Scope of business in the insurance brokerage sector in Vietnam

Scope of business in the insurance brokerage sector in Vietnam
Lê Trương Quốc Đạt

What is the scope of business in the insurance brokerage sector in Vietnam? - Quynh Chau (Kien Giang)

Scope of business in the insurance brokerage sector in Vietnam

Scope of business in the insurance brokerage sector 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

Scope of business in the insurance brokerage sector according to Article 131 of the Law on Insurance Business 2022 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. Application for business licenses or permits of insurance brokerage companies in Vietnam

According to Clause 1, Article 134 of the Law on Insurance Business 2022, 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.

3. Rights and obligations of insurance brokerage companies in Vietnam

Rights and obligations of insurance brokerage companies according to Article 137 of the Law on Insurance Business 2022 are as follows:

* Insurance brokerage companies shall have the following rights:

- Receive root insurance brokerage commissions, reinsurance brokerage commissions in accordance with the regulations of the Minister of Finance;

- Gain proceeds from provision of insurance ancillary services;

- Gain proceeds from other activities related to insurance contracts that are requested by policyholders;

- Reserve other rights prescribed by law.

* Insurance brokerage companies shall take on the following rights:

- Ensure privacy and security for information provided by clients, insurance companies, reinsurance companies and foreign branches in Vietnam, except as requested by the competent regulatory authority or agreed by clients, insurance companies, reinsurance companies and foreign branches in Vietnam;

- Pay clients compensation for any loss or damage caused during the process of rendering insurance brokerage services;

- Disclose pieces of information authorized by the Minister of Finance to clients;

- Separately account for and track collections or payments authorized by insurance companies, reinsurance companies or foreign branches in Vietnam;

- Purchase professional liability insurance plans tailored for insurance brokerage services;

- Assume other obligations prescribed in law.

* Insurance brokerage companies shall be prohibited from performing the following acts:

- Prevent policyholders or insured persons from providing information related to insurance contracts or incite policyholders or insured persons not to give details about insurance contracts;

- Do promotion in the form of promises to provide illegal benefits to incite clients to enter into insurance contracts;

- Incite policyholders to nullify insurance contracts remaining in effect to purchase new insurance contracts;

- Recommend clients to buy insurance bound by less competitive requirements, terms and conditions at insurance companies or branches of foreign non-life insurance companies than those at others in order to earn higher insurance brokerage commission;

- Provide clients with false information or information irrelevant to insurance requirements, terms and conditions imposed by insurance companies or branches of foreign non-life insurance companies.

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