Licensing conditions of insurance brokerage companies in Vietnam

Licensing conditions of insurance brokerage companies in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Scope of business in the insurance brokerage sector in Vietnam

According to Article 131 of the Law on Insurance Business 2022, the scope of business in the insurance brokerage sector is as follows:

- Root insurance brokerage and reinsurance brokerage.

- Provision of insurance ancillary services.

- Other services related to insurance contracts that are rendered upon policyholders’ request.

2. Business principles of insurance brokerage services in Vietnam

Article 132 of the Law on Insurance Business 2022 stipulates the business principles of insurance brokerage services as follows:

- Honesty, objectivity, transparency; ensuring legitimate rights and interests of related parties.

- Adherence to the rules professional ethics adopted by socio-professional organizations.

- Insurance brokerage companies must agree in writing with clients when rendering insurance brokerage services.

3. Licensing conditions of insurance brokerage companies in Vietnam

Licensing conditions of insurance brokerage companies under Article 133 of the Law on Insurance Business 2022 are as follows:

* Licensing conditions of founding shareholders or members, including:

- In order to obtain business licences or permits, entities and persons applying for these licenses or permits must have the rights of business incorporation and management in Vietnam under the Corporate Law;

- In order to obtain business licences or permits, entities applying for these licenses or permits need to have legal personality, are operating in Vietnam, and meet financial conditions in accordance with the Government’s regulations.

* Licensing conditions concerning capital or assets:

- The amount of Vietnamese-dong contribution to the charter capital must not be less than the minimum required amount of charter capital under the Government’s regulations;

- Shareholders and capital-contributing members shall not be allowed to contribute borrowed funds or funds or assets held in trust for other entities and persons for equity participation purposes.

* Licensing conditions concerning personnel:

Any nominee for a Chairperson of the Managing Board or Chairperson of the Board of Members, Director or General Director or legal representative must meet managerial competency and professional qualification requirements and credentials prescribed in Article 138 of the Law on Insurance Business 2022.

* The applicant for such business licence and permit must choose their business type in accordance with the Law on Insurance Business 2022 and must have the draft charter conforming to the regulations of the Corporate Law.

* In order to be licensed or permitted to contribute capital to establish; purchase shares or ownership interest making up at least 10% of charter capital of an insurance brokerage company, the entity incorporated under foreign law must satisfy the following conditions:

- It must be an entity established under domestic law of a foreign country that is directly involved in or has their subsidiary render insurance brokerage services during 05 consecutive years promptly before the date of submission of application for the business license or permit;

- It must be licensed or permitted to establish their insurance brokerage company in Vietnam, and must be certified not to commit any serious violation against law on insurance brokerage of the country where their head office is located, by the competent authority of the foreign country within 03 consecutive years immediately before the date of submission of application for the business license or permit.

4. Documentation requirements for application for business licenses or permits of insurance brokerage companies in Vietnam

According to Article 134 of the Law on Insurance Business 2022, the documentation requirements for application for business licenses or permits of insurance brokerage companies are as follows:

- Each set or package of application documents for a business licence or permit must be comprised of the followings:

+ Form of written request or application for the business license or permit;

+ Company’s draft charter;

+ First five years' business plan, including clear description of proposed service activities;

+ Resume, police record, duplicate copy of certificate or qualification indicating professional competency and expertise of the nominee for the Chairperson of the Managing Board or the Chairperson of the Board of Members, Director or General Director or legal representative;

+ Rate and method of capital contribution; list of founding entities or persons or members or shareholders that intend to contribute at least 10% of the charter capital; and documents evidencing compliance with the conditions set out in Article 133 herein.

- The Government shall impose detailed regulations on conditions, documentation requirements, procedures and processes for application for business licenses or permits of insurance brokerage companies.

Quoc Dat

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