Small players brace for tighter capital requirements.
Fitch Ratings says the second phase of Thailand's Risk-Based Capital (RBC 2) framework, which is in the process of being drafted, will enhance the risk profiles of insurance companies, which will make them more closely aligned with those of their international peers under similar solvency regimes.
The RBC 2 regime is being formulated in line with the terms of the ICP17 (Insurance Core Principles) Capital Adequacy standards.
"The more robust rules will increase confidence around the financial strength of the sector, but several challenges lie ahead, in particular for medium and small players that will need to cope with potentially more stringent capital requirements," said Mr. Jeffrey Liew, Head of Fitch's Asia-Pacific Insurance ratings group, at an industry briefing organised by Fitch Ratings (Thailand) Limited in Bangkok.
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