The implementation of the Law on Insurance Business
12:29 15/12/2016
The Government has just issued Decree detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business.
This Decree details and guides the implementation of a number of articles of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, including:The establishment and operation of life insurance businesses, non-life insurance businesses, health insurance businesses and reinsurance businesses (below collectively referred to as insurance businesses), branches of foreign non-life insurance businesses (below referred to as foreign branches), insurance brokerage businesses, insurance agents, cross-border insurance service providers, representative offices of foreign insurance businesses or insurance brokerage businesses, and funds for the protection of the insured; The financial management regime applicable to insurance businesses, foreign branches and insurance brokerage businesses.
* Conditions for the establishment of an insurance limited liability company:
In addition to the general conditions prescribed in Article 6 of this Decree, a member that wishes to contribute capital for the establishment of an insurance limited liability company must be an organization and meet the following conditions:
a/ For a foreign organization:
- Being a foreign insurance business that has been permitted by a competent foreign agency to operate in the business line expected to be conducted in Vietnam, or being a subsidiary of a foreign insurance business which specializes in making offshore investment and is authorized by the foreign insurance business to contribute capital to establish an insurance business in Vietnam;
- Having operated for at least 10 years in the business line expected to be conducted in Vietnam;
- Having total assets worth at least USD 2 billion in the year preceding the year of submission of a dossier of application for a license;
- Having not committed any serious violation of the regulations on insurance business and other regulations of the country where the organization’s head office is located for 3 consecutive years preceding the year of submission of a dossier of application for a license.
b/ For a Vietnamese organization:
- Being an enterprise operating in the field of finance, banking or insurance;
- Having total assets worth at least VND 2 trillion in the year preceding the year of submission of a dossier of application for a license.
* Conditions for establishment of an insurance joint-stock company:
In addition to the general conditions prescribed in Article 6 of this Decree, a to-be-established insurance joint-stock company must meet the following conditions:
a/ Having at least 2 institutional founding shareholders that meet the conditions prescribed in Clause 1, Article 7 of this Decree and jointly hold at least 20% of shares of the to-be-established company;
b/ Within 3 years after the company obtains a license, the founding shareholders must jointly hold at least 50% of the company’s ordinary shares eligible to be sold.
This Decree takes effect on July 1, 2016. The Government’s Decree No. 45/2007/ND-CP of March 27, 2007, detailing the implementation of a number of articles of the Law on Insurance Business; Decree No. 123/2011/ND-CP of December 28, 2011, detailing the implementation of a number of articles of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business and amending and supplementing a number of articles of Decree No. 45/2007/ND-CP of March 27, 2007; Decree No. 68/2014/ND-CP of July 9, 2014, amending and supplementing a number of articles of Decree No. 45/2007/ND-CP of March 27, 2007, and Decree No. 46/2007/ND-CP of March 27, 2007, prescribing the financial regime applicable to insurance businesses and insurance brokerage businesses, cease to be effective on the date this Decree takes effect.
This Decree details and guides the implementation of a number of articles of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, including:The establishment and operation of life insurance businesses, non-life insurance businesses, health insurance businesses and reinsurance businesses (below collectively referred to as insurance businesses), branches of foreign non-life insurance businesses (below referred to as foreign branches), insurance brokerage businesses, insurance agents, cross-border insurance service providers, representative offices of foreign insurance businesses or insurance brokerage businesses, and funds for the protection of the insured; The financial management regime applicable to insurance businesses, foreign branches and insurance brokerage businesses.
* Conditions for the establishment of an insurance limited liability company:
In addition to the general conditions prescribed in Article 6 of this Decree, a member that wishes to contribute capital for the establishment of an insurance limited liability company must be an organization and meet the following conditions:
a/ For a foreign organization:
- Being a foreign insurance business that has been permitted by a competent foreign agency to operate in the business line expected to be conducted in Vietnam, or being a subsidiary of a foreign insurance business which specializes in making offshore investment and is authorized by the foreign insurance business to contribute capital to establish an insurance business in Vietnam;
- Having operated for at least 10 years in the business line expected to be conducted in Vietnam;
- Having total assets worth at least USD 2 billion in the year preceding the year of submission of a dossier of application for a license;
- Having not committed any serious violation of the regulations on insurance business and other regulations of the country where the organization’s head office is located for 3 consecutive years preceding the year of submission of a dossier of application for a license.
b/ For a Vietnamese organization:
- Being an enterprise operating in the field of finance, banking or insurance;
- Having total assets worth at least VND 2 trillion in the year preceding the year of submission of a dossier of application for a license.
* Conditions for establishment of an insurance joint-stock company:
In addition to the general conditions prescribed in Article 6 of this Decree, a to-be-established insurance joint-stock company must meet the following conditions:
a/ Having at least 2 institutional founding shareholders that meet the conditions prescribed in Clause 1, Article 7 of this Decree and jointly hold at least 20% of shares of the to-be-established company;
b/ Within 3 years after the company obtains a license, the founding shareholders must jointly hold at least 50% of the company’s ordinary shares eligible to be sold.
This Decree takes effect on July 1, 2016. The Government’s Decree No. 45/2007/ND-CP of March 27, 2007, detailing the implementation of a number of articles of the Law on Insurance Business; Decree No. 123/2011/ND-CP of December 28, 2011, detailing the implementation of a number of articles of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business and amending and supplementing a number of articles of Decree No. 45/2007/ND-CP of March 27, 2007; Decree No. 68/2014/ND-CP of July 9, 2014, amending and supplementing a number of articles of Decree No. 45/2007/ND-CP of March 27, 2007, and Decree No. 46/2007/ND-CP of March 27, 2007, prescribing the financial regime applicable to insurance businesses and insurance brokerage businesses, cease to be effective on the date this Decree takes effect.