What are included in investment funds of insurance companies, reinsurance companies and foreign branches in Vietnam?

What are included in investment funds of insurance companies, reinsurance companies and foreign branches in Vietnam?

Pursuant to Clause 1 Article 99 of the Law on Insurance Business in 2022 (takes effect from 01/01/2023) stipulating investment funds of insurance companies, reinsurance companies and foreign branches in Vietnam as follows:

Investment funds of insurance companies, reinsurance companies and foreign branches in Vietnam shall be comprised of the followings:

a) Equity;

b) Idle capital derived from technical provisions, subject to the Government's regulations;

c) Other legitimate funds prescribed in law.

What are principles of investments made by insurance companies, reinsurance companies or foreign branches in Vietnam?

Pursuant to Clause 2 Article 99 of the Law on Insurance Business in 2022 (takes effect from 01/01/2023) stipulating principles of investments made by insurance companies, reinsurance companies or foreign branches in Vietnam as follows:

Investments made by insurance companies, reinsurance companies or foreign branches in Vietnam must adhere to the following principles:

a) Ensure safety, liquidity and efficiency; comply with law and self-responsibility rules applied to investment activities;

b) Technical provisions may be used as investments in Vietnam only, except those specified in point b of clause 2 of Article 100 herein;

c) It is prohibitory that borrowed funds are used for investment and fiduciary investment in securities, real estate business or contribution of capital to other enterprises;

d) It is prohibitory that investment accounting for 30% of the portfolio of investments in companies belonging to the same group of companies having mutual ownership relationship is made. This prohibition clause shall not apply to deposits made at credit institutions and outward investment funds existing in the form of establishment of companies or establishment of foreign branches in the receiving foreign countries;

dd) Investments made in return for those of shareholders or members contributing capital or persons associated with these shareholders or members contributing capital are not allowed, except in case of deposits made at transaction offices of shareholders or members that are credit institutions;

e) Purchase of corporate bonds issued to serve certain purposes of restructuring of loans of issuing companies is not allowed;

g) In case of fiduciary investments, trustees must be licensed to perform fiduciary investment activities falling within the scope of fiduciary investment.

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