The Thailand Office of Insurance Commission (OIC) issued new good practice guidance on controlling risks associated with reinsurance for non-life insurance companies, setting minimum standards for how firms must manage reinsurance risk and conduct reinsurance activities in line with the OIC’s existing reinsurance requirements. The guidance expects insurers to identify and control a broader set of reinsurance-related risks beyond credit, operational, concentration and liquidity risk, including risks from inadequate reinsurance and emerging risks that could affect capital. It also sets governance and reporting expectations: insurers should establish a reinsurance policy that considers profitability and capital position; define risk appetite, risk tolerance and clear retention limits; and, when designing reinsurance programmes, assess probable maximum loss (PML), set maximum event retention (MER), and put in place preventative measures and recovery plans. Reinsurer and reinsurance broker selection should consider financial strength and expertise, and firms should monitor, audit and review reinsurance management regularly, with the board reviewing the framework annually and submitting a report to the OIC within 90 days after the main reinsurance contract period takes effect.
Thailand Office of Insurance Commission 2025-03-03
Thailand Office of Insurance Commission issues new good practice guidelines to strengthen reinsurance risk management and reporting for non-life insurers
The Thailand Office of Insurance Commission (OIC) released guidance for non-life insurers on managing reinsurance risks, setting minimum standards aligned with existing requirements. Insurers must address a wide range of risks, establish governance and reporting frameworks, and ensure robust reinsurance policies. The guidance mandates regular monitoring and board review, with annual reporting to the OIC.