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Thai Retirement Visa Insurance for Americans: FATCA Issues

Transcript of the above video:

As the title of this video suggests, we are discussing Thai Retirement Visa Insurance as well as FATCA. FATCA stands for Foreign Account Tax Compliance Act. I always have to look that up. There so many acronyms they have to deal with sometimes, especially when it comes to US Federal Law that unfortunately I forget them from time to time. I forget what they stand for; I know how they operate but I can't remember the actual elongated title. 

That being said, there have been recent announcements here in the Kingdom with respect to the promulgation of regulations wherein those who wish to retire in the Kingdom of Thailand and maintain retirement status, need to go ahead and get insurance. We have done a number of videos on this channel on this topic specifically and something that I thought was noteworthy, well noteworthy in prior videos, it should be noted and I should preface everything else by saying we have yet to see the finalized regulations on this so we don't know exactly how this is going to operate. That being stated, I do believe that anyone that is in Thailand in retiree status, whatever you want to call that, whether it is an O-A Retirement Visa issued from a Thai Consulate or Embassy abroad or an extension of stay based on retirement here in the Kingdom, I think the way that the announcements read, we are going to see insurance being required for everyone who stays in Thailand in retiree status.  There are policy reasons for this; I have gotten into all of that in other videos. 

That being said, again to reiterate we have yet to actually see the regulations roll out yet so until we do it is a good idea to wait around until we actually see them. Many of the folks that watch this channel and one in particular, brought something to my attention which caused me to go ahead and make this video. Folks that are looking into this in anticipation for rule changes are being prudent in my opinion. I have been accused in multiple comments as well as a couple of pieces of correspondence I am trying to "scare" people with this information and my opinion that all retirees are going to be required to have insurance in the Kingdom.  That is really not my intention. My intention is to provide as much nuance, clarity and forewarning of upcoming rule changes so as to allow people to make preparation in order to more smoothly transition over into the new Immigration regime specifically with respect to retiree visas. It is not my intention to scare people. It is basically my intention to prepare people. 

So on that note, as I said, a viewer of this channel, and we think that viewer very much, brought this to my attention. We will go ahead and put that up on the screen for a minute or two here and I am going to go ahead and quote it.  It says Distribution Announcement: and this is from Krungthai AXA Life Insurance. For those of you who are unaware, there are a certain number of Life Insurers who have come out and said "yes hey we will provide policy coverage for individuals in the Kingdom that need it in order to maintain retiree status."  Krungthai AXA is one of those entities that has made that announcement and in a prior distribution announcement dated 9th June, 2014 the number is DTB 14001. Subject: the policy NOT to accept not to accept is underlined, so obviously for importance, NOT to accept a US citizen or those who have the duty to pay taxes to the US.” For purposes of this video just go ahead and presume anyone that has lawful permanent residence in the United States is going to be treated effectively as a US citizen for purposes of this discussion. So quoting further, "As Krungthai AXA Life PLC will have to comply with the US Foreign Account Tax Compliance Act, FATCA, and in complying with FATCA, KAL has established a policy not to accept US citizens or those who have the duty to pay taxes to the US from 1st July, 2014 onward. However this announcement will not apply to group products which no cash value or savings and components and MRTA product.

They go into the background: What is FATCA? What is a US person? I discussed this in some detail also on this channel and videos specific to FATCA. Do I think that this might be amended in light of the fact that they changed the insurance policies from an Immigration context here in the Kingdom?  I think it is possible. I also think it is possible that certain Insurance Companies may deem it to be not worth their time to deal with Americans and when I say "not worth their time",  understand there is a large compliance regime that comes into effect when certain individuals are dealing with Americans especially with respect to financial instruments, bank accounts etc. abroad. Insurance is no different. Now one thing that I thought was notable. It said "there is an exception for group products which no cash value or savings components". So you know these new insurance products in a Retirement Visa context, they may not have a savings component, so FATCA may not apply to them and it may be just fine and dandy for these specific companies to go ahead and issue this type of insurance to retirees.

All of that remains to be seen. Until we see the regulatory regime roll out and then thereafter we actually see these policies being issued and then from a practical basis we can do some analysis to see if FATCA even applies.

But I do thank the viewer for pointing this out. It is noteworthy for a video and again I think it provides further nuance, further clarity for those who are planning further years of retirement here in the Kingdom of Thailand.