Page 101 - TGIA_AnnualReport2013

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6. Holding the 24 Insurance Seminar
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Thai General Insurance Association had held the 24 Insurance Seminar from November 22-24, 2013 at the
Royal Cliff Beach, Pattaya, Chonburi, under the theme of “Determining the Future of Thai Non-life Insurance
Business toward A Sustainable Growth.” Mr. Pravej Ongartsittigul presided over the opening ceremony and also
joined the forum with representatives from business sectors. In this seminar, a number of qualified speakers from
many organizations in both public and private sectors had participated in the presentation and forum programs.

7. Writing off Bad Debt from Reinsurance Recoveries
The flood in 2011 is the biggest catastrophic flooding in Thailand which caused a huge amount of losses. The
total amount of insured losses was approximately 440 billion baht. Non-life insurance companies had expedited
payment of claims; however, some reinsurance companies failed to reimburse full amounts of reinsurance recovery
and negotiated to pay partially for the claims, causing the non-life insurance companies to face high losses while
being unable to deduct bad debt from reinsurance recoveries as a tax-purposed expense accordingly to the
regulations of the Revenue Department.
Therefore, Thai General Insurance Association proposed to the Ministry of Finance, asking for a regulation
on writing off bad debt from reinsurance recoveries in the case that the reinsurance company became default on
the flood-related claims either when there was a negotiation for hair-cut or when a settlement could not be reached
and forcing the insurance company to go to court for a litigation, to alleviate the financial problem and financial
position of such insurance company.
In this regard, Ministry of Finance agreed in principle and gave policy for responsible organizations to
proceed. Thai General Insurance Association and the Office of Insurance Commission are now in the process of
drafting guidelines for the devaluation to support the criteria for writing off the bad debt to be set later on by the
Revenue Department.

8. Pursuing reinsurance claims from the flood in 2011
Thai General Insurance Association has been a center for pursuing the flood claims from reinsurance
companies, following the guidelines jointly set by the insurance companies, and also an intermediary to accelerate
the reinsurance companies to pay the claims. Guidelines were jointly set for the operations between insurance
companies and insureds, insurance companies and insurance companies, and insurance companies and
reinsurance companies. For the claim settlements between insurance companies and domestic reinsurers, the
Association drafted a claim settlement agreement, a partial claim payment agreement, and a claim settlement and
partial claim payment agreement for insurance companies to choose upon their discretion. The Association also
contacted Caisse Centrale de Reassurance (CCR), asking the company to pay the pending claims to insurance
companies in Thailand. CCR had held meetings at the Association’s meeting room to review those claims that need
to be scrutinized.

9. Requesting for Reconsideration on the Value-Added Tax in Connection to Reinsurance
Thai General Insurance Association wrote to the Revenue Department, requesting for reconsideration on the
value-added tax in connection to reinsurance. Based on the explanation from the Revenue Department, the
value-added tax is currently calculated based on the gross premium written. As such, the Association wrote to
explain and requested the use of net premium written after deduction of reinsurance discount instead. The Legal
Division of the Revenue Department agreed in principle. The issue was proposed to the Department’s executive
(an advisor to the Revenue Department) for approval. The result will later be notified to the Association.

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