"When buying insurance, coverage must be worthwhile and premiums must be affordable."
Many people probably think this way when buying an insurance policy. However, focusing only on these two factors might cause you to miss a bigger issue, leading to a poor deal.
Thairath Money invites you to explore the problem of illegal insurance and foreign insurance spreading in Thailand, and why this issue might impact us more than we realize.
Starting with Adisorn Pipatvorapong, Deputy Secretary-General for Legal Affairs and Inspection at the Office of Insurance Commission (OIC), told Thairath Money that foreign insurance and illegal insurance have existed for some time, originally promoted by word of mouth. Nowadays, promotion or guidance to buy through social media is more common, providing easier evidence for legal action than before.
Many cases involve illegal insurance, such as pet insurance or child health insurance. When checked, the originating company is abroad where no insurance regulatory authority exists. Some cases resemble pyramid schemes, initially paying claims using new buyers’ premiums, but over time the company disappears. Others qualify as fraud, with no clear company origin or real existence.
Therefore, buying foreign insurance carries many risks. For example, if you buy life insurance from a company in Singapore, when it’s time to claim, if agents cannot be contacted or the company goes bankrupt, you might have to travel there to handle it yourself. On another note, sellers, agents, or promoters who guide buyers are clearly violating Thai law, which states:
"Section 83 prohibits anyone from soliciting, advising, or acting in any way to induce a person to enter into an insurance contract with a foreign life insurance business or any person other than those licensed to conduct life insurance business under this Act."
Moreover, penalties under Section 113 of the Life Insurance Act B.E. 2535 (1992) include imprisonment for up to six months, a fine of up to 50,000 baht, or both.
If the OIC investigates and finds that the seller or promoter is a licensed agent in Thailand, their license will be revoked. Some cases are forwarded to foreign regulators—for example, Singapore’s Monetary Authority of Singapore (MAS) for further action.
Most recently (27 July), decisive action was taken against individuals selling foreign insurance via social media, including coordination with MAS and the Ministry of Digital Economy and Society to suspend accounts, with plans to refer cases to the Department of Special Investigation for criminal prosecution.
Sara Lamsam, Chief Executive Officer of Muang Thai Life Assurance Public Company Limited (MTL), explained that high-net-worth individuals tend to buy whole life insurance abroad because premiums were previously 30-40% cheaper.
One reason foreign premiums differ from Thai ones is due to different conditions, especially the "surrender value". In Thailand, the cash value usually increases over time, but abroad it is often fixed for the policy’s life, resulting in potentially lower premiums.
To meet customer needs, the company designed the “Muang Thai Premier Legacy” insurance product for this group, offering competitive premiums with the advantage that customers do not worry about exchange rate risks and coverage complies with Thai law.
Understanding the pain points and the illegal and foreign insurance situation in Thailand, Thairath Money invites you to check four important points that will help you buy insurance and get full coverage.
Read personal finance and financial planning news with Thairath Money to help you "Manage Your Money, Live Well."https://www.thairath.co.th/money/personal_finance
Follow the Facebook page Thairath Money at this link:https://www.facebook.com/ThairathMoney