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Expat Health Insurance - The Onshore/Offshore Conundrum

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Health insurance for expats - what are the advantages and disadvantages of onshore and offshore insurers and advisers. Written with specific reference to Thailand but applicable in all countries.

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Expat Health Insurance - The Onshore/Offshore Conundrum

  1. 1. 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
  2. 2. 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?
  3. 3. First, there are a number of things to understand about the insurance industry
  4. 4. 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
  5. 5. • 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
  6. 6. • 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
  7. 7. • 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
  8. 8. 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
  9. 9. Two Separate Issues When 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
  10. 10. The Company Question: Advantages of Offshore Insurers The following statements are often made as reasons expatriates should favour Offshore health insurers Offshore/international health insurers are better at paying claims and offer superior customer service compared with Thai registered health insurers
  11. 11. The Company Question: Advantages of Offshore Insurers The following statements are often made as reasons expatriates should favour Offshore health insurers 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
  12. 12. The Company Question: Advantages of Offshore Insurers The 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
  13. 13. The Company Question: Advantages of Offshore Insurers The following statements are often made as reasons expatriates should favour Offshore health insurers This is simply not true - the geographic coverage, range of benefits and restrictions compared to premiums are comparable
  14. 14. The Company Question: Advantages of Offshore Insurers The following statements are often made as reasons expatriates should favour Offshore health insurers Offshore/international health insurers have superior plans with higher claim limits, fewer restrictions, a better range of benefit options, etc
  15. 15. The Company Question: Advantages of Offshore Insurers The following statements are often made as reasons expatriates should favour Offshore health insurers 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
  16. 16. Offshore/international health insurers offer USD, EUR or GPB currency options which is better for expats
  17. 17. 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
  18. 18. Offshore/internatio nal policies are more easily portable if you move countries
  19. 19. 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
  20. 20. Offshore/international health insurers are more progressive and up with the latest industry developments whereas Thai registered companies are somewhat backward
  21. 21. There is no evidence for this and could be argued in the opposite way as easily
  22. 22. 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 company If 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
  23. 23. 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 resident No 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
  24. 24. 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
  25. 25. The Decision is Yours Good luck!
  26. 26. Health | Travel | Personal Accident Insurance www.PacificCrossHealth.com

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