the company s office; (6) paying any money or property to the company s director, manager, consultant, officer or employee as commissions or remunerations for or in connection with a business or any action, except as gratuities, salaries, bonuses or any other money normally paid;
19 (7) paying any money or property to a non-life insurance agent or broker, beyond wages or gratuity normally paid; (8) paying any money or property in advance to any person as commission or remuneration of work to be done for the company; (9) paying gratuity for a person who assists in obtaining an insurance contract, who is not the company s non-life insurance agent or broker; (10) buying or having immovable property, except for: (a) those to be used as a place for conducting a business or for the welfare of the company s officer or employee, as may be reasonable; (b) those to be used as an investment to conduct other businesses as prescribed by the Minister under section 28; (c) the immovable property that the company acquired through a debt settlement or an enforced mortgage; The purchase or maintenance of such immovable property under (a) or (b) or the acquisition of the immovable property from the debt settlement under (c) requires a written permission from the Registrar. For such permission to be granted, the Registrar may also prescribe any conditions; (11) giving special benefit to the insured or the beneficiary under the insurance policy beyond those specified in the insurance policy; (12) accepting a payment of premium from the insured, in an amount that is less than the payable amount; (13) appointing or authorizing persons other than non-life insurance agents, brokers or company s employees who are responsible for the acceptance of money as an insurance premium receiver; (14) issuing an insurance policy without the signature of a director who is authorized to bind the company and without the company s seal as registered, or without the signature of the foreign non-life insurance company s branch manager as specified in the license to conduct a non-life insurance business and without the company s seal, if any;
20 (15) advertising the company or its non-life insurance business in a false or exaggerated manner; (16) appointing or authorizing persons other than the company s non-life insurance agents to solicit, direct or arrange for a person to enter into an insurance contract with the company, except for the acts of the company s directors, officers or employees on behalf of the company; or (17) selling or giving movable property, with a total value exceeding the amount prescribed by the Registrar, or any immovable property to company s directors or buying property from the company s directors, including persons in connection with the company s directors as prescribed by the Commission, except as permitted by the company s board of directors and approved by the Registrar. Section 32. A Registrar s order refusing to give permission under section 31 (2) may be appealed to the Minister within 15 days from the date that the order has become known. The Minister s decision shall be final. Section 33. A company must dispose of immovable property acquired by the company under section 31 (10) in the following circumstances: (1) for the immovable property, that the used as a place for conducting a business or for the welfare of the company s officer or employee, or as an investment to conduct other businesses under section 31 (10) (a) or (b), if the property is no longer used, it shall be sold within five years from the date that the property was no longer in use; (2) for the property that the company acquired through a debt settlement or an enforced mortgage under section 31 (10) (c), it shall be sold within five years from the date that the property was acquired, except as permitted by the Registrar to be used for the business under section 31 (10) (a) or (b).
21 The Registrar may extend the time period prescribed under (1) and (2) further, in accordance with the time period prescribed by the Commission. The Registrar may also prescribe conditions for the extension. Section 34. A director, manager, or person authorized to act on behalf of a company or a consultant of a company must hold a bachelor degree or higher, or shall have work experience in relation to an insurance business and shall not have any of the following prohibited characteristics: (1) being or having been declared bankrupt; (2) having been sentenced to the final judgment of imprisonment; (3) having been a director, manager or person authorized to act on behalf of the company during the time that the company s license to conduct a non-life insurance business or to conduct a life insurance business has been evoked, except for the person whom the Registrar, with the approval of the Commission, appointed to hold such position during such time; (4) being a director, manager or a person authorized to act on behalf of another company which is licensed to conduct a non-life business, except as having been exempt in accordance with the rules, procedures and conditions prescribed by the Commission; (5) being removed from the position of director, manager or a person who is authorized to act on behalf of the company under section 53; (6) being a political officials or a person who hold a political office; (7) being a civil servant or an officer of the Office of the Insurance Commission, having responsibility in supervising a company, except where the company is a public enterprise, or where the Commission has given approval for the purpose of assisting the operation of the company, or where the person is appointed under section 53;
22 (8) having a tarnished record or having conducted a business in the manners showing irresponsibility or due care that a person of such profession should have in his dispositions and behaviours. Section 35. pursuant to section 66, a company is prohibited from appointing or allowing any person to accept a non-life insurance contract, using the company s insurance policy; The company is prohibited from appointing or allowing any person to compensate claims under an insurance policy, either in whole or in part, apart from reinsurance, except as permitted by the Registrar. Section 35/1. for the purpose of protecting the insured, the inspection and assessment of the categories of peril and the amount of the insured sum, to be carried out by a loss adjuster, shall be in accordance with the rules, procedures and conditions prescribed by the Commission. Section 35/2. Any person who shall be a loss adjustor must be granted a license from the Registrar and must be registered with the Office of Insurance Commission. The application for and the granting of the license and the registration shall be in accordance with the rules, procedures and conditions prescribed by the Commission. Section 35/3. An applicant for a license to become a loss adjuster must pass a training course organized by the Office of the Insurance Commission or by an institute accredited by the Office of the Insurance Commission and shall not have the following prohibited characteristics: (1) being a person who is not of sound mind or is mentally incapacitated; (2) having been sentenced to the final judgment of imprisonment for offences relating to property or offences under section 90/1 or section 90/2, except where
23 he has been released for no less than five years prior to the date of application for the license; (3) being an officer, employee or consultant of the company; (4) having a loss adjustor license which is currently suspended; (5) having had a loss adjustor license which has been revoked within the period of five years before the date of application; Section 35/4. A loss adjustor license shall be valid for two years from the date the license is issued. The Extension of the license shall be done by the licensee filing an application two months before the expiration of the license. The applicant for the license extension must obtain a certificate evidencing that he has passed additional training from the Office of the Insurance Commission or an institute accredited by the Office of the Insurance Commission. The Application for the extension of and the granting of the license shall be in accordance with the rules, procedures and conditions prescribed by the Commission. Section 35/5. In a case where a peril occurs of the categories and the amount of the insured sum prescribed by the Commission under section 35/1, the parties to the insurance policy shall choose a loss adjuster, registered at the Office of the Insurance Commission, as a person to inspect and assess the peril that the company must pay compensation for. In the inspection and assessment of a peril, a loss adjustor must prepare a report or relevant documents in accordance with the forms and particulars as prescribed by the Registrar for the submission to each of the parties to the insurance policy. Section 35/6. A loss adjustor shall abide by the professional ethics of the profession prescribed by the Commission through publication in the Government Gazette.
24 Section 35/7. the Registrar shall have the power to suspend a loss adjustor license when it appears to the Registrar that the loss adjustor violates or does not comply with the notification of the Registrar or of the Commission under section 35/5 or section 35/6. The time period for the suspension of license under paragraph one shall be determined by the Registrar as appropriate, but each suspension shall not be for more than one year. Section 35/8. The Registrar shall have the power to revoke a loss adjustor license when it appears to the Registrar that a loss adjustor: (1) lacks the qualifications or possesses a prohibitive characteristic under section 35/3; (2) has had the license suspended previously and repeats one of the acts under section 35/7. Section 35/9. A loss adjustor licensee whose license has been suspended or revoked under section 35/7 or section 35/8 shall have the right to appeal to the Commission within thirty days from the date of receipt of the notification order, and the Commission shall complete its consideration of the appeal within sixty days from the date that the appeal is received. The Commission s decision shall be final. Section 36. It is prohibited for the company to delay paying the compensation or returning insurance premium which must be paid or returned to the insured or the beneficiary without due reasons, or making such payment or return in bad faith.
25 Any act or performance of the company which may be deemed a violation of paragraph one shall be in accordance with the rules, procedures and time period prescribed by the Minister. Section 36/1. In a case where there is a complaint relating to insurance, compensation of claims, monetary compensation or any other benefits under an insurance policy, the Registrar may arrange for the complaint to be considered and proceed with conciliation. Section 37. Under the provisions of this Act, the Commission shall have the power to prescribe any rules, procedures and conditions for a company to abide by in the following areas: (1) collection of insurance premiums; (2) assessment of the values of assets and liabilities of the company; (3) re-insurance; (4) classification of categories of expenses; (5) allocation of reserves for each type of risks; (6) determination of methods for issuing insurance policies and offering them for sale; (7) determination of the rates of wages or gratuities for the non-life insurance agents and brokers pursuant to each categories of non-life insurance; (8) determination of the forms, size, fonts, language and texts of a document showing receipt of money by the company; (9) determination of the categories and maximum rates of expenses relating to accepting insurance; (10) receipt of money, payments, audits and internal controls; (11) indemnity and compensation under the insurance contract;
26 management; (12) determination of the minimum standards for the company s risks Section 38. In communicating with the public, the company must open its office for business on the dates and at the times prescribed by the Registrar. A company may open its office for business longer than prescribed. Section 39. For the purpose of controlling fire insurance, when a company enters into any fire insurance contract, the company shall submit particulars regarding the acceptance of fire insurance, in accordance with the forms prescribed by the Registrar, to an official within seven days from the date that such fire insurance contract is entered into. Section 40. When an official receives the particulars under section 39 and deems it appropriate to inspect the value of the insured property, this may be done. In this regard, the official shall have the power to enter into the premises of the property between the hours of sunrise and sunset as deemed appropriate, and shall have the power to inspect and request for documents, including any evidence, for the purpose of ascertaining the real value of such property. The insured or a relevant person must reasonably facilitate the officials for the inspection under paragraph one. If the insured or a relevant person fails to facilitate in accordance with paragraph two to the extent that the inspection cannot be done, the officials shall report to the Registrar in writing. In a case such as this, when the Registrar deems appropriate, the Registrar may order for the particular fire insurance contract to be terminated. A Registrar s order must states the date that the fire insurance contract is terminated, which must not be less than three days from the date of the order of the Registrar, and the Registrar shall promptly notify such order to the company and the insured. When the Registrar so ordered,
27 the particular fire insurance contract shall be terminated on the date determined by the Registrar. In a case where a fire insurance contract has been terminated under paragraph three, as far as the part relating to the contractual relationships between the company and the insured concerns, the termination of such fire insurance contract shall be deemed to have been done by the insured. Section 41. When it appears to the Competent Official during the inspection under section 39 that the insured property has value much less than the insured sum to the extent he or she finds unreasonable, the Competent Official shall send a report on the inspection findings to the Registrar within seven days from the date on which that findings become known. In such case, if the Registrar deems appropriate, he or she shall have the power to issue a written order to the company and the insured, within fifteen days from the date of receipt of the report of the Competent Official, to reduce the insured sum to the level the Registrar finds reasonable, but not less than the value of the insured property as appeared in the inspection report. Section 42. When the order of the Registrar under section 41 is issued; (1) the insured shall have the right to terminate the fire insurance contract within three days from the date of receipt of the order from the Registrar. After termination, the company shall return premiums to the insured in a proportion of the period during which the insurance is in place. (2) if the insured does not terminate the fire insurance contract under (1), the insured sum of that insurance shall be deemed as equal to the amount reduced by the order of the Registrar, as from the date of the issuance of such order. The company shall specify premiums for the remaining term of the insurance based on the reduced insured sum and shall return any excessive premiums to the insured within fifteen days from the date of the order of the Registrar.
28 Section 43. In case casualty occurs to the insured property and a responsible inquiry officer under the Criminal Procedure Code has a reasonable cause to suspect that the casualty is caused by an act of bad faith by the insured or beneficiary under the insurance policy, the inquiry officer shall notify the Registrar of a reason for suspicion. In such case, the Registrar shall have a power to order the company to suspend payment of compensation under the insurance policy of that suspicious case. When there is no longer reasonable cause for suspicion, the Registrar shall withdraw the order and notify the company and the insured or the beneficiary under the insurance policy of the withdrawal. Where the Registrar issues an order to stop the compensation under paragraph one, the right to claim compensation shall be deemed suspended from the date of the issuance of the order by the Registrar until the date of its withdrawal. Section 44. A company shall make the registers and account books concerning its business, in accordance with forms and particulars prescribed by the Insurance Commission. A company shall record particulars of a case, which is required to enter into its registers and account books, not later than seven days from the occurrence of that case. Section 45. 3 A company shall keep its register and account books under section 44 at its office for at least five years from the date of their last entry or from the date on which the company is released from the liability on its last liable case, whichever longer. Section 46. A stakeholder may examine the register book under section 44, only with regard to the case with which he or she is concerned, or may request a certified 3 Section 45 was amended by the Non-Life Insurance Act (No. 2) B.E. 2551
29 copy of that case from the company. He or she shall pay a service charge as prescribed by the Insurance Commission. Section 47. 4 A company shall prepare and submit to the Commission the following financial statements and reports on its operation results: (1) audited quarterly financial statements; (2) audited and opinioned financial statements of the last calendar year; (3) annual reports, showing the operation performance of the company. The preparation and submission of the financial statements and reports under paragraph one shall be in accordance with rules, procedures, conditions and periods prescribed by the Commission. The auditor shall be a certified auditor under the law on accounting profession. A company which is a branch office of a foreign non-life insurance company shall not only fulfill the obligations under paragraphs one and two, but also submit an annual report of its foreign non-life insurance company of which it is a branch, within five months from the end of the accounting year of that foreign company. Section 48. If it appears that the annual report submitted by a company under section 47 paragraph one is incorrect or incomplete, the Insurance Commission shall have the power to order the company to rectify or complete the report within the period specified by the Insurance Commission. In case the company fails to comply with the order under paragraph one, it shall be deemed that the company does not submit the annual report under section 47. Section 49. The Commission shall have the power to order a company to submit any report or document concerning non-life insurance business. The Commission may 4 Section 47 was amended by the Non-Life Insurance Act (No. 2) B.E. 2551
30 also order the company to make a submission to further explain or clarify contents of the said report or document 5. The report or document filed or submitted for further explanation or clarification under paragraph one must be completed and truthful. Section 50. 6 A company shall publish its balance sheets and income statements in the form prescribed by the Commission, within fifteen days from the date of submission of the financial statements under section 47 (2), in at least one widely distributed daily newspaper for at least three days, and also post such information in an open space at its Head Office and branch office for at least one month. Section 50/1. 7 For the benefit of public access to information regarding financial status and operational outcome of a company, the Registrar shall have the power to order the company to disclose such information, in accordance with rules, procedures and conditions prescribed by the Commission. Section 50/2. 8 A company shall submit to the Commission its actuary-certified annual report on calculation of liabilities under insurance policies, in accordance with forms, rules, procedures, conditions and periods prescribed by the Commission. Section 51. The Registrar and Competent Official shall have the power to examine business undertakings and financial status of a company and, for the benefit of examination, the Registrar and Competent Official shall have the power: 5 Section 49 paragraph one was amended by the Non-Life Insurance Act (No. 2) B.E. 2551 6 Section 50 was amended by the Non-Life Insurance Act (No. 2) B.E. 2551 7 Section 50/1 was amended by the Non-Life Insurance Act (No. 2) B.E. 2551 8 Section 50/2 was amended by the Non-Life Insurance Act (No. 2) B.E. 2551