VIET NAM: New Insurance Business Law to Come into Force Next January

The amended Law on Insurance Business enters into force on 1 January 2023 after being passed by Viet Nam’s National Assembly on 16 June 2022, although some provisions take effect later on 1 January 2028. The Law applies to all insurers, reinsurers, brokers, agents, auxiliary service providers and mutual micro-insurance firms. It will also impact offshore non-life insurers and offshore reinsurers, as well as offshore insurers and reinsurers; brokers; and financial and insurance groups.

Changes include removing certain insurance requirements on the legal advisory and insurance brokerage professions; and allowing temporary life cover on receiving insurance applications and initial payments. Insurers can also sell various insurance products along with compulsory insurances.

The law recognises that insurers can provide auxiliary services related to the insurance business. It also recognises investment from offshore financial and insurance groups, and that such investment may not necessarily be from insurance firms. Insurers are required to maintain specified capital ratios and set aside reserves needed to pay liabilities. Other provisions regulate outsourcing; online sales; foreign ownership ratios; market information and databases; capital determination, solvency and preventive measures; information disclosure; and dispute resolution.