Corporate governance is the most essential element for insurance business as the business is based on trust, integrity and accountability to insured and citizens. In order to achieve sustainable and robust business amidst rapid changes, a company is required to implement checks and balances, comply with laws and establish systematic enterprise risk management.
In this regard, Muang Thai Life Assurance Public Company Limited (“Company”) has developed this Corporate Governance Framework as principles or guidelines for Board of Directors to supervise the Company in conducting the business with transparency, trustworthy, and responsibility to stakeholders. By concerning long-term benefits, the Company is fully aware that the Board of Directors is the key to providing business direction, core policies, and business strategies. The Board of Directors is responsible for ensuring that the Company has internal control process and mechanism, effective audit procedure, clear performance monitoring guideline as well as a distinct separation between the functions of governance and those of management. In addition, subcommittees are appointed to support the Board of Directors by considering essential issues of the Company in various aspects and ensuring that the Company conducts the business with stability, transparency, and responsibility to insured and stakeholders, and eventually achieves business sustainability.
Objectives of Corporate Governance Framework
1) To provide the Board of Directors with clear corporate governance process or guideline to ensure business transparency, responsibility to insured and stakeholders and long-term benefits for the Company’s stability and sustainability
2) To ensure that the Company is trustworthy, transparent, able to operate the business firmly and continuously, as well as adaptable to rapid changes in current and future business environment
3) For the Board of Directors to be aware of its roles and responsibilities in supervising the Company and ensuring that the Company has an effective internal control system, comply with laws, and implement enterprise risk management system
1) Board of Directors means the Board of Directors as prescribed by the laws of life insurance.
2) Director means a person who serves as a director in the Board of Directors.
3) Executive Director means a director who is an executive or a director responsible for operations like executives. It shall include an authorized director unless it is evident that such signing is made according to the Board of Directors’ resolution and it is co-sign with other directors.
4) Executive means a manager or the first four top-ranking executive after the manager level as well as all other 4th ranking equivalent, and accounting or finance executives of department executive level and up.
The Company separates between the functions of governance and management and determines clear and specific roles and responsibilities of the Board of Directors and the Executives to ensure suitable management and supervision. The organizational structure is reviewed annually in response to changing business environment.
The Board of Directors is responsible for determining key strategies and policies, ensuring the availability of effective risk management and governance, monitoring the Executive’s performance in alignment with the strategies and policies efficiently and effectively. The Board of Directors must ensure that the Executives report key issues of the Company and establish a reporting process to provide the Board of Directors with adequate and updated information and allow the Board of Directors to fully exercise its authority, duty and responsibility. Therefore, the Company is able to conduct the business with fairness, transparency, responsibility to stakeholders under the Corporate Governance Code and achieve long-term value.
The Board of Directors appoints the Executive Committee to act as if it is a management committee. The Executive Committee shall be in charge of discussing strategies and collaborating with the Management to ensure an alignment with business plan and budget. The Executive Committee shall ensure that the Company complies with policy for other businesses, outsourcing service policy and market conduct by mainly considering customers’ benefits which include product development, insurance and mutual fund sales offering processes that do not cause misunderstanding or take advantage from customers’ misunderstanding, customer service life insurance benefits payment and delay of life Insurance indemnification and fair management of complaints made by customers, include data privacy. In terms of investment, the Board of Directors appoints the Investment Committee to ensure the Company’s compliance with investment policy and real estate business policy. In addition, the Board of Directors has appointed the Product Governance Committee to launch the products in accordance with the vision, strategy, financial goals and plans prescribed by the Board of Directors.
The Board of Directors has also appointed the following subcommittees to support its duties.
1) Audit Committee
2) Risk Management Committee
3) Nomination and Remuneration Committee
4) Corporate Governance and Sustainability Committee
5) Executive Committee
6) Investment Committee
7) Product Governance Committee
1) Structure and Composition of Board of Directors
1.1) Structure and Composition of Board of Directors
The structure and composition of Board of Directors is developed to be suitable with business size and complexity and allows the Board of Directors to perform its duties effectively in accordance with Public Limited Companies Act B.E. 2535, Life Insurance Act B.E. 2535, OIC’s Notification Re: Corporate Governance of Life Insurance Companies B.E. 2562 and other related laws.
The Company’s Articles of Association, Article 31: “The Company shall have the Board of Directors, consisting of no more than sixteen (16) Directors, to conduct its operation. No less than one-half (1/2) of the total number of Directors shall reside in the Kingdom of Thailand and no less than three-quarters (3/4) of the total number of Directors shall be Thai nationals.”
Charter of Board of Directors: Prescribes the structure of the Board of Directors below.
Executive Directors shall not be more than one-third (1/3) of the total number of Directors.
Independent Directors shall not be less than one-quarter (1/4) of total number of Directors.
Chairman of the Board of Directors must be an Independent Director or Non-Executive Director.
1.2) Qualifications of Directors
According to the Charter of Board of Directors, the Directors must have no prohibited characteristics under laws of life insurance, laws of public limited companies, laws of securities and exchange, notifications of Office of Insurance Commission and other laws related to Director’s duties.
1.3) Qualifications of Independent Directors
According to the Charter of Board of Directors, Independent Director must have no prohibited characteristics under laws of life insurance, laws of public limited companies, laws of securities and exchange, notifications of Office of Insurance Commission and other laws related to Independent Director duties.
1.4) Roles and Responsibilities of Directors
The authorities, duties, and responsibilities of the Board of Directors are as follows:
The Board of Directors shall determine direction and strategic target of the Company as well as consider and approve policy and annual budget of the Company. Business strategies should be in line with the risk management framework and the risk management policy as well as the Company’s risk appetite.
The Board of Directors shall consider and approve Investment Management Guideline and other businesses, monitor, and control investment and other businesses of the Company to be suitable with situation and obligation.
The Board of Directors shall govern and oversee the matters related to Sustainability Development, which encompasses Environmental, Social, Governance, and Economic aspects, ensuring compliance with laws, regulations of regulators. The best practices and international standards related to sustainability shall be also taken into account.
The Board of Directors shall consider, review and approve the risk management framework, the risk management policy and the risk appetite as well as reporting overall risk management and assessment including the Company’s financial stability, process and risk management control of the Company in order to be in line with the regulations of the regulators.
The Board of Directors shall operate the Company to have efficient internal control and audit system.
The Board of Directors shall govern and oversee the Company’s risk management to be in line with the risk appetite as well as formulating reports of risk status and compliance with the risk management policy, monitoring the Company’s capital to be stable, solvent and sufficient for both current and future business operations and providing support to Risk Management Committee and related department in order to allow them to perform duties effectively and completely with adequate resources.
The Board of Directors shall, honestly and by protecting the Company’s interest, perform their duties in accordance with the laws, objectives and Articles of Association of the Company and resolutions of the shareholders’ meetings.
The Board of Directors shall appoint the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Investment Committee, Product Governance Committee, and Bancassurance Steering Committee, which have authority and responsibility as determined by the Board of Directors.
The Board of Directors shall consider the appointment of Executive Committee which shall be comprised of up to 9 members under the recommendation of the Chief Executive Officer and the approval of the Board of Directors. The Executive Committee shall report to the Board of Directors.
The Board of Directors shall elect a person who has the qualifications and who possesses no prohibited characteristics under the law of public limited companies, the law of securities and exchange and the law of life insurance as Director in the next Board of Directors’ meeting in case there is vacancy in Director’s seat due to other reasons rather than being retired by rotation. Unless the remaining term of office of the vacating Director is less than 2 months.
The Board of Directors shall appoint any other person to operate the Company under control of the Board of Directors or authorize such person and/or within the timing as deemed appropriate by the Board of Directors, where the scope of authority could be cancelled, revoked or amended by the Board of Directors.
The Board of Directors shall consider and approve the quarterly, half year and annual financial statements that have been audited by the external financial auditor and reviewed by the Audit Committee.
2) Appointment of Subcommittees to Support Board of Directors
The Board of Directors has appointed the following subcommittees to support its duties.
2.1) Audit Committee
The authorities, duties, and responsibilities of the Audit Committee are as follows:
Review and ensure that the Company produces comprehensive, accurate and reliable financial reports that disclose key information completely in accordance with generally accepted accounting standards, and approve to release the interim financial statements (quarterly financial statements) that have been audited by independent auditors, along with scrutinizing reports submitted to relevant regulators.
Review the effectiveness and appropriateness of the Company’s risk management processes with the risk management department.
Review so as to the Company’s operations complies with the Life Insurance Act, the Anti-Money Laundering Act, the Countering Financing of Terrorism and Weapon of Mass Destruction Act, and regulations of the Office of Insurance Commission, and review the operations of the Company to comply with other regulations related to the Company’s business.
Review and assess the adequacy, effectiveness, and appropriateness of the Company's internal control systems, internal audit systems, risk management, corporate governance, and sustainability efforts. Report audit results and provide opinions on the Company’s overall internal control assessment to the Board of Directors.
Consider selecting, propose to appoint and terminate contract of the independent persons to perform a duty as the independent auditors of the Company, including offer the remuneration for the service of such persons as well as join a meeting with the independent auditors without participation of the management at least once a year.
Determine the authority, duties, and responsibilities of the Internal Audit Division. Review and approve the Internal Audit Charter, annual audit plan, and significant audit plan adjustments. Review the Internal Audit Division’s effectiveness.
The Charter of Audit Committee is established, aligning with the scope of responsibilities in the Company's operations. This charter should receive approval from the Company’s BOD and be reviewed for its appropriateness at least once a year or when there are significant changes.
Consider and approve the Company’s policy and process for non-audit services provided by the external auditor to ensure they do not affect the auditor’s independence.
Review investment or any other activities that might cause damages to financial status and the wealth of the Company based on recommendations made either from the independent auditors or from the Company’s staff.
Review the Company's disclosure of information, especially in cases involving related party transactions or potential conflicts of interest, to ensure accuracy and completeness.
Oversee and handle complaints or information from stakeholders submitted to the Board of Directors, including any evidence or indications of inappropriate actions submitted to the Internal Audit Division, ensuring appropriate action is taken.
Provide an advice to the management to ensure that they perform their duties effectively and efficiently. Then, report to the Board of Directors to make an improvement within the timeframe deemed appropriate on the following matters found or suspected by the Audit Committee;
Transaction with the conflict of interests.
Fraud, or irregular matter or significant defect in internal control system.
Violation of the Life Insurance Act, the Anti-Money Laundering Act, the Countering Financing of Terrorism and Weapon of Mass Destruction Act and regulations of Office of Insurance Commission or any laws related to the Company’s business
Any fraudulent activity or actions which adversely affects the financial position, performance or the reputation of the Company
If the Board of Directors or the management failed to take an action for improvement within a recommended period of time fixed by the Audit Committee, the Audit Committee must report to the Office of Insurance Commission without delay.
Approve corporate governance reports and IT audit reports to be submitted to relevant
Review the appropriateness of self-assessment compliance related to anti-corruption measures to certify the Company’s membership in the Thai Private Sector Collective Action Against Corruption. Oversee risks and internal controls related to anti-corruption, and regularly report audit findings to the Board of Directors. Urgent issues concerning corruption must be promptly reported to the Board of Directors, along with regular reporting on whistleblower statistics.
Hold meetings with the Company’s auditor and actuaries on financial statement-related matters and reports submitted to regulators. Hold joint meetings with the Internal Audit Division on the Company’s internal control system effectiveness.
Approve the review of policies or regulations as assigned by the Board of Directors.
Perform other duties as assigned by the Board of Directors with the Audit Committee’s consent. If necessary, the Audit Committee may seek advice from external consultants or professional experts for audit work at the Company’s expense.
In carrying out its duties, the Audit Committee is directly responsible to the Board of Directors, while the Board of Directors remains accountable for the Company’s operations to external parties.
2.2) Risk Management Committee
The authorities, duties, and responsibilities of the Risk Management Committee are as follows:
To determine the risk management policy which cover the significant risks of the Company to be proposed to the Board of Directors, and regularly review the risk management policy and other risks-related policies.
To ensure that the Company has clear risk management regarding authority, duty, responsibility, and risk report procedures which comply with rules, regulations, and criterion that regulate business of the Company.
To ensure that the Company has appropriate, sufficient and effective risk management process that comply with the Company’s risk management policy, rules, regulations, and criterion that regulate business of the Company, and be in line with the good corporate governance. The risk management process should include identification, assessment, response, monitoring, review, and report of the risks. This should also include stress testing, Business Continuity Plan, risk model testing, and complete, timely, and reliable database for decision making. The details must be reported to the Board of the Directors.
To provide advice to the Board of Directors on the risk management or any matters relating to the Company’s risk regarding appropriate directions, including any advice on matters that may lead the Company to violate related regulations, rules or criterion.
To oversee and provide advice to the Board of Directors on the adequacy and sufficiency of infrastructure, tools, resources, systems, and documents for efficient risk management and in a timely manner.
To review and provide advice to the Board of Directors on setting risk appetite, risk tolerance, risk limit, and any assumptions relating to risk management models.
To regularly oversee and provide advice to the Board of Directors on current and future capital adequacy of the Company.
To consider and prepare contingency plan for any emergency risks.
Risk Management Committee is authorized to view the meeting minutes of every Company’s Committees except the Audit Committee, the Nomination and Remuneration Committee and Corporate Governance and Sustainability Committee to manage the risk of the enterprise.
2.3) Nomination and Remuneration Committee
The authorities, duties, and responsibilities of the Nomination and Remuneration Committee are as follows:
1. Nomination
To determine policies, principle and process in recruiting appropriate person to be in a position of Company’s Directors and members of Subcommittees to have duties and responsibilities as assigned.
To nominate and select person who has qualification based on related laws and regulations and propose to the Board of Directors for consideration on following positions;
(1) Director
(2) Member of Subcommittees
To ensure that the Board of Directors and Subcommittees are in appropriate size and have suitable combination with the corporate as well as to adjust the BOD to match the changing environment. The Board of Directors has to contain persons with skills, knowledge, competency, experience, and expertise in various fields that benefit the operation of the Company (Skill Matrix), as well as focus on fostering and incorporating the elements of diversity to ensure that the Board of Directors’ structure has its appropriateness and diversity, which result in enhancement of the Company’s sustainable growth.
2. Remuneration
To determine and consider the remuneration for Board of Directors and Subcommittees, including meeting allowance, annual bonus, other fringe benefits both in monetary and non-monetary values and present such matter to the Board of Directors.
To ensure that Board of Directors and Subcommittees receive appropriate remuneration in comparison to their duties and responsibilities toward the Company.
To have an annual consideration on the remuneration of the Board of Directors and Subcommittees, taking into account the environment, performance and yield in industry level.
To disclose policy and criteria on the determination of remuneration of each type of Director and member of Subcommittees, and report it in the Company’s annual report.
2.4) Corporate Governance and Sustainability Committee
The authorities, duties, and responsibilities of the Corporate Governance and Sustainability Committee are as follows:
To monitor, determine, and review Corporate Governance Framework, Corporate Governance Policy, Code of Conduct, including various policies to align with relevant regulators and international practice.
To agree and approve Sustainable Development Framework and Plan.
To monitor advise and ensure that the Company’s operations are in line with good corporate governance and sustainable development which leads to continuous practice that is appropriate for the Company’s business, compliance with international practices, laws and regulations.
To report to the Board of Directors about the Company’s good governance and sustainable development, as well as advice about practice and improvements as needed.
To appoint subcommittees and working teams as needed.
Corporate Governance and Sustainability Committee is in charge of preparing self-assessment form for evaluating the performance of the Board of Directors and subcommittees as a whole and individual. Then, it shall be proposed to the Board of Directors for consideration and approval to evaluate the performance every year. After the Corporate Governance and Sustainability Committee processes the assessment data, the Committee shall present the data to the Board of Directors to use it as a guideline for improving the Company’s performance and effectively support the duties of the Board of Directors. This also assures that the Board of Directors continues to perform its roles and responsibilities efficiently.
In addition, Corporate Governance and Sustainability Committee shall report the performance assessment of Executives to the Board of Directors on annual basis.
2.5) Executive Committee
Executive Committee shall hold a position as if they are the Board of Directors among the Management. Besides the assignments from the Board of Directors, Executive Committee shall be granted from the Board of Directors the authorities to perform as follows.
To cooperate with the Management regarding all aspects of the Company’s business as usual and to cooperate with the Management to implement according to the business plan and budget.
To consider the matters designated by the Board of Directors which are subject to annual revision and amendment as deemed appropriate by the Board of Directors.
To consider matters which are business as usual of the Company that the Management refers to Executive Committee.
To consider other matters that are not business as usual of the Company and/or outside the business plan and budget that has been approved in advance, where such matter must have material impact on the financial status and profitability or reputation of the Company.
2.6) Investment Committee
The authorities, duties, and responsibilities of the Investment Committee are as follows:
To determine and present Investment Policy Statement, Policy for Real Estate Business, Investment Management Guideline and Investment Procedure annually to be approved by the Risk Management Committee and Board of Directors.
To approve the amendment of IMG and Investment Procedures during the year.
To approve Investment Plan that is in-line with IPS and risk management policy.
To determine investment target and return on investment as a part of corporate budget to be approved by the Board of Directors.
To approve investment, real estate business under the scope of IPS and Policy for Real Estate Business.
To control and monitor investment, real estate business of the Company in compliance with IPS, Policy for Real Estate Business, Risk Management policy, investment procedures and relevant laws, and to evaluate the investment activities and report performance to the Board of Directors regularly.
To be in charge of good corporate governance, transparency, and precaution against conflict of interest regarding investment transaction and real estate business of the Company, while ensuring adequate work systems, human resources, and data.
To have authorities to appoint Subcommittees, authorized Investment Committee members, working teams, appropriate persons to approve and perform investment and real estate business activities in accordance with the policies.
2.7) Product Governance Committee
The authorities, duties, and responsibilities of the Product Governance Committee are as follows:
To propose the Product Policy and Framework for the Board of Directors' approval. The policy shall be linked with the strategic risk, CAR, the principles of Insurance, Actuarial, Laws, Ethics, and Market Conduct.
To monitor and follow up the Company's performance on Product. Details are as follows:
To conduct the Company's operation regarding Product to be in accordance with the Company's vision, strategies, and financial targets as determined by the Board of Directors.
To conduct the Company to perform the duties according to the laws and regulations regarding product.
To monitor and follow up the performance on the Product Policy.
To conduct the Company to be in line with the Market Conduct principles.
To prepare the Company's manpower in aspect of quantity and quality to be in line with the business and effectiveness.
To conduct the Company's operation regarding product to be fair, systematic, up-to-date, and be able to overall evaluate and completely assess the business risk.
To follow up the Company's operation to be in line with the Company's procedures for being prompt and efficient before sale process.
To manage the risks arising from insurance products in accordance with the minimum standards for risk management related to the development of insurance products and the determination of insurance premiums of the company as per OIC announcement.
To yearly report the material matter and information regarding Product for the Board of Directors’ and the Risk Management Committee’s acknowledgment.
Directors shall have the following duties and responsibilities.
1) The Directors shall comply with the laws of life insurance and relevant laws. 2) The Directors shall perform the duties with responsibility, integrity and prudence, and treat the Company’s interest and the insured’s interest as the first priority. The Directors must not use their position to seek personal interest or cause damages to the Company, and must comply with the Company’s objectives, Articles of Association, resolutions of the Board of Directors, and resolutions of the shareholders’ meetings. 3) The Directors must understand their roles, duties and responsibilities as well as share useful comments and suggestions in meetings. The Directors must perform duties to their fullest capacity and attend the Board of Directors meetings every time, except in case of necessity.
The Directors must make a decision independently and reasonably on the ground of sufficient information. In order to prevent conflict of interest, during the Board of Directors meetings, if there is any agenda involves with a Director who has a stake in it, directly or indirectly, the Board of Directors must be notified and such Director must not involve in a decision-making process or vote in that agenda.
The Executives have duties and responsibilities to perform according to the strategies and policies determined by the Board of Directors in order to achieve the Company's objectives and goals. The Executives must at least perform the following duties.
1) The Executives shall effectively implement the strategies and policies determined by the Board of Directors by taking into account the Company’s long-term value and sustainable business. 2) The Executives shall promote, support and ensure an availability of effective risk management process and internal control system. The Executive shall ensure that the Company complies with laws and provide fair treatment to the insured. 3) The Executives shall report key information about the Company’s performance, the Company’s risk level, and performance of the Executives to the Board of Directors correctly, considerably and timely so that the Board of Directors can supervise and monitor the performance effectively. 4) The Executive shall determine an appropriate hierarchical structure or reporting lines as well as specify roles and responsibilities of each unit in the hierarchical structure clearly for effective risk management, audit and governance. 5) The Executives shall promote risk management culture in the Company in order to monitor and maintain the Company’s risks within the risk appetite set by the Board of Directors. The Executives shall also communicate about risk management policy to all employees to raise their understanding and awareness. 6) The Executive shall set annual performance evaluation of Executives by comparing with target set by the Board of Directors, and report the performance to the Board of Directors. The Executives must not perform duties as full-time employees in other organizations unless being approved by the Board of Directors.
The Corporate Governance Framework must be reviewed at least once a year to align with changing situations. The Company is required to submit the Corporate Governance Framework to the OIC within one month from the date of the Board of Directors’ approval of significant changes.
