Office of The Insurance Commission Notes to Financial Statements

OIC LogoTriangle Signifies the strength and represents 3 roles of the office which are supervision, promotion and development and the protection of the rights and benefits.

Two triangles that from a squareSignifies 4 main stakeholders that has important role to the develop-ment of Thai insurance business, the enterpriser of insurance business, the insured, people, and the Insurance Intermediaries and a symmetrical square signifies the impartiality, the credibility and the justice.

The gold picture in the middle is a tall gold lighthouse that lights the way. It shows the roles and duties of the office of insurance commission in being careful, supervising, supporting, promoting and recommending the way in solving insurance-related problems.

Gold & BlueSignifies the fact that the office is the organization that drives the insurance business.

WE For Insurance Excellence

OICOffice of Insurance Commission

SECTOR 1Organization

SECTOR 2Organization Structure

SECTOR 3Overview of Insurance

Business in 2014

12 20

24

SECTOR 5Direction and Trend

of Insurance

Business in 2015

SECTOR 4Operations and

Significant Development In 2014

CONTENTS

SECTOR 6Appendix

30 60

64

6 Office of Insurance Commission (OIC)

Mr. Rangsan Sriworasart

Permanent SecretaryMinistry of Finance Chairman

Ms. Chutima Boonyaprapas

Permanent Secretary Ministry of Commerce Commission Member (Since June 2014)

7

Executive Board

Mr. Prasarn Trairatvorakul

Governor, Bank of Thailand Commission Member

Mr. Vorapol Socatiyanurak

Secretary-General Securities and Exchange Commission Commission Member

Annual Report 2014


Mr. Amphol Wongsiri

Secretary-General Consumers Protection Commission Member

Mr. Payungsak Chartsuthipol

Commission Member in Business Administration

9

Ms. Tarisa Watanagase

Commission Member in Economics

Mr. Kowit Poshayananda

Commission Member in Finance

Executive Board

Annual Report 2014


Prof. Emeritus Chukiat Pramoolpol

Commission Member in Insurance

Mr. Karun Kittisathaporn

Commission Member in Insurance

11

Mr. Wattana Ratanavijit

Commission Member in Law

Mr. Pravej Ongartsittigul

Secretary-General

Executive Board

Annual Report 2014

SECTOR

1

Organization

VISION To be a continuously developing

organization that ensures the insurance

system will serve as a mechanism in

providing stability to the people and in

preparing for challenges in the future.

MISSION 1.To build confidence in and

accessibilities to the insurance system

2. To strengthen the capacity of

the insurance system

3. To develop laws and policyholders

protection system

4. To promote the infrastructure

of the insurance system

Sector 1 Organization

ROLES AND FUNCTIONS OF THE OIC

1.TheOfficeofInsurance

Commission(OIC)

The Insurance Commission Act

has been effective since September

1, 2007. As a result, the Department

of Insurance, initially a government

agency, has changed its status to

become the Office of Insurance

Commission (OIC), now an independent

state agency and a public company

similar to the Bank of Thailand and the

OfficeoftheSecuritiesandExchange

Commission. The OIC is responsible

for regulating and developing the

insurance business as well as protecting

theinsurancebenefitsandrightsof

the people.


Under this Act, the structure for the supervision of the insurance business comprises as follows:

1.1 TheInsuranceCommissionisresponsiblefortheformulationofrelevantpoliciesaswellasforthesupervision,promotionanddevelopmentoftheinsurancebusiness.TheCommissioniscomposedof:

Mr. Sriworasart obtained his master degree in business administration from Prince of Songkla University andfinishedNationalDefenceCollegeCourseClass2549,with extensive knowledge and experience infinancialandfiscalmanagement.Priortohisappoint-ment as Permanent Secretary, he used to head various important departments under the Ministry of Finance such as Deputy Permanent Secretary, Head of Income Group, Director General of the Central Accounting Department and Inspector General of the Ministry ofFinance.Hecurrentlyholdshisexecutivepositionin various organizations, including Chairman of Thai Military Bank, Chairman of the Board of Directors of the NationalCreditBureauCo.,Ltd.andChairmanoftheBoard of Directors of the Government Pension Fund.

Mr. Rangsan SriworasartPermanent Secretary Ministry of Finance, Chairman

Mrs. Boonyaprapas obtained her master degree in economics from Western Michigan University, USA and finishedNational DefenceCollegeCourseClass 2550, withextensiveknowledgeandspecializationineconomics. Prior to her appointment as Permanent Secretary, she has held important positions in the Ministry, including Director General of the Department of International TradeNegotiation,DirectorGeneraloftheDepartmentof International Trade and Director General of the Department of Internal Trade. Apart from her chief position at the Ministry of Commerce, she currently holds her key commerce-related positions such as Advisor to the Subcommittee on Trade Rules and Regulations, Industrial Council of Thailand and Advisor to the Board of the Council ofMarineMerchandiseExporters’AssociationofThailand.

Ms. Chutima BoonyaprapasPermanent Secretary Ministry of CommerceCommission Member (Since June 2014)

Mr. Trairatvorakul holds a doctorate degree in Business Administration from Harvard University, USA. Hepossessessubstantialbackgroundandexperienceworkingasanexecutiveinvariouspublicandprivateagenciesrelatingtofinancialandcapitalmarkets.Before assuming the position of Governor of the Bank of Thailand,hehasheldseveralexecutivepositions ina number of organizations such as Secretary-General oftheSecuritiesandExchangeCommissionandtheStockExchangeofThailand,andManagingDirectorofKasikornBankPCL.ApartfromworkingattheBankofThailand, he plays a contributive role in the communal and educational sectors, serving as Board member of theThaiRedCrossSocietyandSeniorExpertmemberof the Chulalongkorn University Council.

Mr. Prasarn Trairatvorakul Governor, Bank of Thailand, Commission Member

17

Mr. Socatiyanurak holds a doctorate degree in finance from theWharton School,University ofPennsylvania,USA.Anexpertintheareasofeconomics andfinance,hehasheldmanykeyexecutivepositions suchasViceChairpersonoftheNationalEconomic and Social Advisory Council and Chairperson of the Committee for Providing Comments and RecommendationsonNationalEconomicandSocial Development Plan to be submitted to the cabinet. He currently holds several senior positions, i.e. memberoftheNationalIndustrialDevelopmentBoard,the Thai Trade Competition Commission (TCC), and the Research and Development Commission of the Thai Senate.

Mr. Vorapol SocatiyanurakSecretary-General Securities and Exchange Commission, Commission Member

Mr. Wongsiri obtained his master degree in Development Administration (Public Administration) inthefieldofPublicPolicyandProjectManagementfrom theNationalInstituteofDevelopmentAdministration(NIDA).Asanexpertonlegalaffairs,hehascontinuallycontributed to social development and public charity activities, especially the creation of the network for the protection of consumers in the public, private and civic sectors. He used to hold several important positions in the Ministry of Justice, including Secretary-General of the Anti-Corruption in the Public Sector Commission (ACPSC) and Inspector General of the MOJ. Apart from his present position as Secretary-General of the Consumers Protection Commission, he also holds positionsofchairmanandseniorexpertmemberofcommittees and subcommittees of both public and private organizations such as the Committee for the Consideration of Market Dumping and Subsidizing (CCMDS), International Trade Department, the Committee oftheInstituteofISOCertificationandtheCommitteefortheNationalCreditDataProtection,theBankofThailand.

Mr. Amphol Wongsiri Secretary-General Consumers Protection Commission Member

Mr. Chartsuthipol obtained his bachelors degree inElectricalEngineeringfromChulalongkornUniversity and completed his executive program for Senior Administration of Justice (2nd class) and the Pillar of the Kingdom Program : The Royal Initiative for Advanced Leadership (Class 2012). He has vast knowledge andexperienceinbusinessadministration,presentlyholdingexecutivepositions inthepublicandprivatesectors,namely board member of Bangkok Bank, chairman of the Corporate Governance and Social Responsibility Committee of Krungthai Bank and chairman and senior boardmemberoftheNationalCatastropheInsurancePromotion Fund Commission.

Mr. Payungsak Chartsuthipol Commission Member in Business Administration

Annual Report 2014


Ms. Watanagase holds an honorary doctorate degree in Economics from Keio University, Japan,andhascompletedtheNationalDefenseCourseforpublic, private and political sectors (Class 3) from the NationalDefenseCollege.Sheisanexpertineconomicsand finance, havingworked inmany key positions in the Bank of Thailand such as the Governor of the Bank of Thailand, the Deputy Governor for Financial Institutions Stability, the Assistant Governor (Financial Markets Operations Group), the Assistant Governor (Financial Institutions Policy Group), and the Assistant Governor (Financial Institutions Supervision Group).

Prof. Pramoolpol holds a master degree in Insurance from the Wharton School, University of Pennsylvania, USA, which he had achieved through the scholarship awarded by the Thai Government (theOfficeofCivilServiceCommission).He isveryknowledgeablewithmorethan40years'experiencein insurance, having worked in a great number of key positions in various agencies including Director of the insuranceOffice, theMinistryofCommerce,BoardChairmanofThaiCharoenLifeInsurancePCL;and Director of Thailand Insurance Institutes. He also contributed to the educational sector serving as a special instructor for a number of public and private universities, and as the Dean for the Faculty of Risk Management and Servicing Industry (Insurance), Assumption University. Currently he serves as a senior expertmemberoftheCommitteeforRoadAccidentVictims Protection.

Mr. Poshyananda holds a doctorate degree in EconomicsfromCornellUniversity,USA.andgraduated from the National Defense College (Class 30). Hewas also awarded an honorary doctorate degree in Economics fromChulalongkornUniversity.He isanexpert in economics andfinance, currently servingas chairman of the Directors, Sansiri PCL, and anexpertmemberofvariouscommitteesinpublicandprivate sectors such as chairperson of the Board, Thai Institute of Directors (IOD), the Director, Cambridge Thai Foundation (CTF) under the patronage of Her MajestytheQueen;themember,WalailakUniversityCouncil;andthemember,theOfficeoftheCouncilof State of Thailand.

Ms. Tarisa Watanagase Commission Member in Economics

Mr. Kowit PoshayanandaCommission Member in Finance

Prof. Emeritus Chukiat Pramoolpol Commission Member in Insurance

19

Mr.RatanavijitholdsamasterdegreeinPublic Administration from Indiana University, USA and graduatedfromtheNationalDefenseCollege(Class21). He is an expert in law and currently holds a number of key positions in the legal and political bodies such asCouncilMember, theOfficeof theCouncil of State of Thailand, Member in Monitoring andEvaluationCommittee,theOfficeofthePublicSector Development Commission (OPDC), Member of the By-laws Consideration Committee, the Secretariat to the Cabinet, and Member of the Administrative ProcedureCommittee,theOfficeoftheCouncilofState. of Thailand

Mr. Ongartsittigul holds a master degree in Business Administration (Finance) from New Hamp-shire College, USA. He is an expert in the area of finance and insurance, with vast experience in managing a number of agencies in public and private sectors. For example, he was the Vice President of J.P. Morgan Securities (Thailand) Ltd., Senior Vice President, Bank of America NA., Bangkok Branch, and Senior Assistant Secretary General, Securities and Exchange Commission. He has also taken part in some activities that contribute to the benefit of the public. For example, he serves as member of the Investment Advisory Committee for the Thai Red Cross Society and member of Code of Ethics Committee for the Federation of Accounting Professions.

Mr. Kittisathaporn holds a master degree in EconomicsfromSyracuseUniversity,USAandcompleted the National Defense course for participants frompublic, private and political sectors (Class 8) from the NationalDefenseCollege.Heisknowledgeableandhasalotofexperienceintheareaofeconomicsandinsurance. He used to hold a number of key positions in the Ministry of Commerce such as the Permanent Secretary of the Ministry of Commerce, Deputy Permanent Secretary of the Ministry of Commerce, Director General of the Insurance Department, Director General oftheDepartmentofBusinessEconomics,andDirectorGeneral of the Department of Foreign Trade. Currently he serves as Director in various companies in the privatesectorsuchastheBankofAyudhyaPCL,andCentralPattanaPCL.

Mr. Karun Kittisathaporn Commission Member in Insurance

Mr. Wattana Ratanavijit Commission Member in Law

Mr. Pravej Ongartsittigul Secretary-General

Annual Report 2014

SECTOR

2

Organizational Structure


Secretary-General

Strategic Planning & Enabler

Assistant Secretary-General

(Organization Strategic)


(OIC Advanced insurance Institute)


(General Administration)

Insurance Promotionand Development


(Insurance Promotion)


(Development)

Assistant Secretary -General

(Regional Insurance)

Deputy Secretary-General (Promotion and Development)

Organizational Structure of OIC

Insurance Commission

23

Audit Committee

Primacy Activities

Legal, Litigation and Policyholder ProtectionInsurance Stability

Deputy Secretary-General (Examination)

Deputy Secretary-General (Supervision)

Deputy Secretary-General (Legal, Litigation and

Policyholder Protection)


(Legal)


(Policyholder Protection)


(Litigation)


(Insurance Products

Supervision)


(Investment (Insurance

Supervision)

Assistant Secretary General

(Supervisory Standard

Development)


(On-site Examination)


(Financial Analysis and Examination

Development)

Annual Report 2014

SECTOR

3

Overview of Insurance Business in 2014


1. The Thai 12 Months Insurance Business in 2014

1.1 The Growth of Insurance Business

The Thai economy in the fourth quarter of

2014 grew 2-3%, an increase from 0.6% in the previous

quarter, leading to an annual growth rate of 0.7% as

a result of the growth of 2.7% of the non-agricultural

sector whereas the agricultural sector shrank 1.6%.

Both domestic and foreign demands also grew. The

total spending on investment grew from 2.9% in the

previousquarterto3.2%.Thenetexportsofgoods

and services grew 21.9% as a result of the increase in

the foreign demand and the decrease in the volume

ofimports.Meanwhile,thegovernment’sspending

during the same quarter grew 5.5%, resulting from

net spending on goods and services which grew 8.7%,

whereastheprivatesector’sspendingonconsumption

grew 1.9%, a decrease from 2.2% in the previous

quarter(Source:NESDB).

Despite the overall slow-down of the Thai

economy, the insurance business could still grow,

earning totally 704,000 million baht for its 12 months

(Jan.-Dec.) direct premiums for 2014, a growth of

9.23%. Of this, 498,752 million baht came from life

insurance direct premiums, and 205,247 million baht

came from non-life insurance direct premiums, a

growth of 13.00% and 1.05% from the previous year,

respectively.

LifeNon-Life

Total

100,000 -

300,000

500,000

700,000

200,000

400,000

600,000

800,000

2010

296,213

122,756418,969

2011

328,897

138,755467,652

390,517

179,530570,047

2013

441,372

203,121644,492

2014

498,752

205,247704,000

%Million baht

14.57 11.03 18.74 13.02 13.00

13.86 13.03 29.39 13.14 1.05

14.36 11.62 21.90 13.06 9.23

35.00

25.00

30.00

20.00

10.0015.00

5.00

-2010 2011 2012 2013 2014

Growthrateofinsurancebusiness(%YOY)

Jan.-Dec.2010-2014

PremiumJan.-Dec.2010-2014

LifeNon-Life

Total

2012

27

1.2 Growth of insurance Penetration

Premium(millionbaht)

2013 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nov. Dec. Jan.-

Dec.

GDP(QoQ%) 5.40 2.90 2.70 0.60 -0.50 -0.40 0.60 2.30 - - 0.70

Total

YoY%

Ins. Penetration

159,392

20.77

5.31

153,891

14.05

5.21

157,500

13.08

5.39

173,579

5.94

5.75

185,362

16.29

6.09

170,243

10.63

5.62

164,657

4.54

5.54

183,738

5.84

5.94

58,566

8.20

68,249

6.81

704,000

9.23

Life

YoY%

Ins. Penetration

108,273

20.73

3.61

104,564

12.93

3.54

108,577

14.40

3.72

119,935

5.82

3.97

133,698

23.48

4.39

120,173

14.93

3.97

117,128

7.88

3.94

127,753

6.50

4.13

43,511

10.62

48,383

6.83

498,752

13.00

Non-life

YoY%

Ins. Penetration

51,118

20.85

1.70

49,328

16.48

1.67

48,923

10.26

1.67

53,652

6.22

1.78

51,664

1.07

1.70

50,070

1.50

1.65

47,528

-2.85

1.60

55,985

4.15

1.81

15,055

1.77

19,865

6.13

205,247

1.05

A total of 61,182,771 insurance policies

were sold in 2014, an increase of 6.40% from the

previous year, of which 6,567,283 were life-insurance

policies and 54,615,488 were non-life insurance

policies, an increase of 20.77% and 4.90%, respec-

tively.

1.00-

2.003.004.00

5.006.007.00

%

2007

2.37 2.44 2.86 2.93 3.12 3.44 3.71 4.11

1.07 1.12 1.19 1.21 1.32 1.58 1.71 1.69

3.44 3.56 4.05 4.15 4.44 5.02 5.42 5.80

2008 2009 2010 2011 2012 2013 2014

Insurance Penetration end of year 2007-2014

Life

Non-Life

Total

Annual Report 2014


1.3 Performance Outputs

Insurance business performance outputs in

2014showedanetprofit(loss)of65,268millionbaht,

a decrease of 1.79% from the previous year due to

the fact that life insurance could earn 577,785 million

baht, an increase of 13.00% from the previous year,

whereas a total amount of 529,963 million baht had

been paid, an increase of 13.68%, leading to a total

profitof47,823millionbaht,oranetprofit(loss)of

Compared to the gross domestic product (GDP)

oftheThaieconomyin2014whichexpanded0.7%,

the insurance business grew 9.23% from the previous

year. The total amount of premiums from the insurance

business could make its 5.80% penetration in

the GDP, 4.11% from life insurance and 1.69% from

non-life insurance.

Item

(millionbaht)

2013 2014

Mar. June Sep. Dec. Mar. June Sep. Dec.

Total assets

YoY%

-Life

YoY%

-Non-life

YoY%

2,386,471

3.26

1,790,095

16.71

596,376

-23.27

2,365,466

2.64

1,806,578

13.99

558,888

-22.36

2,388,450

2.91

1,844,474

11.40

543,976

-18.23

2,407,055

2.90

1,904,586

11.02

502,470

-19.43

2,502,346

4.86

2,012,285

12.41

490.061

-17.83

2,592,765

9.61

2,097,174

16.09

495,591

-11.33

2,668,739

11.74

2,184,660

18.44

484,079

-11.01

2,751,912

14.33

2,280,084

19.72

471,828

-6.10

Investment assets

YoY%

-Life

YoY%

-Non-life

YoY%

1,964,640

13.73

1,708,158

16.62

256,445

-2.40

1,965,971

11.28

1,714,988

13.75

250,983

-3.14

2,010,467

9.97

1,752,316

10.73

258,151

5.10

2,061,617

9,07

1,805,681

9.96

255,937

3.22

2,173,521

10.61

1,905,963

11.55

267,558

4.33

2,274,422

15.69

1,991,454

16.12

282,968

12.74

2,368,488

17.81

2,075,542

18.45

292,945

13.48

2,466,354

19.63

2,173,497

20.37

292,857

14.43

NetProfits

(Losses)

(millionbaht)2013

2013 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD

Total

YoY%

66,457

24.08

19,269

67.39

18,470

9.99

16,438

-16.73

12,280

122.69

17,595

-8.69

15,807

-14.42

16,325

-0.69

15,541

26.56

65,268

-1.79

Life

YoY%

43,559

9.94

9,829

-20.64

13,334

0.69

11,980

22.30

8,416

100.47

10,466

6.47

11,611

-12.92

11,116

-7.21

10,400

23.57

43,592

0.08

Non-life

YoY%

22,898

64.30

9,440

1,180.16

5,136

44.67

4,458

-55.17

3,864

193.53

7,129

-24.48

4,196

-18.30

5,209

16.84

5,142

33.07

21,676

-5.34

43,592 million baht, an increase of 0.08% from the

previousyear.Non-lifeinsurance,inthemeantime,

could earn 146,669 million baht, an increase of 6.01%

from the previous year, whereas a total amount of

128,823 million baht had been paid, an increase of

4.21%,leadingtoatotalprofitof24,912millionbaht,

adecreaseof7.99%,oranetprofit(loss)of21,676million

baht, a decrease of 5.34% from the previous year.

29

1.4 Total Assets and Investment Assets

Up to December 31, 2014, the insurance

business had its total assets worth 2,751,912 million

baht, a growth of 14.33% from the previous year. Of

this, 2,280,084 million baht belonged to life insurance

business, a 19.72% increase from the previous year,

whereas 471,828 million baht belonged to non-life

insurance business, a 6.10% decrease from the previous

year.

Investment assets of the insurance business

up to December 31, 2014 total 2,466,354 million

baht, a 19.63% increase from the previous year, or

89.62% of the total assets. Of this, 2,173,497 million

baht belonged to life-insurance business, a 20.37%

increase from the previous year, or 95.33% of the

total assets of life-insurance business, and 292,857

million baht belonged to non-life insurance business,

a 14.43% increase from the previous year, or 62.07%

of the total assets of non-life insurance business.

Investment assets of life insurance business and non-life insurance business differ in terms of the specificnatureofinsuranceasfollows:

❖ Investment assets of life-insurance

business were used for :

-Lowriskinvestment:Atotalamountof

1,245,797 million baht was used to buy bonds

accounting for 57.32% of the total investment

assets, an increase of 17.59% from the previous year.

- High risk investment : A total amount of

159,811 million baht was used to buy capital shares,

accounting for 7.35% of the total investment assets,

an increase of 22.59% from the previous year.

❖ Investment assets of non-life insurance

business were used for :

-Lowriskinvestment:Atotalamountof

111,008 million baht was deposited in the bank,



- High risk investment : A total amount of

75,105 million baht was used to buy capital shares,



Annual Report 2014


Sector

4

31

Operations and Significant Development in 2014

Annual Report 2014


Operations and Significant Development in 2014

The Office of Insurance Commission (OIC) conducted its operations under the framework of the Second Insurance Development Plan (2010-2014) which is the principal guideline for supervising and promoting the overall insurance system development to achieve high efficiency, transparency, credibility and to protect the people’s insurance benefits and

rights as follows :

33

OIC and Tourism Authority of Thailand (TAT) sign an MOU on cooperation in tourism insurance

Measure 1 : To build confidence and gain access to the insurance system in every sector

First and foremost priority in developing the Thai insurance system is

to gain wide acceptance by the general public and the society as a whole

that the insurance system is an important mechanism in building stability

of life and property earned out of business and investment against risks of

unexpectedincidents,assurednessofearninganincomefortheinsured

personsandtheirfamiliesaswellasinstrengtheningthecountry’ssocial

and economic system through the following measures :

1.InsuranceLiteracy

1.1 The OIC took initiatives to promote and develop insurance

by signing MOU with public and private organizations to integrate

their cooperation in providing the general public with knowledge and

understandingabout insuranceanditsbenefits.TheTourismAuthority

ofThailand (TAT), forexample, signedanMOUwithOIConpromoting

tourism insurance, whereas the Department of Rights and Liberty

Protection, the Thai Life Insurance Association and the Thai Non-Life

Insurance Association signed an MOU on promoting knowledge about

theinsured’srightsandbenefitsaccordingtotheActonRemuneration

fortheDamagedandCompensationandExpensesforDefendantsinCriminal

CasesB.E.2554

Themainobjectivewastoencouragethepeopletogaintheirbest

benefitsandalsostrengthenthecountry’ssocialandeconomicsystem.

Major issues focusedonsuchmattersas life insuranceandnon-life in-

surance,maintainingbenefitsfrominsurance,compulsorymotorvehicle

insuranceaccordingtoprotectionforMotorVehicleVictimsActB.E.2535

(1992) (amended inB.E.2551)andmicro-insurance. Activities included

the following :

Annual Report 2014


1.3 Setting up insurance youth programs in

schools to implant knowledge and understanding

of insurance, particularly life insurance and the

compulsory motor insurance. Activities took the

form of games and contests in which schools and

teachers nation wide participated, with prizes given

to schools and teachers who had efficiently incorpo-

rated insurance into their teaching curriculum. Grants

and scholarships were also awarded to students

with outstanding performance in their study and

presentation of information on insurance in various

forms such as songs, shows and talk shows. Details

are as follows :

Year 2012 2013 2014

Number of participating schools

513 554 603

There were two categories of awards, one

for schools and the other for students, consisting of

three levels each i.e. provincial, regional/Bangkok, and

national levels. Those national outstanding award

winners, i.e. 1st, 2nd and 3rd prize winners received the

awards at “Insurance Day” Fair where the awarding

ceremonywasheldonNovember14,2014.

OIC organizes its campaigns on road safety in insurance organizations and road accident reduction during

Songkran Festival 2014 and New Year Festival 2015

1.4 Organizing insurance volunteers program

to train a total of 7.391 insurance volunteers in

communities and regional areas. Activities consisted

of dissemination of information on insurance so that

the local communities are accurately and adequately

informed and can learn how to manage their risk

appropriately.

1.5 Organizing PR Project on “Modern

Generations Care for Motor Insurance”. Activities

consisted of short advertisement (minimum length

30 seconds) contest on compulsory motor insurance

to inform students of the benefits and importance of

compulsory motor insurance.

Short Advert isement Contest Awarding

Ceremony for higher education level under the

theme “Compulsory”

1.2 Organizing insurance promotional activities

at the main and regional offices with the participation

of organizations from both the public and private

sectors, e.g. campaigning on road safety at agencies

in the insurance-industry sector and on prevention

and minimization of road accidents during Songkran

Festival 2014 and New Year Festival 2015.

35

2. Promotion of Good Governance inInsuranceBusiness

The OIC, seeing the importance of corporate

management structure and a sufficient number of

qualified personnel to support each company with

good governance, issued its announcement on

Criteria, Method and Conditions on Money Receiving

and Paying, Auditing and Internal Control for Life/

Non-Life Insurance Companies B.E. 2014, effective

on October 16, 2014, which required such companies

to appoint an auditing committee consisting of at

least three members two of whom, at least, must be

independent members. An Internal Audit Unit, Law

Compliance Supervising Unit as well as a Compliance

Officer who is to act as the coordinator with the OIC

on the company’s behalf must also be appointed.

3.National CatastropheInsuranceFund

(NCIF)

National Catastrophe Insurance Fund has been

modified to embrace four additional natural disasters,

i.e. storms, floods, earthquakes and hailstorms, apart

from the original six types of risks consisting of fires,

lightings, explosions, vehicles, aircraft and water-relat-

ed risks, with the insurance amount of 20,000 baht/

year for a premium of 100 baht. The main purpose

of this modification, to take effect as of January 1,

2015, is to provide the general public with access to

wider protection.

The Fund’s performance results (as of

December 29, 2014) are as follows :

1) Summary of Catastrophe Insurance

Policies sold :

❖ the number of policies still active :

1,371,083 policies

❖ the insured amount for current

protection : 63,667 million baht

❖ the accrued amount of premiums :

1,275 million baht

❖ the reinsurance premium amount

in proportion to the Fund for current protection :

19,245 million baht❖ the accrued amount of reinsurance

premiums in proportion to the Fund : 731

million baht

2) The total number of companies with

non-life insurance policies sold : 51 companies

3) No compensation claims and reinsurance

premiums overdue for payment

Annual Report 2014


DataonCatastrorheInsurancebyArea*

4.DevelopmentofDiverseInternationalInsuranceProducts

4.1 Development of 2014 In-Season Rice Crop

Insurance Policy : This was joint cooperation between

the OIC and the Bank of Agriculture and Agricultural

Cooperatives (BAAC), the Office of Financial Economics

(OFE), the Department of Agricultural Extension (DAE)

and the Thai General Insurance Association (TGIA) to

help minimize farmers’ risk of seven natural disasters,

including flooding/heavy rainfall, drought/long period

of absence of rain, storm/typhoon, cold weather/

frost, hailstorm, and fire. The compensation amount

is 1,111 baht/rai, whereas that for damage by pets/

epidemic diseases is 555 baht/rai. Insurance Is

classified into five categories according to the risk level

of each area, i.e. area with lowest risk (light green),

area with very low risk (green), area with low risk (dark

green), area with moderate risk (yellow) and area with

high risk (red). Premium rates differ according to the

risk level, of course, and the farmers are to pay the

premium 60-100 baht/rai, depending on the risk level

of their area, whereas the government is to subsidize

the excess amount of premium. The total amount of

annual rice insurance premium for the year 2014 was

360,348,544 baht from 100,715 policies.

4.2 Development of Domestic Travel Accident

Insurance Policy (for Foreign Tourists) : This product

was launched to promote tourism insurance under

the “Project on Insurance for Foreign Tourists”, a kind

of voluntary insurance, the main objective of which

is to provide tourists with confidence in their safety

while travelling in Thailand. This will not only lead to

a good image but also promote tourism of the country.

4.3 Modification of Medical Expense Coverage

for In-Patients who did not need to be admitted

(Day Case). Due to medical advancement, patients

with some diseases do not have to be admitted to

hospital, and insures who bought daily compensation

benefit will be paid one-day compensation like an

in-patient for their operation under 1 of 18 specified

items. This new regulation has become effective

according to the registrar’s Announcement on Daily

Compensation for Day-Case Patients, which insurance

companies must keep their customers informed of

this additional benefit.

Area

No.oflocationsofinsuranceproperties

Premium(millionbaht)

Insuredamount(millionbaht)

Houses SMEs Industries Total

Provinces in risk areas according to estimation**

570,555 159 25,500 909 1,727 28,136

Other 72 provinces 800,528 185 34,128 1,016 387 35,531

Total 1,371,083 344 59,628 1,925 2,114 63,667

* Referring to policies currently under protection

** ReferencebasedonestimationofCatastropheInsuranceundertheNationalCatastropheInsuranceFundinfive

provinces,i.e.Ayudhya,Pathumthani,Nonthaburi,NakhonPathomandBangkok

Sources:1)http://www.ndwc.go.th2)http://www.thaiflood.com3)http://flood.gistda.or.th4)http://www.nirapai.com

37

For all that, the OIC, being fully aware of

suitability and compliance with medical treatment by

operation/medical procedure in terms of the number

of days needed for each day-case patient, issued its

Announcement on Appointment of Working Group for

Considering Payment of Daily Compensation to Day-Case

Patientstobebestsuitedtothose18itemsspecified

under "treatment by operation/medical procedure"

category.

4.4 Provision of Mortgage Reducing Term

Assurance (MRTA) Policy. The kind of policy is offered

as an additional choice for customers who can buy

the policy through various channels other than

commercial banks. The main purpose is to promote

the business regulation via the market mechanism

and the people can buy their policy directly from

insurance companies instead of from the bank they

areapplying for the loan,whichwillbenefit them

as follows :

1. The premium will be cheaper because

there is no commission.

2. It will be easier for insures to make a

refinance because there is no need to terminate

the current policy to buy a new one.

3. The policy can be terminated within

30 days (free-look period) in case a loan contract

has not been signed.

4.5 Standardization of Coverage under

Temporary Receipts Presently insurance companies

provide coverage during their screening process

basedondifferenttermsandconditionsasspecified

in the temporary receipt. The OIC, in cooperation

withthelifeinsurancesectorandtheLifeInsurance

Association of Thailand, drafted standard coverage

conditions for the temporary receipt to be used by

all insurance companies. This will also set the same

guideline for practice for life insurance business to

follow in terms of determination of coverage date

under different situations, the period of appeal right,

suicide and pending period.

Annual Report 2014


5.MicroInsurancePromotion

The OIC promotes and supports micro

insurance’s sustainable growth. With the cooperation

of the private sector, the OIC developed a micro

insurance product so-called “Insurance Policy 200”

and held a training course and promotion event under

the theme “Micro Insurance Campaign for the People

2014”. The details are as follows :

Insurance Policy 200 for Individuals (Micro

Insurance) was inaugurated at “Micro Insurance

seminar was held by the Non-Life Insurance Association

of Thailand on September 19, 2014 at the Tawanna

Hotel, Bangkok.

2.2 Lecture on “The Role and Function

of the Office of Insurance Commission and Micro Insur-

ance” as part of the training course for the provincial

consumers protection subcommittees, municipalities

and Tambon Administration Organizations (TAOs)

organized by the Office of Consumers Protection

Commission in cooperation with the National Institute

Campaign for the People” where four provincial

insurance exhibitions were organized as follows :

1. 16th Anniversary of Country-Wide

Debt Clearing Exposition, April 26, 2014 at Chonburi

City Hall Yard

2. Happiness Building Man Exposition,

August 2, 2014 at Suratthani Provincial Sports Complex


August 17, 2014 at Nong Prachak Park, Udornthani


September 13, 2014 at Phra Pathom Chedi compound,

Nakhon Pathom

2) Training/Lecturing/Seminar on Micro

Insurance or “Insurance Policy 200”

2.1 Lecture on Micro Insurance Direction

and Insurance Business in the seminar on “Guideline

for Good Practice of Micro Insurance” by Assistant

Secretary-General, Promotion Department. The

of Development Administration (NIDA) on June 18,

2014 and July 23, 2014 at the Palasso Hotel. The

lecture was attended by lord mayors, TAO chairmens,

department heads, municipality secretaries and

deputy secretaries, TAO secretaries and deputy

secretaries, public health officers.

2.3 Lectureon“RiskManagementwith

Insurance” The lecture described the reason and

need to buy insurance, types of insurance, micro

insurance and insurance for risk management, savings

and investment under the Project on Financial

KnowledgeintheWorkPlaceorganizedbytheOffice

ofSecuritiesandStockExchangeCommissiononJune

27,2014attheNovotelHotel,Bangkok.Thelecture

wasattendedbyHRstaffoftheOfficeofSecurities

andStockExchangeCommission.

Inauguration of “Insurance 200”, or micro insurance at Insurance Zone in “Micro Insurance for the

Public” Fair in the provinces

39

3) Campaigning on Micro Insurance

(Insurance Policy 200) Knowledge Promotion

3.1Anexhibitiontodisseminateinsurance

knowledge and publicize Insurance Policy 200

(Micro Insurance) was held at 7 Innovation Awards

2014 Fair on March 5, 2014 at Panyapiwat Auditorium,

Panyapiwat Institute of Management (PIM). The fair

wasorganizedby(PallPublicCompanyLimitedand

was attended by 600 people from companies with

productson7-Eleven’sshelves,includingthoseaward

winners. The OIC itself sent “Insurance Policy 200”

(or “Insurance 200” for short), in the contest and

won an award for creating an outstanding concrete

producttrulybenefittingsociety

3.2An exhib i t ion to d isseminat

insurance knowledge and publicize Insurance 200

(Micro Insurance) was held at “Happiness Returning

Concert”ontourwhichwasinitiatedbytheNational

Peace Keeping Council (NPKC) and organized by

WeitheeThaiCo.,Ltd.forthreetimesasfollows:

Exhibition to disseminate insurance knowledge and run campaigns on Insurance 200 at “Happiness

Returning to the People” Concert on tour organized by the National Peace Keeping Party

“2014 7 Innovation Awards” Ceremony held on March 5, 2014 at Panyapiwat Institute of Management

Annual Report 2014


1st exhibition on Saturday, July 12,

2014 at Ayudhya Government Complex

2nd exhibition on Saturday, September

6, 2014 at Nakhon Phanom Government Complex

3rd exhibition on Saturday, September

27, 2014 at Central Festival Department Store,

Had Yai, Songkhla

4) Developing New Selling Channels for

Insurance 200. Consultation had been made to

consider additional selling channels for Insurance 200

other than the gift voucher so as to facilitate easier

access by all people.

6) Cooperating with the Bank of Agriculture

and Agricultural Cooperatives (BAAC) and the Depart-

ment of Agricultural Extension in running the project

on “Micro Insurance” by giving knowledge about

Insurance 200 to farmers along with annual rice crop

insurance. Insurance 200 brochures had also been

distributed along with the BAAC’s crop insurance

brochures.

By December 2014 total of 811,054 micro

insurance policies had been sold, consisting of 83,342

for life insurance 609,150 for non-life insurance,

and a total of 118,562 policies sold by 23 insurance

5) Cooperating with various selling channels,

e.g. broker companies which joined the project in

providing the public with wider access to selling

channels, whereas 7-Eleven helped promote Insurance

200 on its bags.

companies which joined the micro insurance project.

This last quarter sale grew 27.38% from the previous

quarter, earning a total premium of 23.7 million baht,

whereas 6.1 million baht had been paid for compen-

sation claims.

41

TypeExamination

(Cases)

License Issuance (Cases)

License Renewal (Cases)

Registration

Universal Life

Unit rink

Life insurance agents 232,195 119,270 87,131 1,508 1,715

Non-life insurance agents 5,000 3,886 5,901 - -

Life insurance brokers 32,450 22,715 30,078 9 749

Non-life insurance brokers 49,832 30,288 31,355 - -

Total 319,477 176,159 154,465 1,517 2,464

6.2 Making OIC Announcement on Criteria

for Insurance Policy Issuance and Selling and Duty

Performance of Life/Non-Life Insurance Agents/

Brokers (No.3) B.E. 2557 Dated March 17, 2014.

The announcement was made in conformity with the

BankofThailand’spolicyonregulationofbrokerage

in selling securities and insurance products through

commercial banks.

The OIC places emphasis on development

of the quality of selling channels so that the general

public can get quality services from insurance

personnel by applying the following measures :

6.1 Regulating and supervising 479,632

individual insurance agents/brokers registered in the

OIC’s database, comprising 275,548 life insurance

agents, 21,357 non-life insurance agents, 85,053

life insurance brokers and 97,674 non-life insurance

brokers.In2014,examinationsforlicenses,license

issuance and renewal, and registration as universal

life insurance agents and unit-link insurance agents

are as follows :

6.DevelopmentofinsuranceChannelsofDistribution

6.3 Protection of the public’s insurance

benefitsandrightsbyregisteringthenamesof life

(non-life) insurance agents/brokers who applied for

licenses and renewal of licenses for selling insurance

on telephone as “universal life” / “unit-link” insurance

sellers, as well as the names of those whose licenses

hadbeenwithdrawnandpostingthemontheOIC’s

website so that the public and related persons can

cheek those agents/brokers status. This is just to

make sure of legal insurance business transactions.

Annual Report 2014


6.4 Development of the linkage system

for sending examination papers from Bangkok to

otherexaminationcenterscountry-widetomaintain

safe, quick, convenient, reliable and transparent

managementofexaminationpapersandexamination

procedure. The system had already been tested and

training of personnel had also been held. The system

hadalreadybeeninstalledatOIC’ssixexamination

centers inOIC regional offices, namelyOICOffice

Region1 (Chiangmai),OICOfficeRegion3 (Nakhon

Sawan),OICOfficeRegion4(Udornthani),OICOffice

Region6(NakhonRatchasima),OICOfficeRegion10

(NakhonPathom)andOICOfficeRegion12(Songkhla).

6.5 Regulation of individual insurance

brokers.Licenseshadbeenissuedto32juristicpersons

to act as brokers and 280 licenses had been renewed.

Inspectionof18insurancebrokersasjuristicpersons,

including commercial banks, to make sure that they

conformedtoLife/Non-LifeInsuranceActB.E.2535

as well as related laws had also been carried out.

6.6 Approval of a total of 45 organizations to

serve as training institutes in the licensing and renewal

of license for life insurance and non-life insurance

agents and brokers. A total of 381,557 persons parti

cipated in the training. Approval had also been given

to seven institutes to organize seminars on insurance

to be counted as part of the training (starting from the

fourth one). A total of 2,590 persons participated.

6.7 Inspection of 45 organizations approved

to serve as training institutes to make sure that they

conformedtotheOIC’sannouncementonthetraining

course and method for the year 2013, and to give

advices concerning formation of a practice guideline

for self-supervision.

6.8 TheOICproudlygainedcertificationof

its quality management system (ISO 9001 : 2008) from

ManagementSystemCertificationInstitute(Thailand

: MASCI) for the system of “issuing life insurance and

non-life insurance licenses for agents/brokers” in late

August2011.ThecertificationexpiredonJune14,

2014 and the OIC, after a new assessment, gained

extensionofthecertificationforanotherthreeyears,

expiringonAugust10,2017.

43

Measure 2 : To Strengthen the Stability and

Competitiveness of the Insurance System

Insurance is the business that offers service

or “insurance contract” which is a “promise”

that itwill giveprotectionof the insuredperson’s

life and properties against future accidents/disasters.

Buildingastrong,stableandefficientinsurancesystem

that can meet future challenges which requires

professional management and supervision to strengthen

the insurance business is the key to developing public

trustandconfidence.Thefollowingstepswerethen

implemented :

1.StressTest

The OIC developed its supervision by using

the so-called “Stress Test” as an important tool for

riskmanagementneededtodeterminethefinancial

stability and flexibility of insurance companies to

meet the risk of losses and, at the same time, to

sustaininternationalstandardoffinancialstabilityof

thecountry’sinsurancebusinessinordertogaina

goodbalancebetweenexpectedrateofreturnsand

acceptable risk level.

For 2014 the OIC implemented its stress

test as follows :

1) Three meetings had been held to

consider the stress test framework for life insurance

businessbyconsultingon formingQIS2 framework

and its parameters to be used by every life insurance

companyforformingQIS2.

2) A stress test framework had been

drafted to be used by life insurance companies as

the manual for conducting their second quantitative

impactstudyofthestresstest(QIS2).

3) All the life insurance companies

wererequiredtoconducttheirQIS2andsubmittheir

report to the OIC.

4) TheQIS2reportswerecompiledand

summarized to be submitted to the OIC meeting.

Annual Report 2014


Regarding non-life insurance stress test,

the following steps had been taken :

1) Three meetings had been held to

consider the stress test framework for non-life

insurance business, Suggestions had been made on

improvementofdefinitionsanddetailsabouthow

tofilloutdatapertainingtogreatdisasterincidents.

2) A meeting of non-life insurance

companies had been held to give them information

and knowledge about the stress test for non-life

insurancebusiness,coveringbackground,objectives,

andbenefitsof the stress test, essential pointsof

the stress test for non-life insurance companies and

stress test reporting form.

3) A manual and reporting form for the

firstquantitativeimpactstudyofthestresstesthad

been produced and presented to every non-life

insurance company.

4)Everynon-lifeinsurancecompanywas

required to start conducting their firstquantitative

impact study of the stress test for non-life insurance

business on July 1, 2014 and to submit their result

on October 31, 2014.

5)Asummaryreportonthefirstquanti-

tative impact study of the stress test was produced.

2. Revision of Announcement on

Risk-Based Capital (RBC)

The OIC proposed revision of the Announce

ment on Risk-Based Capital (RBC) and had been

approved by the Insurance Commission in the 11/2014

meeting on October 31, 2014 and the 13/2014 meeting

on December 26, 2014. The revised aspects are as

follows :

1) Reduction of repetitive criteria for risk

control of insurance company assets.

2)Specificationofassetvaluesobtained

throughviolationoflawsexceptimmovableproperty

with deducted depreciated value to be counted as

one of the components of items deducted from the capital.

3) Revision of the wording for easy and

correct understanding by clarifying the guideline for

considering credit ranking of payable bond for capital

calculation for credit risk based on the same principle

andtransferoftheitem“otherextendedinsurance

debtor”totheextendedinsuranceassetsection.

4) Extension of the valuation period

forcapitalbonds invested insubsidiariesand joint

companies permitted to do life insurance or non-life

insurance business for one more year.

5) Calculation of capital for the risk of

insurance for long-term insurance by taking the

following steps :

45

(1) Each company is required to

maintain its capital for the risk in the amount equal

to the differentiated amount between the net

committed burden according to the long-term

insurance contract after extended insurance at

percentile 95 and 75 calculated by GPV.

(2) Each company is required to

maintain additional capital for the surrender risk

capital charge (SRC) in case the total surrender

amount of all the insured is higher than the total

amount of capital for all risks from every aspect of

normal business running plus insurance reserves

according to the Announcement on Assessment of

Insurance Company Properties and Debts.

3. RevisionoftheFrameworkfortheSupervisionofRisk-BasedCapital Phase2(RBC2)

The OIC kept monitoring the implementa-

tionofthefirstRBCsupervisionframeworkassoon

as it took effect in 2011 to review its suitability in

comparison with the RBC supervision in other related

countries.Thenin2014theOICstarteditsProjecton

Development of Risk-Based Capital Phase 2 (RBC2) for

insurance business in succession to RBC1 which ended

in2013.Themainobjectivesare1)toimproveand

develop criteria for determining capital, parameters,

and how to assess prices of properties and debts

currently being in effect with a view to meeting the

standardspecifiedbyIAIS;and2)todevelopaguideline

for the supervision of capital for those risks which

had not been required to provide capital so far, e.g.

operational risk, group risk and liquidity risk, etc. The

RBCprojectismanagedbyaworkinggroup,consisting

of representatives of life insurance and non-life

insurancecompanies,theLifeInsuranceAssociation

of Thailand, the Non-Life Insurance Association of

Thailand,theInsuranceMathematicians’Association

ofThailand,qualifiedexpertsandOICofficers.Towers

Watson Co.,Ltd. is the project’s consultant giving

advices on the supervision of foreign capital maintaining

as well as technical comments.

The OIC required every life-insurance and

non-life insurance company to run its Market test to

analyze the impact of the parameters for calculating

various risks and to obtain related suggestions to

be used as baseline data for updating the RBC2

supervision framework.

The OIC, in addition, designed its RBC2 Road

Map which is divided into three phases, comprising

Short-Term Plan (2015-2016), Medium-Term Plan

(2017-2019) and Long-Term Plan (2020 onwards).

Implementation of those plans needs close cooperation

between the OIC and the business sector in the

form of a working group so as to develop the RBC2

towardsfittingbestthecurrentsituation.

Annual Report 2014


4. Analysis and Audit Operations

4.1 Analysis and Audit of Insurance

Companies

1) Analysis of financial stability from

the financial andenterprise status reports, reports

on maintenance of capital and adequacy as well as

financialbalanceof87lifeinsurancecompaniesand

non-life insurance companies (data as of December

31,2014).Itwasfoundthat87ofthemhadfinancial

status according to legal standard.

2) On-site assessment of 32 insurance

companies (during January 1 - December 31, 2014)

focusing on corporate risk found that most of them

had quite good or strong level of control system and

risk management, whereas some of them still needed

improvement of their risk management. However, two

ofthem(ThailandHealthCenterPublicCo.,Ltd.and

UnionInterInsurancePublicCo.,Ltd.)themfoundto

have their very weak or critical level of risk management,

so the OIC had their permit revoked.

3) Revision of the framework and

methodofsupervisionfortheOIC’sInspectionSection

toachievemoreefficientassessmentandinspection

ofinsurancecompanies.Theexistingproceduresof

the Inspection Section were compared with those

international standard practices of insurance business

supervision organizations in advanced countries.

Advices and suggestions were then proposed for

improvement along with training of personnel to

achieve active and prompt action in monitoring,

preventing and solving financial problems and

business operations of insurance companies so that

they could meet international practices. The approved

revised supervision framework and method has been

put into practice since February 2014.

4.2 Criteria for Classification of Insurance

Contractsaccordingtothefourthfinancialreporting

standard(IFRS4)andExtendedInsuranceRecording.

SinceIFRS4onthepartofextendedinsurancewill

take effect on January 1, 2016, the OIC appointed

a working group to manage it, comprising represen-

tatives of the OIC, the business sector, Accounting

ProfessionCouncilofThailandandcertifiedauditors.

47

Resource persons specialized in IFRS4 were hired to

givetrainingsandpreparecriteriaforclassificationof

insurance contracts to be used as the practice guideline

for the business sector and audit and analysis staff in

examiningaccuracyofdatarecording.

4.3 A framework for controlling insurance

companies which are prone to causing losses to the

public had been prepared by using Article 52 of

Non-Life InsuranceActB.E.2535 (amendedbythe

secondNon-LifeInsuranceActB.E.2551(LifeInsurance:

Article52).Themainobjectiveistominimizedisputes

oftheuseoftheArticlebyone’sown judgement

by specifying a guideline for giving a notice to the

respective life insurance/non-life insurance company

in two cases, i.e.1) cases of corruption, and 2) cases

ofseriouserror.Lifeinsurancecompanieswithsuch

cases will then be required to correct their status or

performance.

5. Revision of Regulation and Conditions for Investment in Other Businesses

The OIC has made its second Announcement

onInvestmentinOtherBusinessesbyLife/Non-Life

InsuranceCompaniesB.E.2558byadjustingwording

about investment in trust funds for investment in

immovable and accumulated fund for infrastructure

for the sake of clarity and readiness for investment

in payable bonds or loan allowances. Additional

qualifications of the person(s) responsible for

supervisingtherespectivecompany’sinvestmentunit

intermsofforbiddentraitshavealsobeenspecified

in the sameway as those specified for directors,

managers and other persons authorized to act on

behalfoftheircompanyaccordingtoArticle35ofLife

InsuranceActandArtile34ofNon-LifeInsuranceAct

in order to place more emphasis on the importance

of their role towards their company.

6. Preparation of Code of Practice on Structure, Qualifications and Good Practices of Life/Non-Life Insurance Companies’ Directors

The OIC places emphasis on good gover-

nance of insurance companies, so it has continually

promoted their operation with good governance

based on appropriate and efficient performance

and internal audit, a clear guideline for dealing with

stakeholders’ rights, role, duty and responsibility,

cross-checking system, appropriate returns,

minimizationofconflictofinterests,allofwhichare

essentialfactorscontributingtoinsurancecompanies’

stabilityandconfidenceintheinsurancesystem.

Annual Report 2014


The OIC therefore set up a practice guideline

fordealingwiththestructure,qualificationsandgood

practiceofinsurancecompanies’boardofdirectorsso

that each company could concretely and effectively

conform to them. Following are the main points :

1)Specificationofthestructure,qualifications,

forbidden traits, components and duty and

responsibility of the board of directors of life and

non-life insurance companies.

2) Good practice of the board of directors

in the management of their company.

3)Appointment, qualifications and duty

and responsibility of each subcommittee and

independent committee members.

7. InternationalCooperation

7.1Cooperation with foreign countries’

insurance business supervision organizations :

OIC and China Insurance Regulatory Commission

(CIRC) sign an MOU on development of insurance

regulation in Beijing, People’s Republic of China

Exchange of Letters for Cooperation (EoL)

agreement between OIC and Financial Services

Agency (FSA), Japan

❖ Participation in 115 50th Annual

Seminar held during June 22-25, 2014 in London,

U.K., to share knowledge and opinions on insurance

business development, guidelines for development

of various aspects of insurance industry. Resource

persons from different organizations/agencies

aswellasexecutivesfromtheinsurancesectorjoined

the seminar.

❖ A Memorandum of Understanding

(MOU) on promotion of cooperation in the development

of insurance business supervision between the OIC

and China Insurance Regulatory Commission (CIRC)

was signed during the Asian Forum of Insurance

Regulators (AFIR) held during July 17-18, 2014 in

Beijing,People’sRepublicofChina.

49

❖ Participation in the 17th ASEAN

Insurance Regulators’ Meeting (17th AIRM) held

duringNovember24-26,2014inBruneiDarussalamto

share opinions, enhance cooperation with insurance

business supervision organizations from ASEAN

member countries, and prepare for the upcoming

ASEANEconomicCommunity(AEC)in2015.

OIC Secretary-General attends the 17th ASEAN Insurance Regulators’ Meeting (the 17th AIRM) during

November 24-26, 2014 in Brunei Darussalam

OIC hosts “The U.S. Insurance Regulation and Supervision Seminar on Solvency Monitoring and Risk

Governance” during August 4-6, 2014 at the Four Seasons Hotel, Bangkok

❖ An Exchange of Letter (EOL) was

made between the OIC and Financial Services Agency

(FSA) of Japan with a view to initiating cooperation

in various aspects such as personnel development,

exchange of data concerning insurance business

supervision and auditing. A summary of the meeting

with the FSA had been made on July 10, 2014.

Annual Report 2014


7.2 Cooperation with Public Agencies and

International Organizations

❖Co-hostingalongwiththeU.S.National

Association of Insurance Commissioners (NAIC) a

seminar/training on “The U.S. Insurance Regulation

and Supervision Seminar on Solvency Monitoring and

Risk Governance” during August 4-6, 2014 in Bangkok.

ThemainobjectivesweretoprovidetheOICstaff

and those staffs from insurance business supervision

organizations in Asia with an opportunity to learn infor-

mation about U.S. modern insurance business supervision

andexchangeknowledgeandideasforapplication

toappropriatedevelopmentoftheirowncountry’s

insurancebusinesssupervisionformaximumbenefits.

❖ Participation in the meeting with

World Bank staff under the project on “Solvency

Modernization along with Risk Based Capital for the

InsuranceSector”undertheWorldBank’stechnical

assistancewiththeobjectiveofupgradingThailand’s

insurance business supervision, particularly in respect

of risk levels, business auditing and related law and

regulations. The World bank representatives and the

project’s consultants visited Thailand beforehand

to collect data and make inquiry into the current

situation as well as related laws. They also had meetings

with the private sector including both insurance

companies and associations. The study results were

then presented along with the training for auditing

personnel and on-the-job training held during

August 18-29, 2014 and the seminar on “Solvency

Modernization along with Risk Based Capital for the

Insurance Sector” held on December 9, 2014.

❖Co-hostingalongwithASEANInsurance

Training and Research Institute (AITRI) a training/

seminar on “Extended Insurance for Insurance

Business Supervisors” during December 15-19, 2014

in Bangkok, where OIC staff and representatives from

insurancebusinesssupervisionorganizationsinASEAN

and other regions such as Azerbaijan, Uzbekistan,

Bahrain,PapuaNewGuinea,Kenya,Tanzania,thePhilippines,

Malaysia,Cambodia,LaosandVietnamattended.

8.GuidelineforInsuranceBusinessDevelopmenttoCopewithFreeTradeAgree-mentofASEANEconomicCommunity(AEC)

The OIC, the business sector and related

organizations joined hands in conducting a study

on Thailand’s insurance business’s prospect and

its competitiveness in comparison with the other

ASEANmember countries. They consulted on deter-

51

mination of a guideline for developing capability and

competitivenessofthecountry’sinsurancebusiness

togetreadyforAECtradeliberalizationaswellas

readiness of insurance companies to respond to the

needs of every sector by placing emphasis on three

aspects, namely:

1) Preparation of insurance companies

tobesecureand ready forexpansion toembrace

demands for additional insurance products.

2) Creation of a good competition

environment favouring stable growth.

3) Development of infrastructure

favouring sustainable insurance business growth and

expansion.

The guideline/road map for developing

insurancebusinesstocopewithAECtradeliberalization

(AECRoadMap)consistsofreactivemeasures,proactive

measures and supporting strategies as follows :

Type Complaints Resolved Percentage Sum Paid in Resolved Cases

Life 2,327 2,053 88.23 331

Non-life 8,353 7,716 92.37 2,432

Compulsory Motor Vehicle Accident Insurance 662 623 94.11 553

Arbitrator 295 283 95.93 4,105

Total 11,637 10,675 91.73 7,421

1. InsuranceDisputeResolution

Data as of December 31, 2014

❖ Reactive Measures comprise in-

creasing domestic“players’”capacitythroughincreasingminimum capital level, increasing the ratio of foreign shareholders,upgradinginsurancecompanies’goodgovernance and operation standard, and creating competition atmosphere favouring growth through reduction of supervision of premium rates and pension fees as well as issuance of reciprocative insurance business licenses.

❖ Proactive Measures comprise

development of infrastructure necessary for and

favouringinsurancebusinessexpansiontothewhole

ASEANregionalongwithpromotionofthesalesof

insurance products in the region.

❖ Supporting Strategies comprise

development of insurance business supervision frame-

work to meet international standard, enhancement of

supervision capacity, knowledge and specialization of

supervisionorganizations’personnel,insurancedata

linking, enhancement of public understanding of and

access to insurance system

Annual Report 2014


Measure 3 : Development of Insurance Law and Integrated Rights and Benefits Protection System

The OIC has been continuously engaged in

upgrading service quality of both the OIC itself and

the insurance business sector as well as protecting

insurancerightsandbenefitsofthe insured,which

are themain factors directly affecting confidence

in insurance industry and its image, by taking the

following steps :

Type of Insurance

Claimed Cases Claims Paid In Progress

Number of Cases

Amount (Million Baht)

Number of Cases

(%)Amount (Million Baht)

(%)Num-ber of Cases

Amount (Million Baht)

1. Life insurance & PA 213 27 213 100.00 27 100.00 - -

2. Motor vehicle insurance 39,927 4,107 39,927 100.00 4,107 100.00 - -

3. Assets insurance- Fire insurance (residence)- Fire insurance (commercial)

36,389

3,885

3,175

10,812

36,389

3,842

100.00

98.89

3,175

10,361

100.00

95.83

-

43

-

450

4. (IAR) 10,688 392,377 9,960 93.19 381,041 97.11 728 11,336

Total 91,102 410,498 90,331 99.15 398,711 97.13 771 11,786

TheOIC initiated its project on emergency

payment from Motor Vehicle Victims Fund for

emergency cases so that road accident victims can

be admitted for immediate treatment by hospitals

without the need to pay medical bills in order

to make it convenient for them and minimize

disbursementstepsbydevelopingtheE-claimsystem

through which online - real time hospital data will be

automatically linked to insurance companies whereby

2. AssistingFloodsVictims

The great floods in Thailand in late 2011

became the country’s disaster with far-reaching

effectsonalargenumberofhouseholds,SMEsand

large industries. The OIC stepped in to see to it that

thosefloodvictims’insurancerightsandbenefitswere

protected. Following is the summary of all claims

and compensations :

medicalexpenseswillbecompensated.Insurance

companieshavealsobeenurgedtousetheE-claim

systemforpayingmedicalexpensestoroadaccident

victims while having their own IT developed to meet

standard practicewith flexibility and to establish

inter-organizationdatabaselinkageforthepublic’s

bestbenefits.Atotalof1,917hospitals/clinicsand

45 insurance companies country-wide have joined

theprojectsofar.

3. IncreasingEfficiencyoftheE-claimSystem

Data as of January 15, 2015

53

4. Increasing Protection Expenses forRoad Accident Victims according toMotorVehicleVictimsProtectionActB.E.2535

The OIC, in its realization of the need to

increasemedicalexpensesforinitialclaimsunderthe

Compulsory Motor Vehicle Insurance to suit the current

economic situation and highermedical expenses,

submitted its proposal to the Ministry of Finance to

increase the initial pay from 150,000 baht/person to

30,000baht/personbutnotexceeding65,000baht/

person for the total claims for loss of life/permanent

disability/loss of organ(s) (35,000 baht/person) without

additional charge for premium. The proposal was

approved by the Cabinet on December 23, 2014 and

took effect on December 25, 2014. The increased

coverageamountwillbenefitroadaccidentvictims,

especially those who have not bought an insurance

policy or those who become victims of hit-and-run

accidents. Road accident victims will receive their

initial compensation amount from Road Accident

Victims Compensation Fund.

5. Research on the Framework andSuggestionsforPolicyonInsuranceSystemDevelopmentunderMotorVehicleVictimsProtectionActB.E.2535

With the dynamic socio-economic and

technologicalenvironmentsandtheadventofASEAN

EconomicCommunity(AEC)inlate2015whichwill

leadtofreeflowsofmanpower,goodsandinternational

transportation, the OIC, being in charge of Motor Vehicle

VictimsProtectionActB.E.2535,hadconductedits

research on the guideline for developing road accident

victims protection insurance system to be used for

long-term planning and implementing measures to

cope with long-term changes. It was found that the

currentActstillhasmajorproblemsasfollows:

(1) The problem about the protection principle

that does not intend to protect third person(s) only.

(2) The problem of coverage amount of

moneywhichisnotdividedbetweenmedicalexpenses

and compensation for loss of life/permanent disability.

(3) The problem of premium which is a

fixedrateandsodoesnotreflectactualrisks.

Annual Report 2014


(4) The problem of the structure of com-

pulsory motor vehicle insurance industry resulting

frompremiumfixing that requires cross-subsidyof

premium from insurance of other types of motor vehicle.

(5) The problem of the Compensation

Fund which specifies compensation formedical

expenses and loss of life/disability covering initial

damageonly,andthelackofoperationalfluency.

(6) The problem of the lack of standard

practice in payingmedical expenses to accident

victims, particularly papers required in application and

pending period for receiving compensation.

The OIC, therefore, proposed a guideline

for developing compulsory motor vehicle insurance

system into short-term development and long-term

development,e.g.adjustmentofcoverageamount

formedicalexpensesandlossoflife/disability,fixing

premiumsasmaximumandminimumceilings,etc.

Measure 4 : Development of Insurance Infrastructure

As insurance infrastructure is deemed as a key

mechanism in developing the insurance business, it

is necessary to promote human resource development,

IT development as well as insurance business

supervision organization development. The operations

that have been implemented are as follows :

1. InsuranceLawDevelopment

❖The Law Research Foundation of

the Council of State to conduct the parent law

revision based on collected ideas and suggestions/

recommendationsonthedraftParentLawonInsurance.

The revision focuses on criteria for the supervision of

insurance companies, brokers/agents, penalty and

temporary provisions to be best suited to the dynamic

socio-economic circumstances and meet international

insurance supervision standard by comparing with

related foreign and domestic laws, including the

law on financial institution business and the law

on securities and securities market supervision. The

rationale for the revision had already been presented

tointernalunitsviatheCommitteeonAuditandLegal

Cases.ThedraftisnowundertheOIC’sconsideration

before proposing it to the Insurance Commission and

the Ministry of Finance for consideration, respectively.

❖DraftLifeinsuranceAct(No.….)B.E.….

AndDraftNon-LifeInsuranceAct(No.….)B.E.….had

been urged with particular reference to shareholders

of life/non-life insurance companies. The revision

will affect the structure of shareholders and directors

of the insurance companies that responds to the

samecriteriaasenforcedunderthelawonfinancial

institution business, andwill thus fit the current

55

economicsituation,leadingtoinsurancecompanies’

financial strength and insurance business’s greater

stability. Payment for compensation from Life

InsuranceFundandNon-LifeInsuranceFundwillalso

benefitinsuredpeopleaswellasinsurancebusiness

entrepreneurs. Insured people will receive initial

sum of money more quickly in case any insurance

company’slicenseisrevoked.Bothdraftshavebeen

consideredandapprovedbytheNationalLegislative

Council on December 2, 2014, and have been

proposed to be signed by H.M. the King before being

announced in the Royal Gazette.

2. CreatingInsuranceBureauSystem

The Insurance Bureau System has been

designed as the insurance information center to help

regulate, support and promote the insurance business

in its operations, its market conduct, management of

claimsandbenefits,assessmentofinsurancereserve,

risk management and establishment of premium rates

according to risk factors to cope with the easing of

premium rate regulation in the future. In addition, the

system is able to help bring about better operational

stabilityandefficiencythatcreatestrustamongthe

public as well as related industrial sectors both within

the country and abroad. There have lately been

consultationsbetweentheOIC,TIDCo.,Ltd.andother

relatedorganizations/agenciestoimprovetheexisting

non-life insurance information structure to achieve

higherefficiencyandbetterreportingsystem.

3. OICCorporateGoodGovernance

3.1 Under the Guideline for OIC Good

Governance, approved by the OIC Meeting on April

19, 2013, the OIC urges putting good governance into

practice on a sustainable basis both at the commission

levelandtheoffice-levelwithaviewtosettingagood

exampletothosebeingundertheOIC’ssupervision

as well as showing its strong will and determination

to create good governance in the insurance business.

The OIC issued criteria and code of practice, consisting of :

3.1.1 Criteria and code of practice for

the commission on the following four matters :

(1) Good governance in perfor-

manceaccordingtotheInsuranceCommissionLaw.

(2) Commission meeting procedure.

(3) Reporting form for individual

Insurance Commissionmembers’management of

conflictofinterests.

(4) Commission performance

assessment criteria.

Annual Report 2014


3.1.2 Criteria and code of practice for the

OICOfficeonthefollowingtwomatters:

(1) Compliance with OIC Regulations

onOIC Confidential Information Security Keeping

B.E.2557.

(2) Compliance with OIC Regulations

onPersonnelCodeofPracticeandEthicsB.E.2557.

3.2 Development of OIC Risk Management

throughBusinessImpactAnalysis(BIA)Projectwhich

analyzed impacts of political, socio-economic and

naturaldisasterfactorswhichmightaffecttheOIC’s

operation and public services, and then prioritized its

work processes to be used as the baseline data for

developing its Business Continuity Plan (BCP).

4.Registrar’sAnnouncementon the

Training Course for Staff Responsible for

Life/Non-LifeInsuranceCompaniesInvestment

Units

The OIC arranged a training course for

life/non-lifeinsurancecompanies’staffresponsible

for their investment units to make sure that they

sufficientknowledgeandskillneededforappropriate

management of and decision making on investment

suiting the nature of insurance business and its

committed burdens as well as related laws and

criteria.Theregistrar’sannouncementonthetraining

course has been announced and coordination with

insurance institutions has been made to implement

the training course.

5.The3rdInsuranceDevelopmentPlan

The OIC has conducted its assessment

of performance output of the 2nd Insurance

DevelopmentPlanterminatingin2014.Environmental

and other factors which might affect the insurance

system have also been assessed to be used as the

baselinedatafordesigningthedirectionofthenext

development plan.

1) AssessmentofEnvironmentalFactors

The insurance business tends to grow

alongwiththecountry’seconomicgrowthdirection

whereas there are other urging factors such as income

increases, higher education of the population, higher

frequency and intensity of disasters and the aging

society which make the Thai people aware of the

importanceoffinancialplanningandriskmanagement

57

by themselves. In addition, the insurance business

hasgoodprospectsofexpansiontotheotherASEAN

member countries as a result of their grouping into

ASEAN Economic Community (AEC)where all the

member countries are more closely linked to each

other economically and financially. Nevertheless,

fiercecompetitionmayalsocomealongwithsuch

expansion.

2) Current Insurance Business and Insurance

Industry Structure

2.1 The insurance business market,

both life insurance and non-life insurance, has been

dominated by some large companies (oligopoly).

Top five out of 23 life insurance companies take

70.20% of the total market share, and top ten out

of 58 non-life insurance companies take 62.93% of

the total market share, whereas 48 small companies

take the remaining 37.07%. These small companies

have been restrained by limited capital, knowledge,

expertiseandinsurancetechnology,whicharecrucial

factors for overall insurance business development.

2.2 Insurance has so far not reached all

levels of the people. Insurance policy holders are

mostlythoselivinginurbanareasandmajorprovinces.

The 2013 data showed that Bangkok inhabitants held

the highest number of policies (43.75%), followed

by those in the Central region and the Northeast

(21.33% and 14.61%), respectively. The most

popular insurance products were the traditional ones.

More specifically, themost popular life insurance

products were the ordinary types, taking 84.17% of the

market share, whereas investment-linked life

insurance products were still unpopular.

3) Guidelines for Insurance Business

Development :

- Improvement of insurance industry

structure and upgrading insurance business operational

standard formoreefficientperformanceandgood

governance of the insurance business.

-Increasing efficiency and enhancing

competition environment for the insurance business

by minimizing costs, developing insurance products

favouring free competition and promoting connection

oftheinsurancemarketoverthewholeASEANregion.

- Promoting knowledge and under-

standing about insurance among the public and

develop and reinforce insurance personnel.

Annual Report 2014


6. HumanResourceDevelopment

❖ The OIC continued development of

itspersonnel’scompetencyandpotential through

training courses, organized both by the OIC and by

other organizations, on risk management and internal

control,AdministrativeCourt’slegalcaseconsideration

procedure,financeandinvestment,auditors’school,

non-life insurance assessment, human resource

management, teamwork development, etc. The OIC

expects its personnel to possess knowledge and

functional competency to perform their duties

efficiently.Italsodevelopeditspersonnelthrough

othermeans,by,forexample,sendingthemtowork

attheBankofThailandforsixmonths,Englishskill

development through e-learning, etc.

❖ In 2014 the OIC granted two master-

degree scholarships to its personnel with good academic

background and work performance to study in the

fieldofActuarialScienceatHeriotWattUniversityin

the United Kingdom and at Columbia University in the

U.S.A. to further develop its personnel with insurance

mathematics career to add quality personnel to the

insurance market.

❖Adjustingwork performance assessment

totrulyreflectOICpersonnel’sperformanceresults

and capacity by assessing their contribution to OIC

key performance indicators (KPI), section KPIs and

individual KPIs. The OIC personnel had been informed

andexplainedaboutthenewformofperformance

assessmentexpectedtobeusedinFY2015.

❖CreatingtheOIC’scorevalue:“Devoting,

Thinking Far Beyond, Cooperating and Developing”

to be used as the guideline for practice and for

driving the corporate performance towards com-

success. Core value campaigning activities have been

continuously organized to instil the core value into

the minds of the personnel and encourage them to

showtheiractionsreflectingit.

7.7.DevelopmentofInsuranceKnowledge

7.1 The OIC has developed several insurance

training courses for OIC personnel and those in the

insurance business to enhance their knowledge and

skill about insurance, finance and investment, risk

managementaswellasotherrelatedsubjectssoasto

strengthen the infrastructure of the insurance system

59

according to the Second Insurance Development Plan

as follows :

❖ Insurance Supervisory Curriculum. The

institute has developed an insurance supervisory

curriculum for OIC staff of operational level and

withanaimtodevelopexpertiseandknowledgein

insurance and insurance business, risks, laws related to

insurancebusiness,financialpolicyandthecountry’s

economic system. The curriculum is divided into 4

levels : the operation level (2 courses, 107 persons),

theexecutivelevelandtheintermediateexecutive

level(374persons),andthehigherexecutive/policy

level (62 persons).

❖CoursesforNon-OICPersonnelconsistof

Advanced Insurance Technics (AIT) which welcomes

only higher executive level personnel of financial

institutions, public and private organizations and other

related organizations (87 persons), a training programs

for license renewals of insurance agents/brokers for

the third and fourth sessions (7,170 persons), and a

training program in selling unit-linked life insurance

policies (3,312 persons).

7.2 The OIC, with the cooperation of the

ThaiLifeAssuranceAssociationandtheThaiGeneral

Insurance Association, has developed a handbook of

insurance knowledge by revising the content to meet

the learning structure and objectives. Sukhothai

Thammathirat Open University has been contracted

to develop a handbook of practice for life insurance

agents/brokers.

7.3 Thailand Insurance Symposium 2014

washeldonNovember20,2014attheSwissotelle

Concorde. Mr.Visut Srisuphan, Minister of Finance,

presided over the opening ceremony and conferred

certificates to academicworks awardwinners and

also conferred plaques to their advisors. Thirteen

academic works had been submitted in 2014, 10 of

which were master-degree works and three were

doctoral-degree works.

OIC hosts “Thailand Insurance Symposium 2014 on November 20, 2014 at the Swissotel le Concorde Hotel

Annual Report 2014


SECTOR

5

61

Direction and Trend of Insurance Business in 2015

Annual Report 2014


Direction and Trend of Insurance Business in 2015

63

The insurance business in 2014 could make its

expansion of 9.23%, lower than that of 2013 (13.04%).

Of this, life assurance grew 13.00% as a result of the

expansion of general life assurance (15.56%) together

with other supporting factors, e.g. tax benefits, etc.

In the meantime, non-life insurance grew only 1.05%,

probably partly due to the recovery to normal

condition from the great floods in 2011, leading to the

people’s decreasing demand for non-life insurance

Life2007

201,942 221,598 258,533 296,213 328,897 390,517 441,372 498,752 563,70091,002 101,899 107,814 122,756 138,755 179,530 203,121 205,247 223,700

292,945 323,497 366,346 418,969 467,652 570,047 644,492 704,000 787,400

2008 2009 2010 2011 2012 2013 2014

9%1.05%13.08%29.31%

18.74%13.02%

13.00%13%

12%9.23%

13.04%21.87%

11.62%14.36%

13.25%10.43%14.04%

16.25% 9.73%

11.97%9.40%100,000

-

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

16.67%

5.80%

14.57%11.03%

13.03%13.86%

2015

TotalNon-life

Millon baht Growth rate of insurance business for 2007-2013 and the trend for 2015

plus the fact that non-life insurance mainly depends

on consumers’ confidence and the country’s GDP.The

National Economic and Social Development Board

expects the country’s economic growth in 2015 to be

3.5-4.5%, so the OIC estimates that direct premiums

in 2015 will grow 12%, making a total of 787,400

million baht worth of direct premiums. Of this, life

assurance will grow 13% worth 563,700 million baht

and non-life insurance 9% worth 223,700 million baht.

Annual Report 2014


SECTOR

6

65

Appendix

Annual Report 2014


6.1) Audit Committee’s Report

The Audit Committee consists of 4 board members appointed as qualified experts by the Office of Insurance Commission and independent members with Mrs.Tarisa Watanagase as Chairman of the Audit Committee, Mr.Prasan Chuapanich, Mr.Paiboon Siripanusathien and Mrs.Wanee Tassanamontien as Committee Auditors and Mr.Kiattisak Khamsamarn, Senior Director of Internal Inspection, as Secretary of the Audit Committee.

In 2014 the audit committee membership had been changed due to termination of the qualified experts in the Insurance Commission whereas the new qualified experts were appointed on September 2, 2014. The four new experts were then appointed as audit committee members at the OIC Meeting, being effective on October 31, 2014.

The audit committee was granted with the task of the overall inspection in compliance with regulations of the OIC on roles, responsibilities and code of ethics. In 2014 the audit committee held a total of 4 meetings (one of which being attended by the new audit committee) attended by the internal audit department, the general administration department, secretary of the committee assigned to conduct an assessment of internal control and risk management and the Human Resource Department. The auditors were at liberty to perform their duties

with the full cooperation of all divisions of the OIC. The work operations and inspection can be summarized as follows :

1. Review the effectiveness of internal operations concerning 2014 quarterly and yearly

financial reports and found that they are formulated with transparency, suitability, accuracy

and reliability, with sufficient information disclosure.

2. Seek effective means for good corporate governance of the OIC in order to build reliability, trust and reputation based on the continual growth of the Office of the Insurance Commission.

67

3. Examine the risk management, internal control systems and internal audit operations by engaging in regular meetings with internal auditors and the secretary to review its progress and development on a quarterly basis. The State Audit Commission considers that the OIC has a risk management scheme and an internal control system that is adequate and can be trusted to reach its objectives in maintaining an effective and efficient operation system conforming to rules, regulations, conditions and policy of the OIC. However, the executive board should lay emphasis on HR management to be best suited to corporate operation for more efficiency.

4. Supervise internal audit to ensure efficiency and effectiveness for the maximum benefit of the organization and being in accordance with international standard. The audit committee is to consider the objectivity of internal auditors, their work operations, audit reporting for 2014 audit revisions of important issues, as well as offer recommendations in the improvement of an effective organization. Consideration should be made for the approval of internal audit and budget for 2015 (based on internal control assessment covering important corporate work systems), number of personnel as well as human resource development to ensure suitability and appropriateness.

In sum, the Audit Committee has performed its duty in completion and is of the opinion that the OIC upholds a sound and effective work operations to achieve corporate targets and gives importance to operation under effective supervision together with risk management and appropriate internal control. Financial statement are clear, accurate, disclosing appropriate information according to generally accepted accounting principles. It also places emphasis on HRD to further strengthen corporate work performance.

(Mrs.Tarisa Watanagase)Chairman of the Audit Committee

March 31, 2015

Annual Report 2014


Notes 2014 2013

Assets

Current assets

Cash and cash equivalent 4.1 551,298,164.88 423,770,811.73

Short-term investments 4.2 2,277,364,864.94 1,886,933,871.55

Receivables 4.3 367,677,471.57 339,716,020.64

Other receivables 4.4 3,315,229.35 7,366,831.85

Prepaidexpenses 4.5 9,421,464.47 4,640,503.01

Other current assets 4.6 12,121,669.42 22,760,174.26

Total current assets 3,221,198,864.63 2,685,188,213.04

Non-currentassets

Long-terminvestments 4.7 594,407,002.90 402,263,000.00

Property, premise & equipment-net 4.8 306,589,039.55 295,033,396.85

Intangible assets-net 4.9 25,026,565.93 17,478,047.98

Other non-current assets 246,460.00 246,460.00

Total non-current assets 926,269,068.38 715,020,904.83

Liabilitiesandequity 4,147,467,933.01 3,400,209,117.87

Currentliabilities

Payables

Accruedexpenses 4.10 14,634,333.96 8,388,273.21

Other current liabilities 4.11 26,576,761.12 28,218,595.64

Total current liabilities 4.12 19,682,045.38 17,460,098.05

Non-currentliabilities 60,893,140.46 54,066,966.90

Unit : Baht

Financial Statement Office of The Insurance CommissionBalance SheetAs of December 31, 2014

69

หมายเหตุ 2557 2556

Income from property donation 4.13 3,931,541.02 3,626,733.28

Reserve for medical costs of retired staff 4.13 32,510,668.25 23,630,837.42

Service Capital compensation 4.13 326,546,223.04 252,654,832.15

Total non-current liabilities 362,988,432.31 279,912,402.85

Total liabilities 423,881,572.77 333,979,369.75

Equity

Capitals transferred from the Department

of Insurance

4.14 120,538,099.76 120,538,099.76

Initial capitals from the government 4.15 100,000,000.00 100,000,000.00

Retained earnings 3,503,048,260.48 2,845,691,648.36

Total equity 3,723,586,360.24 3,066,229,748.12

Totalliabilitiesandequity 4,147,467,933.01 3,400,209,117.87

Unit : Baht

Note:Financialstatementsarepartofthesefinancialstatements

(Mr.Pravej Ongartsitthigul)Secretary-General

(Mr.Chuchat Pramoolpool)Assistant of the Secretary-General

Financial Statement Office of The Insurance CommissionBalance SheetAs of December 31, 2014

Annual Report 2014



Notes 2014 2013

Income

Contributions from insurers 3.1.1 , 4.16 1,423,271,528.46 1,304,862,656.99

Fee income from insurers 3.1.2 , 4.17 207,759,600.00 188,706,700.00

Interest income 82,951,056.52 69,528,148.88

Other income 5,807,125.45 5,197,944.41

Total Income 1,719,789,310.43 1,568,295,450.28

Expenses

Personalexpenses 4.18 751,940,185.61 728,453,982.88

Operatingexpenses 4.19 300,545,512.70 249,147,668.21

Remunerations of the committees and subcommittees 4.20 9,947,000.00 10,791,612.89

Totalexpenses 1,062,432,698.31 988,393,263.98

Gains for the year 4.21 657,356,612.12 579,902,186.30

Other comprehensive income for the year - -

Totalcomprehensiveincomefortheyear 657,356,612.12 579,902,186.30

Unit : Baht

Office of The Insurance CommissionIncome StatementFor the year ending December 31, 2014

71

Unit : Baht


Capitaltransferred

fromtheDeptofinsurance

InitialCapitalfromthe

governmentRetained

EarningTotalEguily

Outstanding as of Dec. 31, 2012 120,538,099.76 100,000,000.00 2,265,789,462.06 2,486,327,561.82

Netincomefor2013 - - 579,902,186.30 579,902,186.30


Netincomefor2014 - - 657,356,612.12 657,356,612.12


Office of The Insurance CommissionStatement of Changes in EquityFor the year ending December 31, 2014

Annual Report 2014


2014 2013

Adjustment to reconcilenetprofit tocashprovidedbyworkoperations

Netprofit 657,356,612.12 579,902,186.30

Depreciation and amortization

Expensesfromadjusteddecreaseofequipmentuse 58,708,507.54 58,957,674.23

Sale of donated equipment 16,266.57 -

Income from donated Items (921,927.26) (578,152.72)

Income from interest (82,951,056.52) (69,528,148.88)

Cash from interest 93,690,234.63 57,720,368.73

Profitfromworkoperationspriortoadjustment

in current capital

725,898,637.08 626,473,927.66

Increase or decrease in operating assets and liabilities

Receivables (increase) (27,961,450.93) (13,791,130.51)

Other receivables decrease (increase) 4,051,602.50 6,323,701.33

Prepaidexpense(decrease) (4,780,961.46) 1,254,280.99

Other current assets (increase) decrease (100,673.27) (108,718.42)

Other non-current assets (increase) - (89,200.00)

Increase in payables (decrease) 6,246,060.75 731,633.15

Increaseinaccruedexpenses(decrease) (1,641,834.52) 10,324,598.71

Unit : Baht

Office of The Insurance CommissionStatement of Cash FlowsFor the year ending December 31, 2014

73

2014 2013

Increase in prepaid contribution from insurance

companies (decrease) (157,500.00) (114,000.00)

Increase in arbitral tribunal payment (1,122,551.00) 1,425,924.00

Decrease in performance bond (increase) 3,789,730.30 (427,154.50)

Increase in cash received in advance (decrease) (287,731.97) (317,084.97)

Increase in reserve for medical costs of terminated staff 8,879,830.83 8,394,385.98

Increase in renumeration according to accrued service costs 73,891,390.89 71,215,621.69

NetCashinworkoperations 786,704,549.20 701,606,356.34

Cashfrominvestmentactivities

Cashoutflowfromshort-terminvestment (390,430,993.39) (383,876,001.47)

Cashinflowfromlong-terminvestment(net) (192,144,002.90) (233,836,000.00)

Cashoutflowfrombuildingrenovation (58,988,529.92) (6,400,515.07)

Cashoutflowfrompurchasingintangibleassets (17,613,669.84) (710,000.00)

Netcashfrominvestmentactivities (659,177,196.05) (624,822,516.54)

Netaccruedcashandcashequivalent 127,527,353.15 76,783,839.80

Cashandcashequivalentatbeginningofperiod 423,770,811.73 336,662,373.22

Cashandcashequivalentatendofperiod 551,298,164.88 413,446,213.02

Unit : Baht


Office of The Insurance CommissionStatement of Cash FlowsFor the year ending December 31, 2014

Annual Report 2014


Office of The Insurance CommissionNotes to Financial StatementsFor the year ended 31 December 2014

1. General Information

By virtue of the Insurance Commission Act, the Office of Insurance Commission (OIC) has established

on September 1, 2007 by changing its status from the Department of Insurance, Ministry of Commerce.

The OIC is a state agency which is not a government agency or state enterprise and is under the supervision

of the Ministry of Finance. Its roles and responsibility is to oversee and regulate the insurance business to

be in accordance with the insurance and customer protection principles.

Office of Insurance Commission 22/79 Radchadaphisek Rd., Chankasem, Chatuchak, Bangkok 10900

Thailand.

2. Basic Preparation of Financial Statements

2.1 These financial statements have been prepared in accordance with generally accepted accounting

principles and in accordance with the accounting system specified by the Ministry of Finance whereby the

accrual basis accounting shall be used.

2.2 Accounting period shall be the same as the calendar year, starting January 1 and ending December

31 of each year.

2.3 Accounting standards

The OIC has not exercised the Accounting Standards 19 on employee benefits effective January

1, 2011 since according to the Insurance Commission Act B.E. 2550, Article 19. “The OIC is not under the

jurisdiction of the Labor Protection law, the Labor Relations law, the Social Security law, and the Compen-

sations law. However, OIC staff and employees are to receive benefits no less than stipulated in the Labor

Protection Law, the Social Security Law and the Compensations Law.

3. Significant Accounting Policies

The following are significant accounting policies used in the preparation of the OIC financial statements.

3.1 Recognition of revenues

3.1.1 Contributions from non-life and life insurance companies are recognized as revenues

based on their contribution rate specified under the Notification of the Insurance Commission Re: Criteria,

Procedures, and the Contribution rate to sent by life and non-life insurance companies to the OIC, effecting

January 22, 2008.

3.1.2 Fee incomes are recognized as revenues once OIC receives fee payment.

3.1.3 Income from the annual government budget are recognized as revenues after the money

has been transferred from the Comptrollers General’s Department to the OIC account.

3.1.4 Interest incomes are recognized as interest accrues based on the effective rate method.

75

3.2 Expense recognition

The expenses are recognized on accrual basis.

3.3 Land, buildings and equipment

Land are based on capital cost. Buildings and equipment are based on capital cost on the

purchase date or acquisition date deducted by the accumulated depreciation.

Buildings and equipment are recorded as assets with a service life of over 1 year and their

depreciation is calculated on a straight line basis over their estimated length of service time:

Buildings 20 years

Equipment 5 years

Vehicles and accessories 5 years

The adjustment of a leased building is recorded as an asset and the depreciation is calculated

on a straight line basis over the period specified in the lease contract.

Equipment transferred from the Department of Insurance are stated as net on the transferred

date after deducting the depreciating cost calculated according to above-mentioned guidelines Expenses for

expansion, renewal or improvement of assets, contributing to a substantial.

Increase in current replacement costs, will be included as capital cost of assets. Repair and

maintenance costs are recognized as expenses for a given accounting period.

3.4 Intangible assets

Intangible assets including direct expenses on the development of computer software

programs as well as expenses used in the purchase of packaged computer software programs under the

supervision of the OIC that will yield economic benefits for over a year, are stated at cost less amortization.

The amortization is calculated on a straight line basis to reduce the price on the accounting books of each

asset over the estimated service life of the given assets. The leaseholds are stated at cost after deducting

the accumulated amortization. The amortization is calculated on a straight line basis over the period of the

leasehold as follows:

Computer software 5 years

Leasehold of buildings as per actual period but not exceeding 10 years

3.5 Materials under 5,000 baht per unit on the purchase date can be considered as expenses for

the entire amount under the accounting period.


Annual Report 2014



3.6 Estimated liabilities

The OIC will document the estimation of liabilities when such liabilities were developed as a

result of a past incident when there is the possibility that the office will lose some economic resources to

resolve such liabilities, and when the value of such liabilities can be accurately estimated.

3.7 Non-Current liabilities

3.7.1 Donated Properties

The OIC registered donated properties as assets and liabilities under income account

pending recognition, which will then eventually be recognized as donated revenues based actual value at

each accounting period.

3.7.2 Reserve for medical costs of retired employees

According to the OIC regulation on medical costs of retired employees B.E. 2553, the

OIC is required to set aside reserve for medical costs of its retired employees, whereas each employee is to

have 0.6% of his or her salary deducted monthly to be pooled as the fund and the OIC is to allocate 0.4%

of its annual income prior to expense deduction to be topped up to the fund at the end of budgetary year

after the Office of State Comptroller’s audit.

3.7.3 Renumeration according to service costs in the past

The commitment of the OIC on the project on renumeration according to service costs in

the past is under processing so as to meet the right practice. The estimated liabilities has thus been recognized in

accordance with OIC’s Regulation on Renumeration according to Service Costs in the Past B.E. 2554.

3.8 Life Support Fund

Each employee who is the fund’s member is required to pay an amound of his income to the

fund whereas the OIC is to add an amount of money to the fund according to the fund’s regulation which

is operated by K.Master Pool Fund already registered. The amount of money added up to the fund by the

OIC is to be recognized as expenses in the financial balance.

77

4. Additional information

4.1Cashandcashequivalentcomprises:

4.2Short-termInvestmentconsistsof:

Fixed deposits in the bank (5month term but not exceeding 12) 2,277,364,864.94 baht and

1,886,933,871.55 baht, respectively.

4.3 Receivables

Receivables consist of the non-life insurance and life insurance companies that need to send levies

totheOICundertheInsuranceCommissiondeclarations:Criteria,Procedures,andtheLevyRatetobesent

bythenon-lifeandlifeinsurancecompaniestotheOfficeoftheInsuranceCommission2008.Thiscanbe

summarized as follows:

2014 2013

Cash 1,600.00 5,790.00

Deposits - current account 196,600.00 213,600.00

- saving account 348,287,958.29 358,185,316.82

- 3month fixed account 202,812,006.59 65,366,104.91

Total 551,298,164.88 423,770,811.73

Unit : Baht

2014 2013

Receivables - non-life insurance companies 129,552,522.43 123,555,282.12

Receivables - life insurance companies 238,124,949.14 216,160,738.52

Total 367,677,471.57 339,716,020.64

Unit : Baht

Annual Report 2014


2014 2013

Receivables - petty cash 2,490,950.00 1,013,740.00

Receivables - fine payment for violating the OIC Act 35,617.50 35,617.50

Receivables (loans) - Flood relief project 713,000.00 6,290,196.00

Other receivables 75,661.85 27,278.35

Total 3,315,229.35 7,366,831.85

Unit : Baht

2014 2013

Prepaid expenses - lease of assets 7,847,935.42 3,572,322.53

Prepaid expenses - premium cost 1,573,529.05 1,057,480.48

Prepaid expenses - other - 10,700.00

Total 9,421,464.47 4,640,503.01

Unit : Baht

4.4Otherreceivablescomprisedthefollowing:

As of December 31, 2014 a total of 713,000 baht worth of receivables as loans under Flood Victims

Assistance Project, granted to OIC staff according to the 11/2011 OIC Meeting resolution on November 4,

2011 with a maximum of 200,000 baht for each case and interest-free. Each grantee must have guarantor(s)

and must pay back within three years. Eligible staff members must meet specified qualifications.

4.5Prepaidexpenses

79

4.7 Long-term investments

As of December 2014 and 2013, the balance of the 1 year fixed deposit in the bank amounted to

594,407,002.90 and 402,263,000.00 baht, respectively.

2014 2015

Computer equipment 473,374.54 382,966.91

Accrued rental income receivable 10,265.64 -

Accrued bank interest receivable 11,638,029.24 22,377,207.35

Total 12,121,669.42 22,760,174.26

Unit : Baht

4.6 Other current assets comprised the following:

Annual Report 2014


Uni

t : B

aht

4.8

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d, b

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and

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Annual Report 2014


4.9

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83

4.10 Payables

4.11 Accrued expenses

4.12 Other current liabilities

2014 2013

Payables-Life insurance fund deferred fine payments 920,125.00 -

Payables 326,753.52 810,976.56

Payables - Levy from life insurance companies 3,527,296.41 2,565,695.40

Payables - Levy from non-life insurance companies 9,860,159.03 5,011,601.25

Total 14,634,333.96 8,388,273.21

2014 2013

Contract Payment 12,362,481.96 16,546,948.47

Utility expenses 1,616,336.49 1,277,015.53

Deferred withholding tax to Revenue Department 3,349,661.34 3,513,830.15

Operating Expenses 9,248,281.33 6,880,801.49

Total 26,576,761.12 28,218,595.64

2014 2013

Prepaid levy from insurance companies 110,500.00 268,000.00

Arbitral tribunal payment 7,094,346.09 8,216,897.09

Performance bond 12,414,694.29 8,624,963.99

Other prepaid payment received 62,505.00 350,236.97

Total 19,682,045.38 17,460,098.05

Unit : Baht

Unit : Baht

Unit : Baht

Annual Report 2014


4.13 Non-current liabilities

The OIC has changed its recording of donated property from original recording as assets and expenses

as a whole sum to recording as assets and liabilities under its income account to be recognized from property

donation. The said income is to be one by one recognized as income from donation according to the

proportion of depreciation of the donated property during each account period.

As to reserve for medical costs of retired employees, the OIC’s 9th/2010 Meeting on August 31, 2010

gave its approval for the Office to set aside its reserve for medical costs of retired employees who joined

the project by allocating 0.4% of its annual income prior to expense deduction at the end of budgetary year

after the Office of State Comptroller’s audit, whereas each member employee is to have 0.6% of his or her

salary deducted monthly to be added up to the reserve fund.

The OIC’s 10th/2010 Meeting on September 13, 2010 and 11th/2010 Meeting on October 2, 2010

approved, in principle, of provision of renumeration according to service costs in the past as additional

reward to those employees transferred from the Department of Insurance and the Ministry of Commerce in

the amount of 679.05 million baht (to be provided 10%/year). The renumeration has been recognized as

personnel expenditure along with the accrued renumeration according to service costs in the past. Such

an expenditure has uncertainty of payment as indicated by the Office of the Auditor General of Thailand in

the budgetary year of 2011 according to the auditor’s report dated April 11, 2012. A total amount of 23.37

million baht has been paid so far.

2014 2013

Income from property donation 3,931,541.02 3,626,733.28

Reserve for medical costs of terminated staff 32,510,668.25 23,630,837.42

Remuneration of service costs in the past 326,546,223.04 252,654,832.15

Total 362,988,432.31 279,912,402.85

Unit : Baht

85

The renumeration according to service costs in the past is to be paid to OIC employees upon their

retirement according to the OIC’s Regulation on Renumeration according to Service Costs in the Past B.E. 2554

(announced on December 28, 2011) effective as of December 28, 2011. Those employees who retired on

December 31, 2011 and had their right to receive the renumeration sued a lawsuit against the OIC demanding

a total amount of 2.26 million baht (to be paid in two separate sums) together with legal interests. The

lawsuit was submitted to Chiangmai Administrative Court (Case No. 204/2556) on August 5, 2013. The lawsuit

is now under the court’s consideration.

4.14 Capital transferred from the Department of Insurance

The OIC has changed its recording of donated property from original recording as assets and expenses

as a whole sum to recording as assets and liabilities under its income account to be recognized from property

donation. The said income is to be one by recognized as income from donation according to the proportion

of depreciation of the donated property during each account period.

4.15 Initial capital from the government

In 2008 the government allocated to the OIC the amount of 100,000,000 baht as initial capital.

Unit : Baht

Accumulated sum 252,654,832.15

Plus Additional record 67,503,800.00

Bank deposit interest 6,387,590.89

Total sum 326,546,223.04

The accrued renumeration as of December 31, 2014 consists of:

Annual Report 2014


4.16 Levy from Insurance companies

The Insurance Commission issued a declaration stating that insurance companies must deliver

their levy to the OIC starting from the period of 2008. Levy from insurance companies comprises:

2014 2013

Levy from non-life insurance companies 509,981,139.47 503,315,139.98

Levy from life insurance companies 913,290,388.99 801,547,517.01

Total 1,423,271,528.46 1,304,862,656.99

2014 2013

Application fees for license examination 64,210,000.00 49,383,600.00

License issuance fees 53,168,600.00 50,246,400.00

License renewal fees 64,893,200.00 61,129,100.00

Annual fees for insurance business operations 7,958,200.00 6,200,000.00

Income from training fees 17,529,600.00 21,747,600.00

Total 207,759,600.00 188,706,700.00

Unit : Baht

Unit : Baht

4.17 Fee Income from Insurance companies

87

4.18 Personnel Expenses

In 2014 the OIC had 751.94 million baht as personnel expenditure. Of this amount, 67.51 million baht

went to renumeration according to service costs in the past; 1.98 million baht was paid as remuneration

under MSP Project as additional pay under OIC according to Mutual Separation Plan (MSP). The payment

was made to the OIC’s ex-staff according to the Central Administrative Court’s sentence dated September

29, 2014; and 150,000.00 baht was paid to staff family members in cases of staff members’ death during

their service in the form of life insurance and accident insurance policies in addition to assistance money to

be paid according to OIC’s regulation.

Remuneration under MSP Project worth 1.98 million baht was an additional amount paid according

to the Insurance Commission’s Regulation on Mutual Separation Plan (MSP) to OIC ex-staff in compliance

with the Administrative Court’s sentence (Lawsuit Nos. 1528/2553, 1436/2554, and 1555-1556/2557 dated

September 29, 2014.

Allowance for assisting employees’ families worth 150,000 baht in cases of employees’ death while

still being in service. Allowance would be paid through respective employees’ group life insurance and group

accident insurance and the OIC would pay for cremation expenses according to OIC Regulation on Assistance

Allowance for Deceased Employees’ Families B.E. 2552.

2014 2013

Salaries 559,854,361.42 540,928,614.27

Levy to Thai Provident Fund 77,067,126.15 72,895,642.46

Remuneration based on servicing cost in the past 67,503,800.00 67,503,800.00

Cost of living allowance 12,016,645.16 12,214,498.92

Special allowance (Sor Por Por) 209,354.84 180,000.00

Overtime and holiday work payments 144,990.00 182,880.00

Professional fees 1,455,000.00 1,207,500.00

Educational expenses for employees’ children 1,184,526.00 1,080,837.00

Healthcare expenses 14,818,243.24 21,129,384.52

Educational expenses for employees 5,606,298.95 1,744,392.59

Levy for medical costs of terminated staff 6,879,157.24 6,273,181.80

Allowance for employees affected by flood disaster 150,000.00 -

Remuneration under MSP Project 1,979,550.00 -

Premium for personal insurance 3,071,132.61 3,113,251.32

Total 751,940,185.61 728,453,982.88

Unit : Baht

Annual Report 2014


4.19 Operating Expenses

2014 2013

Office supplies - disposable 8,836,910.29 7,771,857.40

Fuel and oil 7,117,630.01 7,223,151.86

IEC materials 2,911,415.81 1,876,407.25

Other materials 2,086,513.34 1,288,063.18

Lease-Asset: Land and Buildings 15,968,340.01 13,840,152.00

Vehicle rentals 3,590,166.67 3,619,044.00

Computers rentals 2,609,000.04 2,304,616.70

Receptions and ceremonies 407,514.39 209,225.89

Meeting and seminars 19,044,988.42 13,382,926.58

Travel expenses - domestic 4,304,945.91 3,919,435.07

Travel expenses – overseas 16,532,954.69 13,895,928.05

Fee for membership of foreign insurance institutes 1,006,232.00 1,005,146.50

Consultation fees 3,410,000.00 2,530,000.00

Insurance premiums 2,012,713.79 2,980,386.74

Utilities 22,429,306.87 20,727,504.75

Depreciation and amortization 58,708,507.54 58,957,674.23

Audit expenses 500,000.00 500,000.00

Public relations expenses 5,371,362.03 3,995,410.76

Bank service fees 2,009,117.70 1,953,453.37

Outsourcing service 103,369,693.18 62,667,073.85

Asset repair and maintenance 5,182,249.48 3,402,463.01

Taxes 1,784,262.30 1,806,183.37

Expenses - training for insurance agents/brokers 10,626,785.05 11,716,238.08

Allowances for meetings of outside persons 130,000.00 389,000.00

Miscellaneous 594,903.18 7,186,325.57

Total 300,545,512.70 249,147,668.21

Unit : Baht

Outsourced service expenses worth 103.37 million baht were used for hiring consultants to improve and develop the insurance business to be stronger and more stable as well as suit international standard and the current situation, leading to the public’s trust then.

89

4.20 Remuneration and Allowance for committees and sub-committees

4.21 Performance Results

2014 2013

Remuneration - Insurance Commission 5,880,000.00 5,821,612.89

Meeting allowance - Insurance Commission 2,915,000.00 3,070,000.00

Meeting allowance - other committees 184,000.00 244,000.00

Meeting allowance - recruitment subcommittees 304,000.00 456,000.00

Meeting allowance - legal subcommittees - 380,000.00

Meeting allowance - other subcommittees 664,000.00 820,000.00

Total 9,947,000.00 10,791,612.89

Unit : Baht

Unit : Baht

2014 2013Increase

(decrease)%

Income 1,719,789,310.43 1,568,295,450.28 151,493,860.15 9.66

Expenses 1,062,432,698.31 988,393,263.98 74,039,434.33 7.49

Net gains 657,356,612.12 579,902,186.30 77,454,425.82 13.36

In 2014, income of the OIC totaled 1,719,789,310.43 baht while expenses totaled 1,062,432,698.31

baht. Net gains increased from the previous year 77,454,425.82 baht, with net gains in 2014 and 2013 totaling

657,356,612.12 and 579,902,186.30 baht, respectively.

Annual Report 2014


4.22 Recategorization

Some items in the financial statement for the year ending December 31, 2013 have been recategorized

to match those in the financial statement for the year ending December 31, 2014 as follows:

4.23 Lawsuit under Court Consideration

Those employees who retired on December 31, 2011 and had their right to receive the renumeration

according to service costs in the past according to the OIC’s Regulation on Renumeration according to

Service Costs in the Past B.E. 2554 (announced on December 28, 2011) effective as of December 28, 2011

sued a lawsuit against the OIC demanding a total amount of 2.26 million baht (to be paid in two separate

sums) together with legal interests. The lawsuit was submitted to Chiangmai Administrative Court (Case No.

204/2556) on August 5, 2013. The lawsuit is now under the court’s consideration.

Original New Amount

- Meeting allowances for Budget Screening Committee

Meeting allowances for other committees

Meeting allowances for other subcommittees

176,000.00

- Meeting allowances for other committees

Meeting allowances for other subcommittees

Meeting allowances for other committees

64,000.00

A. Renumeration according to service costs in the past

No. NameAmount

(Excluding tax) Details Case No. Date Notes

1 Mr.Apirak Lengkhayan 3,225,600.00 Paid according to service costs in the past for 1st and 2nd sums plus interests for overdue payment

204/255659/2557

4 July 20136 March 2014

Pending Chiangmai Administrative

Court’s consideration

2 Mrs.Piyanart Sukumolchan

Not indicated, to be decided by court

Paid according to service costs in the past plus interests for overdue payment

292/2557 7 November 2014



3 Mrs.Suwattana Manakul

4,000,000.00 Paid according to service costs in the past for 1st and 2nd sums plus interests for overdue payment

1925/2557 20 November 2014

Pending Central Administrative


4 Mrs.Supanit Pisutthipak

Not indicated, to be decided by court

Paid according to service costs in the past plus interests for overdue payment

165/2557 20 November 2014

Pending Rayong Administrative


91

B. Payment according to labor laws

The OIC Act B.E.2550 Article 19 stipulates that “OIC affairs are not under enforcement of labor laws,

labor relations laws, social security laws and compensation payment laws; however, OIC staff and employees

must gain no less benefits than those stipulated in labor laws, social security laws and compensation

payment laws.” Presently, the OIC has not yet drafted its regulation on compensation payment for

employment termination cases, and this is the reason why some of those retired staff/employees sued

the OIC for compensation payment under labor laws as follows :

No. NameAmount

(Excluding tax) Details Case No. Date Notes

1 Mr.Apirak Lengkhayan 439,979.99 Paid compensation for employment termination according to the labor laws plus interests for overdue payment

316/2557 2 December

2014

Pending Chiangmai Administrative Court’s consideration

2 Mrs.Piyanart Sukumolchan

1,270,399.20 Paid compensation for employment termination according to the labor laws plus interests for overdue payment

315/2557 2 December

2014



3 Mrs.Suwattana Manakul

876,343.00 Paid compensation for employment termination according to the labor laws plus interests for overdue payment

188/2557 9 December

2014

Pending Rayong Administrative


4 Mrs.Supanit Pisutthipak

1,203,920.00 Paid compensation for employment termination according to the labor laws plus interests for overdue payment

193/2557 25 December

2014



4.24 Approval of Financial Statement

This financial statement was approved for issuance by the Secretary General of the Office of Insurance

Commission on May 21, 2015.

Annual Report 2014

Documents

Office of The Insurance Commission Notes to Financial Statements