What are the conditions for issuance of a license to establish an insurance company in Vietnam according to the latest Circular?
What are the conditions for issuance of a license to establish an insurance company in Vietnam?
Pursuant to Clause 1, Article 11 of Decree No. 46/2023/ND-CP stipulating this content as follows:
Financial conditions for issuance of establishment and operation licenses of insurance companies, reinsurance companies and foreign branches in Vietnam
1. Organizations contributing 10% or more of the charter capital to establish an insurance company or reinsurance company must satisfy the conditions specified in Articles 64, 65 and 66 of the Law on Insurance Business and conditions on finance as follows:
a) Capital-contributing organizations operating in business lines that require minimum legal capital or charter capital or minimum capital must ensure equity minus legal capital or minimum charter capital or minimum capital; the minimum is greater than or equal to the expected capital contribution;
b) If a capital-contributing organization is an organization established and operating in accordance with the Law on Credit Institutions, the Law on Insurance Business, and the Law on Securities, these organizations must ensure to maintain and satisfy the conditions of financial safety and being approved by the competent authority to contribute capital in accordance with the provisions of law. Where relevant laws do not require a competent agency to obtain written approval, the capital contributing organization must have a written certification of this;
c) In case the capital contributing organization is an insurance company, a reinsurance company, a foreign financial or insurance group, it must ensure to maintain and meet the conditions of financial safety and be approved by the competent authority. The jurisdiction of the country where these organizations are headquartered allows the establishment of insurance companies and reinsurance companies in Vietnam. In case the regulations of the country where this organization is headquartered do not require a written approval, a written certification from a competent agency, organization or individual is required in accordance with the law of that country;
d) Having a financial statement for 03 consecutive years preceding the year of submitting the application for the establishment and operation license, which is audited with a fully accepted opinion.
Thus, insurance companies, reinsurance companies and foreign branches in Vietnam must satisfy the conditions specified in Articles 64, 65 and 66 of the Law on Insurance Business and financial conditions mentioned above.
What are the conditions for issuance of a license to establish an insurance company in Vietnam according to the latest Circular?
What are the order and procedures for issuance of a license to establish and operate an insurance company in Vietnam?
Pursuant to Article 16 of Decree No. 46/2023/ND-CP stipulating the order and procedures for issuance of a license to establish and operate an insurance company as follows:
- Organizations and individuals applying for establishment and operation licenses shall prepare dossiers according to the provisions of this Decree; submitted directly at the Ministry of Finance or sent by post or through the online public service system if eligible to apply.
- Within 30 days from the date of receipt of the application for a license, if the application is incomplete and invalid, the Ministry of Finance shall notify in writing of the request for supplementation or modification of the application. The maximum time limit for supplementing or amending the investor's dossier is 06 months from the date of notification. In case the investor fails to supplement or amend the dossier within the prescribed time limit, the Ministry of Finance will refuse to consider and grant the License.
The maximum time for organizations and individuals to supplement or amend their dossiers is 12 months from the date of the first notice by the Ministry of Finance. Past the above time limit, if organizations or individuals fail to complete dossiers and documents, the Ministry of Finance has the right to refuse to consider and grant licenses.
- Within 60 days from the date of receipt of complete and valid dossiers, the Ministry of Finance shall grant establishment and operation licenses to insurance companies, reinsurance companies and foreign branches in Vietnam according to Appendix II promulgated together with this Decree. In case of refusal to grant a License, the Ministry of Finance shall issue a written explanation clearly explaining the reasons therefor. The Ministry of Finance may only refuse to grant a License when the organization or individual contributing capital or the insurance company, reinsurance company or foreign branch to be established in Vietnam does not fully satisfy the conditions, application for a license under the provisions of this Decree or an organization or individual that cheats or forges papers and documents specified in Clause 3, Article 15 of Decree No. 46/2023/ND-CP.
What are the conditions for an insurance company to increase its charter capital?
Pursuant to Clause 1, Article 19 of Decree No. 46/2023/ND-CP stipulating as follows:
Increase in charter capital of insurance companies, reinsurance companies, and in capital granted by foreign branches in Vietnam
1. Insurance companies and reinsurance companies wishing to increase their charter capital, and foreign branches in Vietnam wishing to increase their allocated capital must satisfy the following conditions:
a) The increase in charter capital or allocated capital shall be made in Vietnam Dong;
b) Shareholders, capital contributors of insurance companies, reinsurance companies, parent companies of foreign branches in Vietnam are not allowed to use loan capital, investment trust capital of organizations, other individuals to supplement charter capital, capital allocated to insurance companies, reinsurance companies, foreign branches in Vietnam;
c) After increasing charter capital, insurance companies and reinsurance companies must still satisfy the conditions for shareholder structure specified in Article 66 of the Law on Insurance Business for joint-stock companies.
For joint-stock companies established before January 1, 2023, the satisfaction of regulations on shareholder structure specified in Article 66 of the Law on Insurance Business for joint-stock companies shall apply from January 1, 2026.
d) In case the insurance company or reinsurance company makes additional charter capital from the contributed capital of new shareholders or capital contributors, these new shareholders and capital contributors must satisfy the following conditions: prescribed in Clauses 1 and 2, Article 64 and Article 65 of the Law on Insurance Business.
Thus, the increase in charter capital of a company must satisfy the above conditions.
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