Thailand: Financial Sector Assessment Program-Detailed Assessment of Observance-Insurance Core Principles
IMF Staff Country Reports, October 24, 2019
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- Thailand: Financial Sector Assessment Program-Detailed Assessment of Observance-Insurance Core Principles
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Bibliographic details
- Published: October 24, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513517650.002
Executive summary
- The government of Thailand has made a concerted effort to develop the insurance sector.
- The government has implemented a series of insurance development plans.
- Significant regulatory and supervisory challenges remain for Thailand to meet market changes and build trust for future growth.
- Consideration should be given to vesting more supervisory authority for key supervisory decisions with the Commission rather than with the Minister and Cabinet.
- Vesting authority with the Commission will help ensure the insurance supervisor has adequate powers to meet the objectives of insurance supervision.
- Insurance legislation should be amended to clearly establish a point at which it is no longer permissible for a troubled insurer to continue in business (winding up and exit from the market).
Key findings and analysis
- Progress: Concerted governmental efforts and sequential insurance development plans have advanced the sector.
- Remaining gaps: Regulatory and supervisory challenges persist that could impede the sector’s ability to adapt to a changing market and to sustain trust.
- Supervisory governance: Current allocation of decision-making authority with the Minister and Cabinet may limit the effectiveness of supervision.
- Market exit framework: The legal framework lacks a clearly established point prohibiting continued operation of a troubled insurer, complicating orderly exit and winding up.
Policy recommendations
- Reallocate supervisory powers:
- Vest more supervisory authority for key supervisory decisions with the Commission rather than with the Minister and Cabinet.
- Ensure the insurance supervisor has the statutory powers necessary to achieve insurance supervision objectives.
- Strengthen insolvency/exit rules:
- Amend insurance legislation to clearly establish a point at which a troubled insurer may no longer continue in business, facilitating orderly winding up and market exit.
Subject coverage and keywords
- Subjects: Auditing; Capital adequacy requirements; Financial institutions; Financial regulation and supervision; Insurance; Insurance companies; Internal controls; Public financial management (PFM); Revenue administration.
- Keywords: Auditing; board of directors; Capital adequacy requirements; cash flow; corporate governance; CR; credit risk; Global; independent auditor; Insurance; Insurance companies; insurance coverage; interest rate; Internal controls; ISCR; limited company; preference shares; risk assessment; risk capital; risk management; senior management; state enterprise; steering committee.
Content in this bundle
- Executive Summary