85
10. International participation in the industry is restricted. There are currently six foreign
branches licensed to operate in Thailand, but no new branches have been licensed in several years.
In practice, a moratorium on new licenses (domestic and foreign) has been in place for over 20 years
(although there is no official policy on this matter), the rationale being that there were many insurers
in Thailand. However, new players could still enter the Thai insurance industry through a joint
investment in an existing insurance company. Section 10 of the LIA and Section 9 of the NLIA
require that Thai nationals hold at least 75 percent of the total number of a public limited company
insurer's voting shares and three quarters of the company's directors must be Thai nationals.
11. At present, approximately 25 percent of total industry assets are foreign owned. This
has decreased from approximately 31 percent in 2013. In total, there are 34 insurance companies,
which have some international participation and are part of international insurance groups: 11 life
insurance companies and 23 non-life insurance companies. Approximately 23 insurance companies
have equity links to banking groups and non-financial conglomerates.
12. Insurance market concentration is low. The Herfindahl-Hirschman Index of market
concentration is less than 1400 for the life industry indicating an unconcentrated industry while the
index for the non-life industry is less than 200 indicating a highly competitive industry. The largest
market share of any participant for the life industry was 26 percent while that of the non-life
industry was 8 percent.
13. International financial reporting standards and an independent audit function and
actuarial involvement are observed in Thailand. The Federation of Accounting Professions (FAP)
is authorized to develop accounting standards in Thailand under the supervision of the Accounting
Profession Supervision Committee, and has generally adopted all International Financial Reporting
Standards (IFRS) with a one-year delay from the equivalent IFRS Standard's effective date. Thai
Financial Reporting Standards (TFRS) are aligned with the 2016 version of IFRS. The TFRS approach
to the valuation of assets and liabilities implies a risk-adjusted present value approach to both
assets and liabilities, assuming a going-concern basis.
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