Page 121 - TGIA_AnnualReport2014

Report of the Account, Finance and

Investment Committee

1. Writing off Bad Debt from Reinsurance Recoveries Arising from the Flood in 2011
Thai General Insurance Association has asked for a kind permission from Ministry of Finance, Office of Fiscal
Policy, Revenue Department, and Office of Insurance Commission to allow insurance companies to write off bad
debt from reinsurance recoveries arising from the flood in 2011. The 2011 Flood was the worst disaster ever taking
place in Thailand and insurance companies have paid claims for more than 400,000 million baht in total. These flood
damages were covered by reinsurance with both domestic and foreign reinsures. When insurance companies had
paid claims to the insureds, they were entitled to recover the claims from reinsurers under agreed upon reinsurance
contracts. However, in recovering claims from those reinsurers, the reinsurers paid the claims, some in full and
some in part. Some reinsurers have filed suits to courts or Office of Arbitration and the litigations would take a long
time to be finalized, which may affect the financial stability of insurance companies. Therefore, to alleviate tax
burden of the insurance companies, it has been proposed to the public sector to grant a tax measure for writing off
bad debts and allowing insurance companies to use those debts not paid by reinsurance companies as expense
for tax deduction pertaining to the Ministerial Regulations No. 186 (B.E. 2534).

2. 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) Phase I, together with OIC, Thai Life
Assurance Association, and auditing firms, aiming to prepare the insurance business to be ready for the Financial
Reporting Standard on Insurance Contract (IFRS 4) Phase I, by preparing a specimen of information disclosure in
the notes to financial statements and insurance separation and a manual for actuarial operation, to disseminate to
member companies to use as a guideline.

3. International Financial Reporting Standard on Fair Value Measurement (IFRS 13)
Federation of Accounting Professions under the Royal Patronage of His Majesty the King has adopted the
International Financial Reporting Standard on Fair Value Measurement (IFRS 13) to be used with businesses in
Thailand in order to lessen the complexity and make the disclosure on fair value measurement more transparent
and consistent with international accounting standard. The Standard would be applied to financial statements
having a starting date on or after January 1, 2015 onward. Thus, the Committee had informed member companies
to prepare their policy, accounting system, and related information to ensure the readiness of procedures for fair
value measurement and proper reporting method that were capable to handle transactions and items classification
in financial statements efficiently. The Committee also held a training on “International Financial Reporting Standard
on Fair Value Measurement (IFRS 13)” on October 21, 2014 at Swissotel Le Concorde Hotel. The number of training
hours was accredited for accountants and auditors’ training hour counts.

สมาคมประกันวินาศภัยไทย | Thai General Insurance Association 119