Conditions for insurance agency activities in Vietnam

Conditions for insurance agency activities in Vietnam (Internet image)

1. What is insurance agent?

According to Article 84 of the Law on Insurance Business 2000 (amended 2010, 2019), insurance agents are organizations and individuals, that are authorized by insurance enterprises on the basis of insurance agency contracts to carry out the insurance agency activities according to the provisions of the Law on Insurance Business 2000 (amended 2010, 2019) and other relevant law provisions.

Specifically, insurance agency activities mean the activities of introducing, offering and selling insurance, arranging the conclusion of insurance contracts and other activities aiming to perform the insurance contracts under authorization of insurance enterprises.

(Clause 3, Article 3 of the Law on Insurance Business 2000 (amended 2010, 2019))

2. Conditions for insurance agency activities in Vietnam

Specifically, in Article 86 of the Law on Insurance Business 2000 (amended 2010, 2019), individuals and organizations conducting insurance agents activities need to ensure the following conditions:

* Individuals who conduct insurance agency activities must fully meet the following conditions:

- Being Vietnamese citizens permanently residing in Vietnam;

- Being full 18 years of age or older, having full civil act capacity;

-  Having certificate of Insurance agent issued by training institutions that the Ministry of Finance has approved.

The Ministry of Finance regulates on program, content, training form, issuing of insurance agent certificate.

* Organizations which conduct insurance agency activities must fully meet the following conditions:

- Being organizations lawfully established and operating;

- The agency organizations’ personnel directly performing the insurance agency activities must satisfy all conditions prescribed in Clause 1 of Article 86 of the Law on Insurance Business 2000 (amended 2010, 2019).

Persons who are being examined for penal liability or serving their imprisonment penalty or being deprived by the court of the right to professional practice due to their commission of the crimes prescribed by law are not allowed to sign insurance agency contracts.

3. Contents of insurance agency activities in Vietnam

According to Article 85 of the Law on Insurance Business 2000 (amended 2010, 2019), insurance agents may be authorized by insurance enterprises to carry out the following activities:

- Making introduction, sale offer of insurance;

- Arranging the conclusion of insurance contracts;

- Collecting insurance premiums;

- Arranging the payment of indemnities, insurance money when insured events occur;

- Carrying out other activities relating to the performance of insurance contracts.

4. Operational principles of insurance agencies in Vietnam

The operation of an insurance agent must be based on the following principles:

- Organizations and individuals operating as an insurance agency must meet agency requirements defined in Article 86 of the Law on Insurance Business 2000 (amended 2010, 2019) and must sign an insurance agency contract as per Article 87 of the Law on Insurance Business 2000 (amended 2010, 2019).

- Agencies of an insurance enterprise or foreign branch shall not simultaneously act as an agency of another insurance enterprise or foreign branch without the former's written approval.

- Individuals awarded an agent certificate but having not operating as an agent in 03 consecutive years must take agent certification exams prior to their operations as an agent. Having not operating as an agent means that the individual has not signed an agent contract with any insurance enterprises and foreign branches or been employed by an agency of any insurance enterprises and foreign branches.

- Insurance agencies and agents shall not:

+ Provide incorrect information and advertisements of the content and scope of operations of an insurance enterprise or foreign branch, conditions and terms of insurance in violation of insurance buyers’ legitimate rights and interests;

+ Obstruct an insurance buyer to disclose information on an insurance contract or incite a buyer or an insured not to declare details of an insurance contract;

+ Compete for customers by obstructing, enticing, bribing or threatening employees or customers of other insurance enterprises, foreign branches, insurance agencies and insurance broker enterprises;

+ Incite customers, in any manner, to terminate their insurance contracts in effect.

(Article 83 of Decree 73/2016/ND-CP)

Thanh Rin

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE