Page 120 - TGIA_AnnualReport2013

Report of the Account, Finance and

Investment Committee

1. Writing off Bad Debt from Reinsurance Recoveries Related to the Flood in 2011
As a result of the flood in 2011, there was a huge amount of claims filed to insurance companies. Thai
General Insurance Association had proposed to the Ministry of Finance to set criteria for writing off bad debts from
reinsurance recoveries in the case that the a reinsurance company became default to pay the whole amount of
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. In either case, insurance companies were unable to deduct bad

debt as a taxable expense. In this regard, the 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 of reinsurance recoveries related to flood in 2011
to support the criteria for writing off the bad debt to be set later on by the Revenue Department.

2. 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 instead. The Legal Division of the Revenue Department
agreed in principle.

3. Working Group of the Preparedness for the Compliance to the International Financial Reporting
Standard on Insurance Contract (IFRS 4) Phase I
The Committee has been involved in the Working Group of the Preparedness for the Compliance to
International Financial Reporting Standard on Insurance Contract (IFRS 4) Phrase I, aiming to prepare the insurance
business to be ready for the aforementioned Standard in 2016 by conducting series of trainings for member
companies and having members companies to try recording transactions accordingly to the Standard. The
information disclosure form was also developed to be exemplified to the member companies.

4. Development Project of Risk-Based Capital (RBC) Framework Phase 2
The Office of Insurance Commission started the Development Project of Risk-Based Capital (RBC)
Framework Phase II for non-life insurance business by setting up a joint working group between public sector and
private sector. In this regard, the OIC has hired Tower Watson Co., Ltd. to be a consulting party of this Phase II. The
time frame of the project is 2 years. The Project aims to enhance the RBC Framework to be more comprehensive
and fit with the principle set out by the International Association of Insurance Supervisors (IAIS).

118 รายงานประจำาปี 2556 | Annual Report 2013