Requirements concerning application of information technology in the insurance industry in Vietnam

Requirements concerning application of information technology in the insurance industry in Vietnam (Image from the Internet)

1. Requirements concerning application of information technology in the insurance industry in Vietnam

According to Article 13 of the Law on on insurance business 2022, insurance companies, reinsurance companies, foreign branches in Vietnam and insurance brokerage companies shall, of their own accord, establish, maintain and operate information technology systems corresponding to the business scale and meeting the following minimum requirements:

- Information technology systems must be available for use to facilitate the management and control of risks that they may face and regulatory inspection or supervision by regulators;

2. Insurance industry database in Vietnam

Insurance industry database in Vietnam as stipulated in Article 11 of the Law on on insurance business 2022 includes the following:

- The State invests in building a database on insurance business activities. The Ministry of Finance is responsible for building, managing, and operating the database on insurance business activities to serve state management activities and protect the legitimate rights and interests of parties involved in insurance business activities.

- Insurance companies, reinsurers, foreign branches in Vietnam, insurance brokerage firms, auxiliary insurance service providers, and mutual organizations offering microinsurance are required to provide information about policyholders, insured persons, insured objects, insurance agents, and other related information to build the database on insurance business activities.

- The collection, use, storage, and provision of information in the database on insurance business activities must ensure confidentiality, information security, and comply with legal regulations on protecting private life, personal secrets, family secrets, and business secrets.

Government agencies, other organizations, and individuals must use the provided information for the correct purpose and are not allowed to provide it to third parties without the consent of the policyholder, insured person, except in cases provided by law.

- The database on insurance business activities is connected to national databases and other specialized databases.

3. Principles of conclusion and execution of insurance contracts in Vietnam

According to Article 16 of the Law on on insurance business 2022, the conclusion and implementation of insurance contracts must comply with the basic principles of civil law and the following principles:

- Absolute honesty principle: parties involved in an insurance contract must provide information and fulfill their rights and obligations most honestly, based on absolute mutual trust during the conclusion and implementation of the insurance contract;

- Insurable interest principle: the policyholder must have an insurable interest appropriate to each type of insurance contract as stipulated by the Law on on insurance business 2022;

- Indemnity principle: the compensation amount that the insured receives should not exceed the actual damage in the insurance event, except for otherwise agreed in the insurance contract;

- Subrogation principle: the insured has the responsibility to transfer to the insurer or foreign non-life insurer's branch the right to claim against third parties causing damage within the scope of the insurance compensation. This principle does not apply to life insurance contracts and health insurance contracts;

- Fortuitous risk principle: the risk covered by insurance must be unexpected and unforeseeable.

- The Government of Vietnam stipulates in detail the building, collection, use, storage, management, and provision of information to the database on insurance business activities and the connection of the insurance business activities database with national databases and other specialized databases.

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