Health Insurance for Expats in Thailand

Should you take out a ‘Local’ - Thailand based plan, or an ‘International’, or ‘Offshore’ plan?

Here are the facts - you make your own decision

A Common Question• A common question for expats in Thailand is

whether to take out private health insurance with a Thailand based company, or an international /‘offshore’ company

• Thai based expats are bombarded with a constant stream of promotional activity from offshore insurance companies and brokers encouraging them to choose the international option, which is promoted as the best choice

• Is this true? What are the facts?

First, there are a number of things to understand about the insurance industry

Regulators and Licensing• Every country has regulations - and a regulator - responsible for the

insurance sector

• In Thailand this structure is known as the Office of the Insurance Commissioner (OIC)

• The regulator is there to make sure the insurance industry is being operated within certain controls and guidelines, because insurance is such an important part of the overall economy

• In Thailand as with most countries, the Regulator concentrates on three areas of control:

! The insurance companies!

! The products!

! Dealings with customers - esp. sales and customer service

!

• Ensures insurance companies are adequately capitalised and remain financially sound at all times

• Thai insurance companies provide a comprehensive monthly report and declare all movements in assets and liabilities to ensure solvency

• The OIC requires immediate action if any aspect of the company’s operations is outside the guidelines - and can suspend a company if things are not corrected quickly

Thailand’s Insurance Regulator - Insurance Companies

• All insurance products must be approved

• Approval includes terms, conditions and definitions

• It also includes pricing to the consumer and limiting the commission that can be paid

• Companies must show they are able to pay claims (in worst cases) and have the systems and processes to manage their business

Thailand’s Insurance Regulator - Products

• The OIC sets standards for sales people - qualification/training, conduct, background, levels of commission, etc

• The OIC looks after the interests of consumers, handles consumer complaints and has authority to make decisions companies must follow

• Consumer complaints are normally handled and resolved quickly. Most are either about misrepresentation at time of sale or customers unhappy with a company’s decision re claims

Thailand’s Insurance Regulator - Sales/Advice

What are ‘Offshore’ Insurers?• ‘Offshore’ insurance companies are registered in a

small country that is normally tax-friendly As long as the company doesn’t do business in that country it can do whatever it likes in the rest of the world with no interference from the regulators

• Offshore insurance companies are registered in places like Gibraltar, the Seychelles, Bermuda, the Isle of Man, the Channel Islands, Liechtenstein, Belize, and Monaco

• Regulations in these sort of places are very light, making it largely up to the company to regulate itself. This doesn’t always turn out well

Two Separate IssuesWhen faced with the ‘local v offshore’ question, for Thai based expats there are normally two quite separate issues to consider

The advantages and disadvantages of

dealing with a offshore insurance company v a Thai

registered company

The advantages and disadvantages of

dealing with a broker or sales person based

outside Thailand v dealing with one in

Thailand

The Company Question: Advantages of Offshore InsurersThe following statements are often made as reasons expatriates should favour Offshore health insurers

!

Offshore/International health insurers offer cover internationally, locally

registered Thai insurers are only good for the local market

Offshore/international health insurers are better

at paying claims and offer superior customer service compared with Thai registered health

insurers

Offshore/international health insurers have superior plans with higher claim

limits, fewer restrictions, a better range of benefit

options, etc

The Company Question: Advantages of Offshore InsurersThe following statements are often made as reasons expatriates should favour Offshore health insurers

!

Offshore/International health insurers offer cover internationally, locally

registered Thai insurers are only good for the local market

Offshore/international health insurers are better

at paying claims and offer superior customer service compared with Thai registered health

insurers

Offshore/international health insurers have superior plans with higher claim

limits, fewer restrictions, a better range of benefit

options, etc

There is no evidence to support statements like this. Offshore insurers start with the drawback to overcome

that they are not easily accessible by clients other

than by email/phone

Offshore companies don’t typically deal with the lower

market segments however the benefits offered by Thai registered

insurers for the middle/upper market are comparable - this

claim is simply not true

This is simply not true - the geographic coverage, range of benefits and restrictions

compared to premiums are comparable

Offshore/international health insurers are more progressive and up with the latest industry developments whereas Thai registered companies are

somewhat backward

Offshore/international health insurers offer USD,

EUR or GPB currency options which is better for

expats

Offshore/international

policies are more easily portable if

you move countries

Offshore/international health insurers are more progressive and up with the latest industry developments whereas Thai registered companies are

somewhat backward

Offshore/international health insurers offer USD,

EUR or GPB currency options which is better for

expats

Offshore/international

policies are more easily portable if

you move countries

Some would agree, some would not. If an expat is paid in Thai

baht, there are advantages in this being

the currency of health insurance

This is true and represents perhaps the single ‘real’ advantage of offshore cover to the expat - but only a small % who know they will be moved to another

country regularly

There is no evidence for this and could be argued in the opposite

way as easily

The Bottom Line - Local v Offshore Companies

Good if you plan on moving

countries regularly

No need to worry about the regulatory process in Belize or the

Seychelles | OIC provides reassurance in terms of governing

the products and the companyIf there is a problem or you have a

grievance an advocate empowered to force a settlement

is immediately available

Your dealings with the company do not always have to be via phone,

email, etc

No other compelling advantages

Offshore Local / Thai

The Broker/Adviser Question: The Advantages of an Offshore Adviser

Not subject to any scrutiny or requirements relating to

background, qualifications or conduct when dealing with a

Thai based expat

No legal accountability for the quality of the advice provided to

a Thai residentNo ability to obtain restitution if you are not treated correctly -

even if you can find the person

By law not allowed to sell Thai registered products to you so by

selling ‘what they have’ rather than what is best for your needs

seldom are your interests placed ahead of theirs

The Bottom Line - Local v Offshore Adviser/Broker

Offshore Local / Thai

Can not offer you Thai registered products even if they

are in your interests

Not subject to locally relevant regulatory requirements

Able to say what they want whether correct or not with

impunity

If things go pear-shaped, you are totally on your own to try and

resolve issues

Subject to entry requirements and ongoing conduct in order to

retain their license

Subject to the regulator, civil and criminal prosecution for

inappropriate behaviour

Likely to be more easily accessible in person if needed

The Decision is Yours

Good luck!