Cross-Border Compulsory Motor Vehicle Insurance Law between Thailand and Lao PDR

Abstract

            Thailand and Lao People’s Democratic Republic have implemented the Cross Border Compulsory Motor Vehicle Insurance Cooperation Project since 2009 in order to drive Protocol 5 - ASEAN Scheme of Compulsory Motor Vehicle Insurance (Protocol 5). However, the implementation was delayed because of 2 problems: 1) the inconsistency between the countries’ compulsory motor vehicle insurance laws, and 2) the laws concerning the sale of cross-border compulsory motor vehicle insurance packages by the insurance companies registered for the Protocol 5 program via the Central Data System called ASEAN Compulsory Motor Insurance (ACMI) or “ACMI Central Data System.” This article aims to study the guidelines on harmonization of both countries’ compulsory motor vehicle insurance laws and the guidelines on development of a bilateral agreement for supervision of both countries’ compulsory motor vehicle insurance.

            This study finds that 1) the inconsistencies between the two countries’ compulsory motor vehicle insurance laws are caused by the differences in how contract type is determined, the amount of coverage, premium rates, and how the duration of coverage under the contract is determined; and that 2) the problem of laws concerning the sale of cross-border compulsory motor vehicle insurance packages by the insurance companies registered for the Protocol 5 program is caused by sales of insurance via the ACMI Center Data System and by the practices of the agencies responsible for supervising registered insurance companies that sell insurance via ACMI under Protocol 5.

            Therefore, the author suggests that first, Thailand must increase the damage coverage for victims of accidents caused by vehicles crossing from Lao PDR and that it must regulate the law requiring that all type of cross-border vehicles from Lao PDR purchase type 3 voluntary motor vehicle insurance together with compulsory motor vehicle insurance. For this, the countries should develop a bilateral cooperation agreement for cross-border compulsory motor vehicle insurance. Second, the Office of Insurance Commission of Thailand (OIC) must establish a cooperation policy and coordinate with the agencies of both countries that are involved in the cross-border Compulsory Motor Vehicle Insurance Cooperation Project in order to share data on the insured and on policy coverages of both countries via the ACMI Center Data System. Furthermore, they must establish policies to develop the ACMI Center Data System for the future.