Types of non-life insurance in Vietnam

Types of non-life insurance in Vietnam (Image from Internet)

1. Types of non-life insurance in Vietnam

The types of non-life insurance according to Article 4 of Decree 46/2023/ND-CP include:

- Property Insurance.

- Cargo Transportation Insurance.- Aviation Insurance.

- Motor Vehicle Insurance.

- Fire and Explosion Insurance.

- Hull and Civil Liability Insurance of Ship Owners

- Liability Insurance.

- Credit and Financial Risk Insurance.- Agricultural Insurance.

- Guarantee Insurance.

- Other Damage Insurance.

2. Qualifications required for Appointed Actuary of non-life insurers in Vietnam

The qualifications required for Appointed Actuary of non-life insurers, reinsurers, foreign branches in Vietnam according to Article 30 of Decree 46/2023/ND-CP are as follows:

- The general standards stipulated in Clause 1 Article 81 of the Insurance Business Law 2022.

- Be an Associate of the actuarial societies that are official members of the International Actuarial Association; or have at least 5 years of working experience in the field of non-life insurance and provide evidence of having passed at least 2 exams of one of the following societies: Institute and Faculty of Actuaries (UK), Society of Actuaries (USA), Institute of Actuaries of Australia, Canadian Institute of Actuaries, or equivalent exams as recognized by the aforementioned societies.

Three years after the effective date of Decree 46/2023/ND-CP, actuarial experts of non-life insurers, reinsurance enterprises, and foreign branches in Vietnam must at least be an Associate of one of the actuarial societies that are official members of the International Actuarial Association and must not violate the professional ethical rules of actuarial practice.

Five years after the effective date of Decree 46/2023/ND-CP, actuarial experts of non-life insurers, reinsurance enterprises, and foreign branches in Vietnam must be a Fellow who has received training in actuarial science in the field of non-life insurance from an actuarial society that is an official member of the International Actuarial Association and must not violate the professional ethical rules of actuarial practice.

- Must be an employee of the non-life insurer, reinsurance enterprise, or foreign branch in Vietnam.

- Must reside in Vietnam during their tenure.

- The regulations in Clauses 3 and 4 of Article 30 of Decree 46/2023/ND-CP will take effect one year after the effective date of Decree 46/2023/ND-CP.

3. Provisions on technical reserve for non-life insurance in Vietnam

The provisions on technical reserves for non-life insurance in Vietnam according to Article 38 of Decree 46/2023/ND-CP are as follows:

- Non-life insurance enterprises, reinsurance enterprises operating in non-life insurance, and foreign branches in Vietnam must set up technical reserves for each insurance operation or insurance contract corresponding to the committed liabilities as agreed in the insurance contract and must be certified by the enterprise's, branch's actuarial expert.

- Technical reserves include:

+ Unearned Premium Reserve: Used to cover liabilities that will arise during the remaining term of the insurance contract in the following year.

+ Claim Reserve: Used to pay for losses that have occurred but are yet to be claimed or have been claimed but not settled by the end of the financial year.

+ Catastrophe Reserve: Used to compensate for large fluctuations in losses or large losses that occur where the total premium income in the financial year, after establishing the Unearned Premium Reserve and Claim Reserve for unsettled claims, is insufficient to cover the compensation payments for the liabilities of the insurer, foreign branch in Vietnam.

- Non-life insurance enterprises, foreign branches in Vietnam, and reinsurance enterprises operating in non-life insurance are allowed to choose the methods for establishing technical reserves as guided in Article 39 of Decree 46/2023/ND-CP or other methods if they can substantiate that the results are more accurate and complete and propose such methods to the Ministry of Finance for approval as prescribed in Article 45 of Decree 46/2023/ND-CP before applying.

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