According to the legal firm Dentons LuatViet, investors will only be authorized to conduct insurance businesses in the form of joint stock companies and limited liability corporations when Vietnam's new insurance law (named "Law on Insurance Business 2022") goes into effect in January.
Currently, four legal structures—an insurance joint stock company, an insurance limited liability company, an insurance cooperative, and an insurance mutual—are available to investors who wish to engage in the insurance sector.
Mr. Tran Duy Canh, the managing partner of Dentons LuatViet, based in Ho Chi Minh City, and Ms. Tran Thi Ngoc Linh, senior partner based in Hanoi, note the following additional noteworthy points about the new insurance law:
allowing foreign investment in the insurance sector
The Law on Insurance Business 2022 states that foreign investors will be permitted to own up to 100% of the charter capital of insurance and reinsurance companies in order to fulfill the international commitments that Vietnam has made. The law also states unequivocally that foreign non-life insurance businesses and branches are only permitted to work in one of the following three industries: life insurance, non-life insurance, or health insurance:
firms offering non-life insurance in the health insurance industry;
foreign non-life insurance companies and their branches that offer health and accident insurance with a maximum one-year policy term; and
Firms that offer casualty insurance with a maximum one-year policy term include health insurance companies.
The authors suggest that potential investors should also take note of the specific requirements in the Law on Insurance Business 2022 that must be satisfied in order to be awarded a license to open and run an overseas branch.
Additional services
For insurance policies for which they oversaw the execution, insurance brokers will not be permitted to conduct loss assessment operations. When they are also the policyholders, insureds, or beneficiaries, the party providing auxiliary insurance services is also not permitted to estimate the loss and facilitate the settlement of insurance claims. These rules were created to prevent the circumstance of "becoming the judge in one's own case" when it comes to the resolution of insurance contracts.
The National Assembly passed a new insurance law in June 2022, and it will go into effect on January 1, 2023.
0 Comments