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Published on August 21, 2007

If the bill has a smooth passage through the NLA, the new laws will be enacted promptly after their publication in the Royal Gazette, a senior official said, adding that insurance companies have not complained about the proposed change because their contributions to the new independent organisation are lower than they expected.

Department director-general Chantra Purnariksha said the new insurance organisation would still act as a regulator for Thailand's 99 insurance companies. However, it will have more flexibility to operate the insurance business effectively. The establishment of the new independent organisation is expected to be completed by next year.

The department has finalised a rate for contributions by insurance companies. "All insurance companies have agreed to the contribution rate, which is very low," Chantra said. "The payments aim to provide for effective operations and services."

All insurers will be required to pay an annual fee of no more than 0.5 per cent of their total premiums. They will be required to pay part of the fee every quarter.

The basic fee for general insurance businesses is 0.27 per cent of total premiums, while life insurers will be charged 0.18 per cent. Any delays to payment will result in a further 2-per-cent charge. Those who decline to make the contribution will face fines of between Bt100,000 and Bt1 million.

The new organisation is expected to receive income of Bt575 million in its first year of operations. If it finds that it has enough money to operate efficiently, it will stop collecting contributions.

Petchanet Pratruangkrai

The Nation