Insurance laws Vietnam
Vietnam's insurance industry is governed by Law No. 08/2022/QH15 on Insurance Business, effective from January 1, 2023, and supplemented by Decree No. 46/2023/ND-CP, which provides detailed guidance on its implementation. These legal frameworks aim to modernize the sector, enhance transparency, and align with international commitments.
📜 Key Provisions of the Insurance Business Law 2022
1. Foreign Investment and Market Access
Full Foreign Ownership:Foreign investors are permitted to own up to 100% of the charter capital in insurance and reinsurance enterprises, aligning with Vietnam's WTO commitments and international agreements
Sectoral Restrictions:Foreign non-life insurance enterprises and branches are limited to engaging in one of the following sectors: life insurance, non-life insurance, or health insurance. Exceptions exist for certain combinations of health and casualty insurance products with a maximum term of one year
2. Insurance Contracts
Alignment with Civil Code:The law harmonizes insurance contract provisions with the Civil Code of 2015, addressing aspects such as contract cancellation, invalidation, and unilateral termination
3. Corporate Governance and Financial Requirements
Charter Capital Requirements:The law stipulates minimum charter capital for various insurance entities. For instance, life insurers must have a minimum capital of VND 750 billion for life and health insurance, escalating to VND 1,300 billion for those offering unit-linked and retirement insurance
Capital Reduction Conditions:Insurance companies and foreign branches wishing to reduce their charter capital must meet specific financial criteria and maintain compliance with capital and solvency margin regulations
4. Outsourcing and Digital Distribution
Outsourcing Regulations:Insurers may outsource certain activities, excluding internal control, audit, risk management, and insurance product distribution. The outsourced entity must perform at least 75% of the workload, with insurers retaining ultimate responsibility
Digital Sales Channels:The law permits the sale of insurance products via online platforms, in addition to traditional methods, subject to further guidance from the Ministry of Finance
5. Regulatory Oversight and Data Management
Database ManagementThe Ministry of Finance is tasked with establishing and managing a comprehensive database encompassing information on insurers, policyholders, agencies, and administrative sanctions, effective from January 2024
🏛 Implementation via Decree No. 46/2023/ND-CP
Decree No. 46/2023/ND-CP provides detailed guidance on implementing the Insurance Business Law 2022, includin:
Minimum Capital Requirements Specifies the minimum charter capital for various insurance entities, with transitional provisions for existing companies to comply by January 1, 2028
Share Transfer Approvals Mandates Ministry of Finance approval for any transfer of shares or capital contributions resulting in ownership of 10% or more, or less than 10%, of the charter capital
Actuary Qualifications Imposes stricter requirements for actuaries within insurance companies, enhancing the professionalism and reliability of actuarial assessments
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