Insurance Broker in Thailand

How to establish an insurance company in Thailand ?

Before exploring the details of becoming an insurance broker in Thailand, it is essential to understand the requirements for setting up an insurance company. Regulations differ for domestic and foreign insurance companies.

Domestic Insurance Company :

To establish a life or non-life insurance company in Thailand, the following key requirements must be met:

1. Company Registration: The company must be registered as a Limited Company under the Civil and Commercial Code of Thailand.
2. Business Plan: A comprehensive business plan for a minimum of 5 years must be submitted.
3. Qualified Management Team: The management team must possess the necessary qualifications as stipulated by the Office of Insurance Commission (OIC).
4. Minimum Paid-up Capital: The minimum paid-up capital for a life insurance company is THB 500 million, while for a non-life insurance company, it is THB 300 million.
5. Share Par Value: The par value of each share must not exceed THB 100.
6. Thai Shareholders: Thai shareholders must hold at least 75% of the total issued shares.
7. Security Money: The company must provide security money as required by the OIC.

Foreign Insurance Company Branch:

For a foreign insurance company seeking to establish a branch in Thailand, the following conditions apply:

1. Life Insurance License: The foreign insurance company must have held a life insurance license in its country of origin for at least 3 years.
2. Company Name: The name of the insurance company must be provided.
3. Company Information: Detailed information about the foreign insurance company must be submitted.
4. Branch Head Policy: The policy and background of the proposed branch head must be provided.
5. Insurance License Copy: A copy of the head office’s insurance license must be submitted.

It’s important to know that the insurance industry is closely monitored by the Ministry of Commerce and the OIC because it affects public welfare. The OIC works under the Ministry of Finance and follows the rules and announcements set by the Ministry.

What are the requirements in Thailand ? 

To legally work as an insurance broker in Thailand, individuals and businesses must follow strict rules outlined in the Life Insurance Act and the Non-Life Insurance Act. Before discussing the process in detail, it’s important to understand the key requirements:

1. Approval from the Office of Insurance Commission (OIC): Both individuals and juristic persons must obtain proper approval from the OIC to engage in insurance brokerage activities.
2. Company Structure: The applicant must be a limited company, public company limited, or a bank with its head office in Thailand.
3. Director Qualifications: Directors must not have prohibited characteristics such as a history of bankruptcy, criminal convictions, or involvement in malfeasance.
4. Capital Requirements: The company must have at least three million Baht in paid-up capital and demonstrate a sound financial position through its financial statements.

Step-by-Step Guide to the Application Process for an Insurance Broker License

The application process for becoming an insurance broker in Thailand involves several detailed steps. Here’s a step-by-step guide to help you navigate through the process efficiently.

Step 1: Prepare Comprehensive Information

• Begin by gathering and preparing all necessary information about the juristic person and its financial position. This includes:
  • Business Operation Policy and Plan: Develop a detailed plan covering at least two years. This should include information on investment, revenue projections, good governance, risk management, and internal control.

Step 2: Assemble Operational Documentation

• Prepare detailed operational documentation, including:
  • Business Operations Diagram: Create a diagram of the brokerage business operations.
  • Office Locations and Organizational Structure: Provide information on office locations, personnel responsibilities, and the organizational structure.

Step 3: Ensure Qualified Personnel

• Identify and appoint at least two individuals from the applicant company who will be responsible for the brokerage operations. These individuals must:
  • Pass an Insurance Knowledge Test: They must pass a test prescribed by the Registrar to demonstrate their knowledge of insurance practices.

Step 4: Submit the Application

• Submit the completed application package to the Office of Insurance Commission (OIC). This package should include:
  • Comprehensive business operation policy and plan.
  • Detailed operational documentation.
  • Information about qualified personnel and proof of passing the insurance knowledge test.

Step 5: Pay Relevant Fees

• Pay the necessary application fees as required by the OIC. The fees will cover the processing of your application and the issuance of the license.

Step 6: Await Verification and Investigation

• The Registrar will investigate and verify the facts provided in your application. This may involve:
  • Review of Financial Position: Ensuring the company has a sound financial position.
  • Verification of Documentation: Checking the accuracy and completeness of the submitted documentation.

Step 7: License Issuance

• If all requirements are fulfilled and the investigation is satisfactory, the Registrar may issue the insurance broker license. The license may include specific conditions that must be followed.

Step 8: Maintain Compliance

• Once the license is issued, ongoing compliance is crucial. This includes:
  • Appointing Qualified Personnel: Continuously ensuring that at least two knowledgeable individuals are overseeing brokerage operations.
  • Financial Obligations: Keeping assets above liabilities and publicly releasing audited financial statements within five months after each accounting period ends.
  • Insurance Premium Management: Properly managing insurance premiums, keeping separate bank accounts for these premiums, and following regulatory guidelines for remitting premiums to insurance companies.

Establishing an insurance brokerage in Thailand requires strict adherence to the Life Insurance Act, Non-Life Insurance Act, and OIC regulations. Benoit & Partners can assist you in navigating these complex regulations, ensuring full compliance, and providing expert guidance throughout the process to establish a successful insurance brokerage. Contact us today to learn how we can help you achieve your business goals.