Instructions on how to ranking insurers in Vietnam

Instructions on how to ranking insurers in Vietnam (Internet image)

1. Purposes of ranking and assessing insurers in Vietnam

According to Article 3 of Circular 195/2014/TT-BTC, the purposes of ranking and assessing insurers are as follows:

- Insurers shall assess, rank and take appropriate measures to enhance their effectiveness, the financial capacity, the quality of business administration and the risk management.

- The Ministry of Finance of Vietnam shall supervise insurers following the contents as define in Clause 1 of Article 3 of Circular 195/2014/TT-BTC; to take appropriate measures to ensure the insurers and the insurance market to operate safely, effectively and stably.

2. Instructions on ranking insurers in Vietnam

Pursuant to Article 4 of Circular 195/2014/TT-BTC and the assessment results, the insurers shall rank as follows:

2.1. With regard to non-life insurers in Vietnam

- Group 1: non-life insurers that ensure the solvency and earn profits from insurance business other than reinsurance for 02 consecutive years, including:

+ Group 1A: non-life insurers that ensure the solvency and earn profits from the insurance business other than reinsurance for 02 consecutive years; the total score of all criteria is over 700 and all groups of criteria are ranked A.

+ Group 1B: Non-life insurers that ensure the solvency and earn profits from insurance business other than reinsurance business for 02 consecutive years; the total score of groups of criteria is below 700.

- Group 2: non-life insurers that ensure the solvency and fail to earn profits from the insurance business other than reinsurance business for 02 consecutive years, including:

+ Group 2A: non-life insurers that ensure solvency and fail to earn profits from the insurance business other than reinsurance business for 02 consecutive years, the total score of all criteria is over 700 and all groups of criteria are ranked A.

+ Group 2B: non-life insurers that ensure the solvency and fail to earn profits from the insurance business other than reinsurance business for 02 consecutive years, the total score of all criteria is under 700.

- Group 3: non-life insurers at risk of insolvency, including non-life insurers whose solvency margin ratios are insufficient or the provision fail to meet the criteria prescribed in Appendix 1 issued together with this Circular.

- Group 4: non-life insurers that go insolvent and are put under the special control, including non-life insurers in group 3, and fail to regain the solvency as requirements of the Ministry of Finance.

2.2 With regard to life insurers in Vietnam

- Group 1: life insurers that ensure the solvency, including:

+ Group 1A: life insurers that ensure the solvency, the total score of all criteria is over 850 and all groups of criteria are ranked A.

+ Group 1B: life insurers that ensure the solvency, the total score of all criteria from 650 to below 850, have at least 01 group of criteria ranked B and none of them ranked C or D.

+ Group 1C: life insurers that ensure the solvency, the total score of all criteria from 400 to below 650, have at least 01 group ranked C and none of them ranked D.

+ Group 1D: life insurers that ensure the solvency are not classified into group 1A, 1B or 1C.

- Group 2: life insurers that are not classified into group 2 prescribed in point a (iii) Clause 5 Section III Decision No. 1826/ QĐ-TTg.

- Group 3: life insurers that are at risk of insolvency, including life insurers whose solvency margin ratios are insufficient or the provision fails to meet the criteria prescribed in Appendix 1 issued together with this Circular. 

- Group 4: life insurers that are at risk of insolvency are put under the special control, including life insurers ranked in group 3 and fail to regain the solvency as requirements of the Ministry of Finance.

Thanh Rin

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