OIC plans committee to oversee actuaries’ licences in Thailand

The Office of the Insurance Commission (OIC) is contemplating the establishment of a screening committee empowered to suspend or revoke the licences of actuarial mathematicians in a bid to mitigate risks to insurance firms and policyholders.

Assistant Secretary-General of the OIC, Ayusri Kambamlue, stated that the office aims to enhance the protection of insured individuals’ benefits and elevate actuarial standards.

Insurance reserve calculations must adhere to actuarial science principles, necessitating actuaries with the requisite knowledge, understanding, and experience, said Ayusri.

“The insurance reserve is integral to the risk-based capital framework, which influences an insurance company’s financial strength. If an insured person is eligible for compensation, insurance companies must have sufficient funds to pay the insured and accurately calculate the reserves required for future payments.”

Actuaries licensed by the OIC must adhere to professional standards and uphold the ethics of the actuarial profession as stipulated by the OIC. To maintain high standards and ethics among actuaries in Thailand, it is essential to implement a mechanism for monitoring their performance.

The regulator sanctioned the formation of a committee to review the suspension or revocation of actuaries’ licences. This committee will comprise representatives from the OIC, relevant associations, and academic experts, who will assess and investigate the actions of actuaries, potentially leading to the suspension or revocation of their licences.

For instance, in certain situations, actuaries may calculate insurance reserves that fail to meet the OIC’s operating standards, potentially jeopardising the adequacy of a company’s insurance reserves needed to compensate policyholders, Ayusri noted.

“The OIC anticipates that this committee will help sustain the high standards of actuaries’ performance in Thailand and contribute to the stable and sustainable growth of the insurance industry in the future.”

Ayusri acknowledged that in the past, some insurance companies faced severe liquidity issues due to a significant number of insurance claims, particularly during the Covid-19 pandemic.

Actuaries should evaluate the business’s balance sheet and assess risks associated with a high volume of claims to ensure the company maintains sufficient capital, Ayusri emphasised, reported Bangkok Post.