How shall insurance companies, branches of foreign non-life insurance companies in Vietnam provide microinsurance products?

How shall insurance companies, branches of foreign non-life insurance companies in Vietnam provide microinsurance products?

Pursuant to Article 147 of the Law on Insurance Business in 2022 (takes effect from 01/01/2023) stipulating insurance companies, branches of foreign non-life insurance companies in Vietnam that provide microinsurance products as follows:

1. Insurance companies and branches of non-life insurance companies can, on their own account, provide microinsurance products that are relevant to authorized insurance services:

a) directly or in person;

b) via insurance agents;

c) via any person who is a staff member or member of a socio-political organization, socio-professional organization or cooperative authorized by insurance companies or branches of foreign non-life insurance companies to provide counsels on or make arrangement for conclusion of insurance contracts on behalf of such organization or cooperative;

d) in other permissible ways.

2. Insurance companies and branches of non-life insurance companies must track, manage and account for revenues and expenses arising from provision of microinsurance products separately from those arising from services rendered by others.

What are regulations on mutuals providing microinsurance products in Vietnam?

Pursuant to Article 148 of the Law on Insurance Business in 2022 (takes effect from 01/01/2023) stipulating mutuals that provide microinsurance products in Vietnam as follows:

1. Mutuals providing microinsurance products can only provide microinsurance products for their own members. Members participating in insurance plans must be both owners of mutuals providing microinsurance products and policyholders.

2. Insurance contracts between mutuals providing microinsurance products and members participating in insurance plans must conform to general regulations on insurance contracts, life insurance contracts, health insurance contracts and property insurance contracts prescribed in Chapter II herein.

3. The Government shall impose detailed regulations on provision of microinsurance products by mutuals providing microinsurance products.

What are licensing conditions of mutuals providing microinsurance products in Vietnam?

Pursuant to Article 149 of the Law on Insurance Business in 2022 (takes effect from 01/01/2023) stipulating licensing conditions of mutuals that provide microinsurance products in Vietnam as follows:

1. Conditions of a founding member, including:

a) If that member is a person, he/she must be a Vietnamese citizen having full civil capacity and a member of the entity proposing establishment of the mutual providing microinsurance products;

b) If that member is an entity, it must be the representative of that member as per law.

2. The amount of Vietnamese-dong contribution must not be less than the minimum limit under the Government’s regulations.

3. Any nominee for a Chairperson of the Managing Board, Director or General Director, legal representative or actuary of microinsurance products must meet the conditions and standards under the Government’s regulations.

4. A plan to offer microinsurance products that is in place must allow for the number of members and the network of the mutual to be established.

5. The available draft charter must be in line with business objectives of the mutual providing microinsurance products and conform to the Government’s regulations.

6. The available information technology system must be appropriate; can give support for or track activities of specific microinsurance contracts; can help in financial and accounting matters related to microinsurance.

Best regards!