Dr. Suthiphon Thaveechaiyagarn, the Secretary-General of the Office of Insurance Commission (OIC) revealed that the insurance industry has seen several improvements both in financial consultancy, new insurance product development consistent to the needs of the insured population. It also enhances the quality of service to be more competitive in the free market. Meanwhile, there are 544,989 insurance agents and brokers at the end of 2017 with 294,373 insurance agents and 250,616 brokers. Statistics said insurance agents and brokers are increasing every year. Even if the OIC has strict supervision, there are also complaints about insurance intermediaries. The year 2016, the Office of Insurance Commission received complaints about 178 individual insurance intermediaries and 314 ones in 2017, or up 76% from the same period of last year. The major cases are 232 cases of misappropriation of premiums paid. 45 cases that dealer misled insurance terms. 18 cases of selling by the lie that premium is a deposit. 12 cases that reselling new policy by canceling the existing one. And 7 cases that inciting customers to conceal important information on the insurance application. Such cases increased continuously which reflects the control loophole of products sales
To effectively regulate and promote the insurance products sales process consistent to current consumer conduct, the OIC has organized a hearing forum on the OIC draft proclamation revision in the principle, rules and procedures in issuance and sales of life and non-life insurance policies, and the duty of the life and non-life insurance agent and broker B.E…….. on April 9, 2018, at the Emerald Hotel, Ratchadaphisek, Bangkok. Over 170 participants from five associations, including the Thai Life Assurance Association, Thai General Insurance Association, Thai Insurance Brokers Association, Insurance Agents Association, financial advisors, the representatives from the Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) etc. The purpose of this hearing is to streamline the process of controlling the insurance products offering through quality channels and reducing discretion in regulatory supervision with international standard. By the end of 2018, the OIC shall have to enter into the Financial Sector Assessment Program (FSAP) which is the International Standard for Insurance (ICPs). The International Association of Insurance Supervisors (IAIS) will evaluate the efficiency of the insurance regulator of what level a country is, compared to the international standards
The OIC’s Secretary-General mentioned that the proclamation revision covers all sales channels of insurance agents/brokers, telesales, commercial bank and Thai Post Office. The electronic online channel will be under the proclamation of the sale through electronic channels. The OIC will announce other upcoming channels in the future that the law shall have to cover. The purpose is to focus on enhancing the market conduct of the insurance system that the insurance companies have to have the insurance products sales control system and treat customers fairly in key practices related to the insured and the public to reinforce the culture of fair treatment for customers, such as the issuance of insurance policies, indemnity and complaint management, the insurance policies sales offering by the insurance agent, brokers and banks. The Insurance companies have to be responsible in managing, monitoring and improving the quality of the insurance policy sales offering in all channels to ensure management system on marketing conduct with quality, transparency and confidence to the insured.
In addition, it has focused in compliance with ICP18 standard of insurance intermediaries which good governance, appropriate insurance intermediary supervision, authority in dealing with non-licensed individual or organizational intermediary and the possession of certain level of knowledge, experience, ethics and efficiency of the Insurance intermediaries. It should also be consistent with ICP19 standard of business conduct that the insurance company needs to have a corporate culture of fair customer treatment and the punitive measures with updating to have consistency between the punitive measures with the level of the offense. In this hearing meeting, the OIC has adopted the principle which also sends to all sectors to allow the insurance sector preparing to cope with the upcoming law. The comment from this hearing will be brought to the drafting committee for review. Considering this, the business sector is important part to push for revision to have the law acceptable, practicable and consistent with the situation. In particular, the persons insured shall have full and fair insurance benefits. Thereafter, the proclamation shall be forwarded to the OIC mid-year meeting and the transitional provisions for the insurance law would probably be launched for six months for adaptation period prior to the proclamation to be effective in early 2019.
"The OIC needs effective and efficient supervision with less burden or impediment to business operations, but need hearings from all parties concerned. The insurance company should emphasize to both central and regional insurance agents/brokers in insurance products sales offering with quality control. They should upgrade their knowledge to develop themselves continuously to keep track with financial development and rapid change of insurance industry, and hence being able to provide customers with accurate information at the most benefit.