Unofficial Translation LIFE INSURANCE ACT, B.E. 2535 (1992) 1 BHUMIBOL ADULYADEJ, REX, Given on the 4th Day of April, B.E. 2535 (1992); Being the 47th Year of the Present Reign. His Majesty King Bhumibol Adulyadej is graciously pleased to proclaim that: Whereas it is expedient to revise the Life Insurance Act; Be it, therefore, enacted by His Majesty the King with the advice and consent of the National Legislative Assembly, as follows: Section 1. This Act is called the Life Insurance Act, B.E. 2535 (1992). Section 2. This Act shall come into force as from the date of its publication in the Government Gazette. 2 Section 3. The life Assurance Act, B.E. 2510 (1967) shall be repealed. Section 4. This act shall not be applied to the undertaking of life insurance business of the Government Savings Bank under the Government Savings Bank Act. B.E.2535 (1992). 1 Translated by 2 Published in the Government Gazette, Vol. 109, Part 46, Page1, dated 10 th April
2 Section 5. In this Act; Company 3 means a public limited company, obtaining a license to engage in the life insurance business under this Act, and shall include a branch office of a foreign life insurance company, obtaining a license to engage in the life insurance business in the Kingdom under this Act; Head Office includes a branch office of a foreign life insurance company obtaining a license to engage in the life insurance business in the Kingdom under this Act; Life Insurance Business includes the reinsurance business; Capital Fund 4 (repealed) Life Insurance Agent means a person who is appointed by a company to solicit people to enter into a life insurance contract with the company; Life Insurance Broker means a person, who indicates the opportunity or arranges for a person to enter into a life insurance contract with the company for expected commission; Commission 5 means the Insurance Commission; Fund 6 means the Life Insurance Fund; Competent Officer means a person appointed by the Minister to act in accordance with this Act; Registrar 7 means the Secretary General of the Insurance Commission, or a person designated by him; 3 Section 5 A definition of Company was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 2551 (2008). 2551 (2008). (2008). 4 Section 5 Definition of Capital Fund was repealed by Life Insurance Act (No.2), B.E. 5 Section 5 Definition of Commission was amended by Life Insurance Act (No.2), B.E. 6 Section 5 Definition of Fund was amended by Life Insurance Act (No.2), B.E. 2551
3 The Minister means the Minister in charge of the enforcement of this Act. Section 6 8 The Minister of Commerce* shall be in charge of this Act and shall be empowered to appoint competent officers to issue Ministerial Regulations establishing fee, which shall not exceed a rate indicated in the Schedule annexed to this Act, and indicates other activities for executing this Act, as well as issues the notification in accordance with the provisions of this Act. The Ministerial Regulations and Notifications shall come into force upon their publication in the Government Gazette. Chapter 1 Companies Section 7 9 The life insurance business may be undertaken when a public company is established in accordance with the Law on limited public company, and granted a license to engage in the life insurance business from the Minister with the approval of the Council of Ministers. An application for the license to engage in the life insurance business under paragraph one shall be submitted by a company s promoter to the Minister. Further when the Minister, with the approval of the Council of Ministers, considers and approves of engaging in the life insurance business, the company s promoter shall proceed a registration of the establishment of a public limited company, and place a security deposit according to 7 Section 5 Definition of Registrar was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 8 Section 6 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 9 Section 7 was amended by the Life Insurance Act (No.2), B.E. 2551 (2008).
4 section 20, as well as, maintain a capital fund according to section 27 within six months from the date of the registration of the establishment of the public limited company. When the Minister considers and finds that the applicant complies with paragraph two, the license shall be issued to the established public limited company. In case where the public limited company is unable to place the security deposit or maintain the capital fund within the prescribed period, the approval to engage in the life insurance business shall be nullified. The application for and the issuance of the license shall be in accordance with the rules, procedures and conditions prescribed in the Ministerial Regulations. The Minister may prescribe any conditions. Section 8 A foreign life insurance company may establish a branch office for engaging in the life insurance business under this Act after obtaining a license from the Minister with the approval of the Council of Ministers. In such case the Minister may approve with prescribing conditions. An application for and issuance of the license to engage in the life insurance business by establishing the branch office of the foreign life insurance company under paragraph one shall be in accordance with the rules and procedures prescribed in the Ministerial Regulations. The branch office of the foreign life insurance company, which obtains the license to engage in the life insurance business, shall maintain its assets in Thailand in accordance with amounts, types, procedures and conditions prescribed by the Commission*. The amount of the assets prescribed by the Commission* shall not be less than the amount of the capital fund the company is obliged to maintain under section 27. The Minister shall grant the license under a provision of paragraph one only after the company places the security deposit in accordance with section 20 and maintains the assets in Thailand in accordance with paragraph three.
5 The company, which is a branch office of the foreign life insurance company, cannot open a branch office anywhere. The branch office shall include an office that is separated from a head office the company, no matter what name it is, and how it receives expenditures from the company directly or indirectly. However, this does not include a place, which the Registrar approves to be used as a location for an information operating unit, a document-keeping place or a training place in relation to the company s business. Section 9 10 The ordinary shares and preferred shares of a company shall be the shares with a named certificate, having a registered par value of not more than one hundred baht per share. The issuance of the preferred shares under paragraph one shall be in accordance with the law on the public limited companies. The Registrar may indicate the rules, procedures and conditions for protecting interests of an insured, which shall not be in conflict with the law of the public limited companies. Section 10 11 A company shall have the directors holding Thai nationality not less than three fourth of the total number of the directors, and have persons prescribed in (1) or (2), or (1) and (2) holding shares together more than seventy - five percent of its voting shares that have already been sold. (1) A Thai individual, or non-registered ordinary partnerships, whose all partners are Thai nationals. (2) A juristic person which is registered in Thailand and possessing the following characteristics: 10 Section 9 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 11 Section 10 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
6 (a) having a person under (1) holding shares exceeding fifty percent of the total number of its voting shares that have been sold, or (b) having a person under (1), or a juristic person under subsection (2) (a), or a person under subsection (1) and a juristic person under (2) (a), holding its shares exceeding fifty percent of the total number of its voting shares that have been sold. In case that the Commission deems appropriate, it may permit a person of non-thai nationality to hold shares, in a proportion up to forty-nine percent of the total number of its voting shares that have been sold, and persons of non-thai nationality to serve as the directors, in an amount of more than one fourth, but less than one half of the total numbers of the directors. In granting the permission, the rules on shareholding by the persons under paragraph one shall apply mutatis mutandis. In case that the Company s standing or operations are in a condition that might cause damage to an insured or public, the Minister, with recommendations of the Commission, is empowered to grant an indulgence to the Company to have shareholders or directors different from what prescribed in paragraph two. Such indulgence may be granted with prescribed rules or time condition. Section 11 Any person has acquired shares of any company, and such acquisition causes a number of the shares or the shareholders to violate section 10 and not to be in compliance with section 12. Such person may not hold the shares in excess of prescribed percentage against the company, and the company shall not pay dividends or any pecuniary benefit on the excess shares to such person or allow such person to exercise voting right on the said shares at a shareholders meeting. Section 12 For the purpose of compliance with section 10 and section 11, a company shall examine a registration of shareholders not less than three months prior to every shareholders meeting and inform the Registrar of a result of such examination by a list and within the period of time prescribed by the Registrar. In case that any shareholder is
7 found to hold shares in excess of the percentage prescribed in section 10, the company shall notify that person within fifteen days from the date of finding, and such person has to take steps to rectify within one month from the date of receipt of a notice. Section 13 The provisions of section 9, section 10, section 11 and section 12 shall not be applied to a company which is a branch office of a foreign life insurance company under section 8. Section 14 12 A transfer of business or an acceptance of the transfer, either in whole or in part, or an amalgamation of the companies, may be only executed between companies. In the case that the company wishes to transfer of the business or accept the transfer, either in whole or in part, or to enter into the amalgamation under paragraph one, the board of directors of the companies shall jointly prepare an operating scheme and submit it to the Commission. In granting its consent, the Commission may also prescribe any conditions deemed appropriate to protect the interests of the insured, or to ensure the stability of business operations of the company. Section 14/1 13 A transfer of the business, either in whole or in part, may commence after receiving the consent from the Commission according to section 14 paragraph two. The assignment of rights in such the transfer of business shall not be subject to the requirement to give notice to a debtor, according to section 306 of the Civil and Commercial Code, provided that such assignment is without prejudice to the debtor s right to set up a defense under section 308, paragraph two, of the Civil and Commercial Code. 12 Section 14 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 13 Section 14/1 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
8 In the case that the entire business of a company is transferred such transfer shall be valid when a transferor company and a transferee company comply with the conditions prescribed by the Commission under section 14, paragraph two, and shall revoke a license to engage in the life insurance business issued to the transferor company. Section 14/2 14 An amalgamation of the companies shall be in accordance with the law relating to public limited company. The amalgamation under paragraph one shall be valid when the amalgamating companies comply with the conditions prescribed by the Commission under section 14, paragraph two. It shall be deemed that the surviving company receives approval to engage in the life insurance business, according to section 7, paragraph one. When the amalgamation is registered, a security deposit is placed according to section 20, and a capital funds are maintained according to section 27, the Minister shall issue a license to the surviving company which revokes a license to engage in the life insurance business, issued to the predecessor companies. Section 14/3 15 In a transfer of the business of a company, either in whole or in part, to another company, or an amalgamation of the companies, if the transferred assets include any collateral other than the right of mortgage, right of pledge, or right arising from a suretyship, which must be passed to a transferee company by the virtue of section 305 of the Civil and Commercial Code, such collateral shall pass to the transferee company or the surviving company, as the case may be. 14 Section 14/2 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 15 Section 14/3 was added by Life Insurance Act (No.2), B.E. 2551 (2008).
9 Section 15 16 Apart from a fee for a license to engage in the life insurance business, a company must pay an annual fee for the operation of the life insurance business every year except in the year its license is issued. If any company fails to pay its annual fee within three months after the end of a calendar year, the Registrar shall issue an order to prohibit such company from expanding its business, until the company fully and correctly pays the fee and the Registrar revokes the order to prohibit such company from expanding its business. For the purpose of this section, in the case of expanding the business under paragraph two, the provisions in section 27/6, paragraph two, and the penalty in the case of a violation of section 27/6, paragraph one, as provided for under section 94/1, shall apply, mutatis mutandis. Section 16 17 (repealed) Section 17 18 A company under section 7, which will open a branch office, relocate a head office or a branch office, or dissolve a branch office, shall obtain a permission from the Registrar, and the provisions under section 8 paragraph six shall apply mutatis mutandis. An application for the permission and the permission shall be in accordance with the rules, procedures, and conditions prescribed by the Commission. Section 18 19 No person shall act as an insurer by entering into a life insurance contract with any person, unless he/she has obtained a license to engage in the life insurance business. 16 Section 15 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 17 Section 16 was repealed by Life Insurance Act (No.2), B.E. 2551 (2008). 18 Section 17 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 19 Section 18 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
10 No person shall use an insurance policy of a company, to which that person is not entitled, in accordance with this Act. Section 19 No person shall use a name or a description of life insurance, or any other words having the same meaning, except the following persons: (1) a company; (2) an association, the majority of whose members are officers or employees of a company; (3) an association, the majority of whose members are life insurance agents or life insurance brokers; (4) an employers association or labor union, the majority of whose members are officers or employees of a company; (5) a life insurance agent or a life insurance broker who use the description in his/her business as a life insurance agent or a life insurance broker, as the case may be; (6) a life insurance education institute or other institute relating to the life insurance business which use the description as its name, or (7) a director, an officer, an employee, a member, or a person having any status, position, or duty in the company, the association, the labor union, the life insurance education institute, or other institute relating to the life insurance business, under (1), (2), (3), (4) and (6), use such description to present the status, the position or the duty in the company, the association, the labor union or the aforesaid institutes. The use of the name, or the description in the business of a life insurance agent or a life insurance broker under (5) shall be in accordance with the rules, procedures, and conditions prescribed by the Registrar. 20 20 Section 19 paragraph two was added by Life Insurance Act (No.2), B.E. 2551 (2008).
11 Section 20 A company must have its securities placed with the Registrar as a security deposit in a value prescribed in the Ministerial Regulations. The securities of the company, placed with the Registrar, may be in cash, Thai government bonds, or any other assets prescribed in a notification of the Commission. The company may ask for a permission to change the security deposit placed, subject to paragraph one and paragraph two. Section 21 In the case that a value of a security deposit of any company is lower than the value prescribed in the Ministerial Regulations issued under section 20, the Commission * shall order such company to deposit an additional security up to the prescribed amount within two months from the date of receipt of the order. Section 22 In the case that a value of a security deposit of any company is higher than the value prescribed in accordance with the Ministerial Regulations issued under section 20, the Commission* shall be empowered to order a release of a portion of the security deposit which is in excess, upon the request of the company, provided it is able to prove the excessive value. Section 23 21 A company shall allocate a premium to an insurance reserve, for the insurance policies that remain binding, and other reserves as prescribed by the Commission. The reserves under the foregoing paragraph may be in cash, Thai government bonds, or other property, in accordance with the rules, procedures, conditions and ratios prescribed by the Commission. 21 Section 23 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
12 Section 24 22 The Commission is empowered to require a company to place no more than twenty-five percent of the amount of the reserves required under section 23 with the Registrar. The placement of the reserves under the foregoing paragraph shall be in accordance with the rules, procedures, and conditions prescribed by the Commission. The provisions of section 21 and section 22 shall apply mutatis mutandis. Section 25 In the case that a security deposit placed with the Registrar by a company under section 20 and a reserve placed by a company with the Registrar under section 24 are the asset, whose transfer or acquisition are required to register with the officer under the law or executed with a person involved in the transfer or acquisition of the assets, the Registrar shall notify a competent officer or the person involved in writing, and no officer or person shall transfer or dispose the asset until the Registrar notifies of revocation or change in the said asset in writing. Section 26 A security deposit under section 20 and a reserve under section 23, placed by a company with the Registrar under section 24, are not subject to execution during a period for which the company has not been dissolved. In case that the company is dissolves, a creditor, who has the right to receive a payment of debts from insurance, shall have the preferential right over the asset placed as a security deposit under section 20 and a reserve under section 23 placed with the Registrar under section 24, and shall have the right to receive payment from the assets prior to other creditors having other preferential rights. In case that the company is dissolves, a creditor, who has the right to receive a payment of debts from insurance, shall have the preferential right over the asset placed as a security deposit under section 20 and a reserve under section 23 placed with the Registrar 22 Section 24 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
13 under section 24, and shall have the same right to receive payment from the asset, as a secured creditor under the bankruptcy law. A creditor having the right to receive a payment of debts from insurance shall have the right to receive a payment from the company s assets, apart from the assets placed as a security deposit under section 20 and reserve under section 23, placed with the Registrar under section 24 like a holder or preferential rights on account of tax under the Civil and Commercial Code. Chapter I/I Maintenance of Capital Funds and Liquid Assets 23 Section 27 The Commission shall be empowered to prescribe the types and categories of capital funds, including the rules, conditions, and procedures for the computation of a company s capital funds. The company must maintain capital funds throughout the period of life insurance business operations, in proportion to its assets, liabilities, obligations, or risks, at the rate prescribed by the Commission. The Commission shall determine the maintenance rate of the capital funds under paragraph two in accordance with sizes or types of assets, liabilities, obligations or all or each type of risks. In the case that the company repurchases shares under the law on public limited companies, none of such shares shall be counted as a part of the capital funds. The capital funds shall be deducted in accordance with the rules, procedures, and conditions prescribed by the Commission. 23 Chapter I/I Maintenance of Capital Funds and Liquid Assets section 27 to section 27/7 was added by Life Insurance Act (No.2), B.E. 2551 (2008).
14 The company is prohibited from using its capital funds to incur any obligation, subject to the rules, procedures, and conditions prescribed by the Commission. Section 27/1 A company shall maintain its liquid assets in proportion to its assets, liabilities, obligations or reserve under section 23 which is not less than the rate prescribed by the Commission. The Commission, in prescribing the maintenance rate for liquid assets under paragraph one, may prescribe some or all types, or prescribe the proportion of each type thereof at any rate. If the maintenance rate of liquid assets prescribed by the Commission under this section increases, such increase shall be announced at least sixty days prior to the effective date. Section 27/2 Liquid assets include: (1) cash or bank deposits, in accordance with the rules, procedures, and conditions prescribed by the Commission; (2) Thai government securities or Bank of Thailand securities; (3) debentures or bonds, whose principal and interest are guaranteed by the Ministry of Finance, the Bank of Thailand, or the Financial Institutions Development Fund, or (4) Other assets, in accordance with the rules, procedures, and conditions prescribed by the Commission. The liquid assets under (2), (3), and (4) above shall be free from any obligation and able to be transferred. Section 27/3 A company shall manage its assets, liabilities, obligations and reserves under section 23 to be consistent with the period of receipt of insurance premiums, taking loans or receipt of payments from an insured or public, in accordance with the rules, procedures, and conditions prescribed by the Commission.
15 Section 27/4 A company shall allocate its assets for liabilities and obligations under life insurance contracts, in accordance with the types, categories, and proportions prescribed by the Commission. The company shall deposit reserves under section 23, except for the portion placed with the Registrar under section 24 and assets under paragraph one, with financial institutions, or manage them in accordance with the rules, procedures, and conditions prescribed by the Commission. The company is not permitted to use the assets under paragraph two to incur obligations, subject to the rules, procedures, and conditions prescribed by the Commission. Section 27/5 A company shall have a capital fund maintenance report presented to the Registrar every month, in accordance with the rules, procedures, and conditions prescribed by the Commission. In the case that the capital funds of any company are reduced to less than the capital funds level required to be maintained under section 27 paragraph two the company shall propose a scheme to revive the condition of its capital funds, within thirty days from the date of receipt of notice from the Registrar, or from the date of detection by the auditor or the company. The scheme under section 27 paragraph two shall consist of at least the following: (1) steps to increase capital funds to reach a sufficient amount; (2) the capital fund level anticipated to be maintained in each quarter, throughout the period of scheme; (3) the type and the business to be carried out, and (4) the period of scheme shall not exceed one year.
16 The Registrar shall review the scheme and give notice of his consideration to the company within thirty days from the date of receipt of the scheme. The Registrar may also prescribe conditions or time conditions in his consent. In the case when the Registrar rejects the scheme, or the company disagrees with the conditions or time conditions prescribed by the Registrar, the company shall have the right to appeal to the Commission within thirty days from the date of the receipt of notice. The Commission shall finish reviewing the appeal within sixty days from the date of the receipt of the appeal. A decision of the Commission shall be final. Section 27/6 While executing the approved scheme under section 27/5, a company may carry out its normal business, but may not expand its business until the company is able to maintain its capital funds in accordance with section 27 paragraph two. To expand its business under paragraph one means: (1) to accept new insurance, or to expand insured amount of the existing insurance policies; (2) to increase risks of investments in other business of the company; (3) to incur additional obligations, except as required by the existing obligations; (4) to enter into contract to appoint an additional life insurance agent or broker, or (5) to receive a transfer of business from another company. The Registrar shall prescribe and announce those cases which increase of risk under (2) or those cases which represent the incurrence of additional obligations under (3).
17 Section 27/7 The Registrar shall consider carrying out the acts under section 53 if any of the following events occurs: (1) a company fails to propose a scheme under section 27/5 to the Registrar, within the prescribed time; (2) a company fails to carry out activities under the scheme, or carries out activities not in accordance with the scheme under section 27/5, conditions or time conditions prescribed by the Registrar, or (3) a scheme proposed under section 27/5 is rejected and the company fails to appeal such rejection within the specified time or the Commission makes a decision to dismiss such appeal. Chapter II Supervision of a Company Section 28 Apart from life insurance, a company may invest in only businesses prescribed by the Commission* in the notifications. The Commission* may prescribe conditions for said business, to be conducted by the company. Section 29 Insurance policies, including related documents and appendix shall be in a form and texts as approved by the Registrar. When the Registrar deems appropriate or upon an application of the company, the Registrar may order to change, amend, add, or repeal the forms and texts approved by the Registrar under paragraph one, in part or in whole. In the case where the company issues an insurance policy different from the form or texts approved by the Registrar under paragraph one or paragraph two, an insured or beneficiary of the insurance policy shall have an option of holding the company liable under the insurance policy, or as the texts prescribed by the company, or as the forms and texts
18 approved by the Registrar. The company shall not be released from liability prescribed in this Act, whether or not the insured exercise such rights. In the case where the company issues an insurance policy in the form or texts which are not approved by the Registrar under paragraph one or paragraph two, the insured shall have an option of holding the company liable under the insurance policy or terminating the life insurance contract, and having the company return the premiums paid to the company. Whether or not the insured or beneficiary exercises the said right, the company shall not be released from liability prescribed in this Act. Section 30 The premium rates prescribed by the company shall be approved by the Registrar. When the Registrar deems appropriate or upon an application of the company, the Registrar may order to change such rate. The change of such rate shall not affect a premium rate in the insurance policies previously approved by the Registrar. Section 30/1 24 A text or pictures in an advertisement or prospectus shall be deemed an integral part of an insurance policy. If any text or picture contains a meaning contrary to the insurance policy, it shall be interpreted in a way that is favourable to the insured or the beneficiary of the insurance policy, as the case may be. A life insurance agent is not allowed to use any text or picture or an advertisement or prospectus which are not approved by the company to solicit a person to enter into a life insurance contract. Section 31 No company shall issue an insurance policy that states the amount payable to the insured or beneficiary in a foreign currency. 24 Section 30/1 was added by Life Insurance Act (No.2), B.E. 2551 (2008).
19 Section 32 A company shall obtain an approval of the Registrar for calculation of its profits, whether there is profit or not, with the view to pay dividends to shareholders. Section 33 A company shall not: (1) engage in the non-life insurance business; (2) reduce its capital without receiving written permission from the Registrar, with the approval of the Commission; (3) deposit money elsewhere besides the banks, finance, companies, or finance and securities companies; (4) keep cash elsewhere besides at the office of the company; (5) pay any money or other property to life insurance director, manager, consultant, official or employee as a commission or remuneration for or as a result of any business or activities, apart from pension, monthly wages, bonus or commission which may normally be paid to them; (6) pay any money or property to life insurance agents or brokers, apart from usually paid wages or pension; (7) advance any money or property to any person as a commission or remuneration for work to be done for the company; (8) pay commission to a person who assists in concluding an insurance contract, but not a life insurance agent or broker of the company; (9) buy or hold immovable property, except: (a) Those for use as premises for the business of the company or for the welfare of the officers and employees of the company as appropriate; (b) Those for use in investment in other business, as prescribed by the commission under section 28; or (c) The immovable properties acquired by the company as a result of a debt settlement or enforcement of mortgage.
20 The purchase or possession of the immovable properties under (a) or (b) or the acquisition of immovable property as a result of a debt settlement under (c) requires an written approval of the Registrar, Such approval may be granted with any conditions prescribed by the Registrar; (10) present special benefits to an insured or beneficiary under an insurance policy beyond what prescribed in the insurance policy; (11) accept premium from an insured in an amount less than the payable amount; (12) appoint or authorize persons other than life insurance agents, life insurance brokers, or officers of the company who have duties related to receipt of money, as a receiver of premium payments; (13) issue an insurance policy without a signature of an authorized director (s) to bind the company and without a seal of the company as registered, or without the signature of a branch manager of a foreign life insurance company, as indicated in a license to engage in the life insurance business, and without the seal affixed, as the case may be; (14) advertise the company or its life insurance business in a false or exaggerated manner; (15) appoint or assign persons other than life insurance agents of the company to induce or procure persons to enter into life insurance contracts with the company, except for the acts of directors, officers, or employees of the company, for and on behalf of the company, or (16) 25 sell or give any immovable property or movable property, with an aggregate value exceeding the amount prescribed by the Registrar, to any of its directors, or purchase assets from any of its directors including a person related to any of its directors, as announced by the Commission, unless receiving the consent of the board of directors of the company and the approval of the Registrar. 25 Section 33 (16) was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
21 Section 34 26 A company shall dispose of immovable property vested to the company under section 33(9) in the following cases: (1) The immovable property maintained by the company in order to use as a premise of business operation, or for the welfare of officers or employees of the company, or for investment in other businesses under sections 33 (9) (a) or (b), but no longer used, shall be disposed of within five years from the date of termination of use; (2) The immovable property, acquired by the company from a debt settlement or foreclosure under section 33 (9) (c), shall be disposed of within five years of the acquisition, unless the approval of the Registrar is obtained to maintain them for an activity under section 33 (9) (a) or (b). The Registrar may extend the period under (1) and (2) above, in accordance with the period prescribed by the Commission. The Registrar may also prescribe conditions for the extension of such period. Section 35 27 A director, manager, or person authorized to act on behalf of a company, or a consultant of the company, shall hold a bachelor s degree or higher qualification, or shall have work experience related to insurance business, and shall not have any of the following qualifications: (1) being, or having been declared bankrupt; (2) having been imprisoned by a final court judgment, for an offense relating to property; (3) having been a director, manager or person authorized to act on behalf of a company at the time such company had its life or non-life insurance license revoked, except for a person whom the Registrar, with the approval of the Commission, appointed to hold such office at such time. 26 Section 34 was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 27 Section 35 was added by Life Insurance Act (No.2), B.E. 2551 (2008).
22 (4) being a director, manager, or person authorized to act on behalf of another company licensed to engage in the life insurance business, unless an exception in accordance with the rules and conditions prescribed by the commission has been granted; (5) being removed from the position of director, manager, or person authorized to act on behalf of a company, under section 54; (6) being political official or a person holding a political office; (7) being a government official or an official of the Office of the insurance commission, having a responsibility to supervise the company, unless the company is a public enterprise or the appointment is made with the approval of the Commission, for the purpose of assisting in the operations of the company, or the person is appointed under section 54, or (8) having a bad record or carrying out any activity showing a lack of responsibility or due care that a person of such profession is supposed to have in his conduct. Section 36 28 Subject to section 71, no company shall assign or accept any persons to conduct life insurance by using its insurance policy. No company shall assign or accept any person to compensate claims under an insurance policy, in part or in whole, unless permission is granted by the Registrar. Section 37 No company shall delay a payment to an insured or beneficiary under insurance policy, or delay a payment of payable premium, or make a payment without appropriate reason, or return in a bad faith. 28 Section 36 was added by Life Insurance Act (No.2), B.E. 2551 (2008).
23 Section 37/1 29 If any petition relating to insurance, payment of compensation, monetary compensation, or other benefits under an insurance policy are made, the Registrar may have such petition reviewed and arrange conciliation. Section 38 30 Subject to the provisions of this Act, the Commission shall have the power to prescribe rules, procedures and conditions for the company to observe, in the following areas: (1) collection of premiums; (2) appraisal of the value o assets and liabilities of the company; (3) reinsurance; (4) classification of categories of expenses; (5) method for issuing and selling an insurance policy, surrender value rates of insurance policy, full payment value of insurance policy, extension of payment period, and conditions of payment thereof; (6) wage or commission rates for life insurance agents or brokers; (7) form, size, lettering, language, and content of documents indicating receipt of money by the company; (8) lending of money with an insurance policy placed as security; (9) distribution of dividends to insureds in installments; (10) types and maximum rates of insurance expenses; (11) receipt of money and payments, audits and internal controls; (12) compensation under life insurance contracts, and (13) minimum standards for the company s risk management system. 29 Section 37/1 was added by Life Insurance Act (No.2), B.E. 2551 (2008). 30 Section 38 was added by Life Insurance Act (No.2), B.E. 2551 (2008).
24 Section 39 A company shall open its office for the public business on the dates and at the times prescribed by the Commission*. However, the company may open its officer longer than prescribed. Section 40 A company shall keep the register and account book relating to its business, in accordance with forms and particulars prescribed by the Registrar. When there is an event to register in the register and account book, the company shall register it in the register and account books not later than seven days from the date of occurrence of the event. Section 41 The register and account books under section 40 shall be kept at an office of a company not less than ten years from the date of the last registration in the books or from the date which the company releases from the last liability, whichever period in longer. Section 42 An interested person may require to inspect a register under section 40, only particular which that person is concerned or may request a company to provide a certified copy of the said particular, provided that the person shall pay fee as prescribed by the Commission*. Section 43 31 A company shall prepare and submit financial statement and report on result of its operation to the Commission as following: (1) audited quarterly financial statements; (2) audited financial statements for the last calendar year by an auditor with his/her opinion, and (3) annual reports, showing the operating performance of the company. 31 Section 43 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
25 The preparation and submission of the financial statement and report under the paragraph one shall be in accordance with the 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 life insurance company, shall fulfill the obligations prescribed in paragraphs one and two, and submit an annual report of the foregoing life insurance company of which it is a branch within five months from the end of the accounting year of the foreign life insurance company. Section 44 In the case that the annual report submitted by a company under paragraph one of section 43 is incorrect or incomplete, the Commission* shall have the power to order a company to correct or complete the report within the period as prescribed by the Commission*. In the case that the company fails to comply an order under paragraph one, the company shall be deemed to have not submitted the annual report under section 43. Section 45 The Commission shall have the power to order a company to submit any reports or documents regarding the operation of its life insurance business. The Commission may also order the company to prepare explanation or clarification of the content of the report or documents. 32 The company shall completely and correctly prepare the reports or documents summited or presented or explanation. Section 46 33 A company shall publish its balance sheets and statements of income in a form prescribed by the Commission within fifteen days from the date of 32 Section 45 paragraph one was amended by Life Insurance Act (No.2), B.E. 2551 (2008). 33 Section 46 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
26 submission of the financial statements under section 43(2), at least in one mass-circulation daily newspaper not less than three days. Each company shall also post such notice in a conspicuous at its head office and branch office of the company at least one month. Section 46/1 34 For the purpose of giving public access to information regarding the financial standing and operating results of a company, the Registrar shall have the power to order a company to reveal such information, in accordance with the rules, procedures, conditions, and periods prescribed by the Commission. Section 47 35 A company shall submit to the Commission an annual report of the calculation of liabilities under insurance policies, certified by an actuary, in the form, rules, procedures, conditions, and period prescribed by the Commission. Section 48 The Registrar and competent officer shall have the power to examine activities and financial status of a company, and for the purpose of examination, the Registrar and the competent officer shall have the power: (1) to enter into the office of the company, during working hours, to obtain information and in so doing they shall have the power to call for documents or other evidence from directors, managers, consultants, officers, or employees of the company and to question the said persons; (2) to enter into the business place of the company or any premises where it is suspected that account books, documents, or seals, or any other documents relating the company s business, properties or debts are kept in order to inspect or evaluate the property of the company during the working hours or between sunrise and sunset; 34 Section 46/1 was added by Life Insurance Act (No.2), B.E. 2551 (2008). 35 Section 47 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
27 (3) to order the company or persons concerned with the company s business to deliver documents or other evidences, and (4) to summon the person indicated in (1) or (3) to give statements or to order them to submit statements of fact as required. The person concerned shall facilitate the performance of duty of the Registrar and the competent officer under paragraph one. Section 49 In performance of duty under this Act, the Registrar and competent officer shall present their identification cards in a form prescribed by the Ministerial Regulations, upon request by the person concerned. Section 50 Any interested persons may request a registers and related documents kept by the Registrar and copies certified upon submitting to the Registrar an application in a form prescribed by him/her. Section 51 36 Any company wishing to discontinue its life insurance business shall submit an application for a permission to do so with the Commission. To protect the interests of insureds, beneficiaries of the insurance policy, or interested persons, the Commission shall have the power to determine at least the following rules, procedures, conditions, and period to be fulfilled by the company before granting a permission for discontinuing of business: (1) method for managing or transferring the obligations under insurance policies that remain binding; (2) method for notifying insureds, beneficiaries of insurance policies, and interested persons to exercise their rights under law; 36 Section 51 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
28 (3) transfer or request for receipt of the reserve under section 23 placed by the company with the Registrar under section 24; (4) management of assets and liabilities in connection with the life insurance business and the business permitted to be carried out under section 28, and (5) period for execution of the transactions under (1), (2), (3) and (4). In case that the Commission permits the company to discontinue its life insurance business and the company intends to be dissolved, the dissolution shall take effect as from the date of receipt of permission for discontinuation and settle an account. But in case that the company does not intend to be dissolved, the company shall have its Memorandum of Association amended with changing its name and objectives in order to not be related to the life insurance business. Liquidation and amendments to the Memorandum of Association shall be carried out in accordance with the law on public limited companies. If the company which is a branch office of a foreign life insurance company discontinues its business, such company shall go into liquidation. The provisions of sections 65, 66 and 67 shall apply in the liquidation, mutatis mutandis. Section 51/1 37 Subject to section 26, paragraphs two and three, a company obtaining permission to discontinue its life insurance business shall return to the Registrar its life insurance business license, and shall submit an application for the return of the security deposit placed by the company under section 20. Section 52 Any proceeds which an insured or a beneficiary of the insurance policy or an heir of beneficiary has a right to receive under an insurance policy, if unclaimed against a company until the lapse of the period of prescription, shall be sent to 37 Section 51/1 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
29 the Fund by the company within one month from the end of a period of such period of prescription. Section 53 38 Where any event under section 27/7 occurs, or where evidence suggests the Registrar that a company is of a condition, or operates its business in such a way that may cause damage to an insured or public, the Registrar, with the approval of the Commission, shall have the power to order such company to improve its condition or its operations of business within period of time prescribed by the Registrar, or to increase or reduce its capital in accordance with section 27 paragraph two. If any company fails to increase or reduce its capital within the period of time prescribed by the Registrar under paragraph one, the Registrar s order shall be deemed to be a resolution of the company s shareholders meeting, as of the expiry of the prescribed period. Where there is an urgent need for a company to increase or reduce its capital, in order to support its condition and carry on its business, the Registrar, with the approval of the Commission, may order the company to immediately increase or reduce its capital. Such order is deemed to be a resolution of the shareholders meeting. The provisions of section 136 paragraph two (2), section 139 and section 141 of the Public Limited Companies Act B.E. 2535 (1992) shall not apply to the increase or reduction of capital under paragraphs two and three. Section 54 When there is an evidence appearing to the Registrar that the condition or operation of any company is such that damage may be caused to the insured and the public, or where its director or person responsible for the operation of any company fail to comply with the order of the Registrar under section 53, the Registrar shall have the 38 Section 53 was amended by Life Insurance Act (No.2), B.E. 2551 (2008).
30 power to order such company to remove its director or person responsible for operation of the company who is cause of such condition or operation of the company. In case that the Registrar orders the removal of any person under paragraph one, the company shall, with the Registrar s approval, appoint other person to replace within one month from the date of removal. In case that the company fails to remove such persons under paragraph one, or removes but fails to appoint other person to replace under paragraph two, the Registrar, with the approval of the Commission*, shall have the power to issue and posted in order of removal of such person or to appoint any person to replace no longer than three years. The provision of section 35 (4) shall not apply hereto. The person appointed under paragraph three shall be entitled to remuneration prescribed by the Commission*, which is paid by the assets of the company. During the period that the person holds office, shareholders of the company shall not adopt a resolution to revoke or change the order of the Registrar. The person removed by the order of the Registrar shall no longer be involved or manage, directly or indirectly, any affair of the company. The order of removal or appointment issued by the Registrar under this section shall be deemed to be a resolution of the shareholders meeting. Section 55 In the case that the Registrar gives an order under section 53 or section 54, but the financial conditions and operation of the company are not improved, the Minister may issue an order to control the company or revoke the company s license to engage the business. Section 56 When a company is placed under control, an order shall be sent to the company by the Registrar and posted in public place at an office of the company, the Government Gazette and at least two daily local newspapers, in the locale of a head office of the company.