Vietnam: What is the policy for the development of insurance business? What is the principle of providing and using insurance services?
What does the insurance business consist of? What is the insurance business in Vietnam?
Pursuant to Clause 1, Article 4 of the Law on Insurance Business 2022 of Vietnam stipulates as follows:
Insurance business industry (also the insurance industry) covers
- insurance,
- reinsurance,
- cession
- others related to insurance business, including insurance agent, broker and insurance ancillary services.
Pursuant to Clause 2 of the Law on Insurance Business 2022 of Vietnam, insurance business is defined as follows:
2. Insurance service (also insurance business sector) refers to an activity of an insurer, non-life insurer’s foreign branch, mutual providing microinsurance product that insures the risk of the insured. That activity is performed by the policyholder’s paying insurance premiums in order for the aforesaid entity to pay indemnity or insurance coverage in case of any policy event that occurs under terms and conditions of an insurance contract.
How does the policy develop the insurance business in Vietnam?
Pursuant to Article 5 of the Law on Insurance Business 2022 of Vietnam, the policy for developing insurance business activities is as follows:
- The Government shall provide protection for legitimate rights and interests of entities and persons participating in insurance and organizations rendering insurance services.
- The Government shall provide insurers, reinsurers, foreign insurance branches in Vietnam and mutuals providing microinsurance product with incentive and facilitation measures for research and development of products, services, application of advanced technologies in the insurance industry.
- The Government shall provide insurers, reinsurers, foreign insurance branches in Vietnam and mutuals providing microinsurance product with incentive and facilitation measures for resumption of investment in the economy, re-investment and development of the insurance market.
- The Government shall provide incentive and facilitation measures for launching, offering and participating in agricultural, forestry, fishery or aquaculture insurance, microinsurance and other insurance products serving social welfare and security purposes.
Vietnam: What is the policy for the development of insurance business? What is the principle of providing and using insurance services?
What is the principle of providing and using insurance services in Vietnam?
Pursuant to Article 6 of the Law on Insurance Business 2022 of Vietnam, the principles of providing and using insurance services are as follows:
- Entities and persons in Vietnam wishing to participate in insurance schemes can only participate in insurance with insurers, foreign non-life insurers’ branches or mutuals providing microinsurance products obtaining establishment permits or business licenses in Vietnam, except in case of using cross-border insurance services under the international treaties to which the Socialist Republic of Vietnam is a signatory.
- The Government shall provide detailed regulations on provision and use of cross-border insurance, insurance brokerage and insurance ancillary services in conformity with the international treaties to which the Socialist Republic of Vietnam is a signatory.
How is the database of insurance business regulated in Vietnam?
Pursuant to Article 11 of the Law on Insurance Business 2022 of Vietnam, the database of insurance business activities is as follows:
- The Government shall invest in establishing the database in the insurance industry. The Ministry of Finance shall be responsible for setting up, running and managing the insurance-industry database designed for state management and protection of legitimate rights and interests of parties involved in insurance business activities.
- Insurers; reinsurers; foreign insurance branches in Vietnam; insurance brokers; insurance ancillary service providers; mutuals providing microinsurance product shall be responsible for providing policyholder, the insured, subject matter insured, insurance agent and other relevant information used as inputs into the database in the insurance industry.
- According to the principle of insurable interest, a policyholder must be entitled to the insurable benefit varying according to specific types of insurance contract under this Law;
- According to the principle of indemnity, the amount of coverage or indemnity that the insured can get shall not exceed the actual loss incurred in a policy event, unless otherwise agreed upon in an insurance contract;
- According to the principle of subrogation, the insured shall be responsible for giving the insurer or foreign non-life insurer the right to claim the amount of loss from the third party responsible for such loss if such amount falls within the permissible loss limit. This principle shall not apply to life and health insurance policies;
- According to the principle of unpredictable risk, in order for a risk to be covered or insured against, it must be an unexpected and unanticipated one.
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