What are regulations on paying insurance indemnity and coverage exclusions in Vietnam?

1. What are regulations on paying insurance indemnity and coverage exclusions in Vietnam?

Article 40 of the Law on Insurance Business 2022 (effective from January 1, 2023) stipulates the following cases in which insurance exclusions:

1. Insurers and foreign non-life insurers’ branches shall not be exempted from paying insurance indemnity and coverage in the following cases:

a) The insured is deceased within 02 years of the first payment of premium or restoration of the insurance contract’s effect;

b) The insured’s death is caused willfully and intentionally by the policyholder or the beneficiary, except as prescribed in clause 2 of this Article;

c) The insured’s permanent injury or impairment is caused willfully and intentionally by the insured himself, the policyholder or the beneficiary, except as prescribed in clause 2 of this Article;

d) The insured’s death is caused by serving the death sentence;

dd) Other cases are stipulated in the insurance contract.

2. In the cases where there are more than one beneficiary, despite the fact that one or more beneficiaries intentionally cause death or permanent injury or impairment for the insured, the insurer or the foreign non-life insurer’s branch shall have the burden of paying insurance indemnity or coverage to the other beneficiaries under contractual terms and conditions.

3. When any situation specified in clause 1 of this Article arises, the insurer or the foreign non-life insurer’s branch shall pay the policyholder the surrender value of the insurance contract or all of the premiums already paid after deducting any reasonable costs and expenses as agreed upon in the insurance contract, except as provided in clause 2 of this Article. In case of the death of the policyholder, all of the refunds shall be treated according to law on inheritance.

2. What is designation and change of beneficiaries in life insurance contracts in Vietnam? 

According to Article 41 of the Law on Insurance Business 2022 (effective from January 1, 2023), designation and change of beneficiaries in life insurance contracts is as follows:

1. The policyholder shall have the right to designate the beneficiary, except group insurance contracts. If the policyholder is not the insured, the policyholder must obtain the written consent for designation of the beneficiary from the insured; if the insured is a minor or is incapable of civil acts or faces cognitive or impulse control problems or has restricted capabilities of civil acts, in order to designate a beneficiary, the approval from his/her legal representative must be sought.

2. If there are multiple beneficiaries, the persons entitled to designate beneficiaries as referred to in this Law may determine the beneficiary line or order of precedence or the percentage of benefit that each beneficiary can enjoy. If not doing so, all beneficiaries may be entitled to the equal percentage of benefit.

3. The policyholder can change any beneficiary provided that the written consent for such change from the insured is obtained, and the insurer or the foreign non-life insurer’s branch is informed in writing beforehand of such change. If the insured is a minor or incapable of civil acts or faces cognitive or impulse control problems or has restricted capabilities of civil acts, in order to change a beneficiary, the approval from his/her legal representative must be sought. The insurer or the foreign non-life insurer’s branch must give their certification in the insurance contract or the document attached hereto after receiving the notice of such change from the policyholder.

Best Regards!