The Thailand Office of Insurance Commission has published an update to the methodology for calculating premium reserves for short-term insurance contracts, changing how insurers determine the required level of reserving for unearned premium and unexpired risk. Under the existing approach, the premium reserve for short-term contracts is based on the higher of the Unearned Premium Reserve (UPR) and the Unexpired Risk Reserve (URR) assessed on an overall basis across all product groups of an insurer. The revised criteria require insurers to calculate, for each underwriting class, the higher of UPR and URR and then sum the results across underwriting classes, with the stated objective of more accurately reflecting risk by business type, reducing the risk of insufficient reserves, and improving transparency and supervisory monitoring. The Insurance Commission has approved the changes in principle, and the Office ran a stakeholder process that included briefing meetings on 10–11 March 2025 and a comment period from 6–21 March 2025.
Thailand Office of Insurance Commission 2025-04-11
Thailand Office of Insurance Commission updates premium reserve rules for short-term insurance to apply UPR and URR test by underwriting class
The Thailand Office of Insurance Commission has updated the methodology for calculating premium reserves for short-term insurance contracts, requiring insurers to assess the higher of Unearned Premium Reserve (UPR) and Unexpired Risk Reserve (URR) for each underwriting class. This change aims to better reflect risk by business type, reduce insufficient reserves, and enhance transparency and supervisory monitoring. These changes have been approved in principle following stakeholder consultation.