Minimum charter capital of insurers in Vietnam

Minimum charter capital of insurers in Vietnam
Lê Trương Quốc Đạt

What are the regulations on the minimum charter capital of insurers in Vietnam? - Van Thanh (Hau Giang)

Minimum charter capital of insurers in Vietnam
Minimum charter capital of insurers in Vietnam (Internet image)

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

1. Minimum charter capital of insurers in Vietnam

The minimum charter capital of insurers according to Article 35 of Decree 46/2023/ND-CP is as follows:

- Minimum charter capital of life insurers:

+ Life insurance business (except unit-linked insurance, retirement insurance) and health insurance: VND 750 billion;

+ Insurance business as prescribed at Point a of Clause 1 of Article 35 of Decree 46/2023/ND-CP and unit-linked insurance or retirement insurance:  VND 1,000 billion;

+ Insurance business as prescribed at Point a of Clause 1 of Article 35 of Decree 46/2023/ND-CP, unit-linked insurance, or retirement insurance:  VND 1,300 billion.

- Minimum charter capital of non-life insurers:

+ Non-life insurance business (except aviation insurance, satellite insurance) and health insurance: VND 400 billion;

+ Insurance business as prescribed at Point a of Clause 1 of Article 35 of Decree 46/2023/ND-CP and aviation insurance and satellite insurance: VND 450 billion;

+ Insurance business as prescribed at Point a of this Clause, aviation insurance and satellite insurance: VND 500 billion.

- Minimum charter capital of health insurers: VND 400 billion.

- Minimum charter capital of reinsurers:

+ Reinsurance business, non-life reinsurance, or both non-life reinsurance and health reinsurance: VND 500 billion;

+ Reinsurance business, life reinsurance, or both life reinsurance and health reinsurance: VND 900 billion;

+ Reinsurance business, all life reinsurance, non-life insurance, and health reinsurance: VND 1,400 billion.

- If insurers and reinsurers which are established, organized, and operating before July 1, 2023 have a charter capital lower than the minimum charter capital specified Article 35 of Decree 46/2023/ND-CP, they must, before January 1, 2028, top up their charter capital to the required minimum level and put down a deposit as prescribed.

2. Rights and obligations of insurers and foreign non-life insurers’ branches in Vietnam

Rights and obligations of insurers and foreign non-life insurers’ branches in Vietnam according to Article 20 of the Law on Insurance Business 2022 are as follows:

An insurer and foreign non-life insurer’s branch shall have the following rights:

+ Collect insurance premiums under contractual terms and conditions;

+ Request the policyholder to provide full and accurate information related to conclusion and execution of the insurance contract;

+ Revoke the insurance contract as per clause 2 of Article 22 or unilaterally terminate the insurance contract under Article 26 of the Law on Insurance Business 2022;

+ Reject payment of insurance claims or insurance if insurance claims fall outside of the limit of insured liability or fall within the scope of application of the disclaimer clause as provided in the insurance contract;

+ Request the policyholder to apply loss prevention and control measures under this Law and other regulatory provisions of relevant law;

+ Request the third party to repay the amount that the insurer or the foreign non-life insurer’s branch pay as indemnity or coverage to the insured in case of loss or damage to property; economic interests or contractual or lawful obligations; civil liability that the third party causes;

+ Other rights prescribed by law.

- An insurer and a foreign non-life insurer’s branch shall take on the following obligations:

+ Provide the policyholder with proposal and questionnaire related to insurable risks, subject matters insured, rules, terms and conditions of insurance;

+ Give the policyholder with clear and full explanations about insurance benefits, clauses on disclaimer of insured liability, rights and obligations of the policyholder when concluding the insurance contract;

+ Provide the policyholder with the proof of conclusion of the insurance contract prescribed in Article 18 herein;

+ Issue premium invoices to the policyholder as agreed upon in the insurance contract and stipulated in regulatory provisions of relevant law;

+ Pay indemnity and insurance in case of policy event that occurs;

+ Give written explanations as to why payment of any insurance claim or coverage is rejected;

+ Cooperate with the policyholder on settling third-party claims for compensation for any losses falling within the limit of insured liability in case of any policy event that occurs;

+ Store and retain insurance contract-related documents and records under law;

+ Ensure confidentiality and security for information provided by the policyholder or the insured, except as requested by competent regulatory authorities or agreed by the policyholder or the insured;

+ Other obligations prescribed by law.

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