Vietnam: What are entities providing microinsurance products?

Vietnam: What are entities providing microinsurance products? (Internet image)

Regarding this issue, LawNet responded as follows:

1. What are entities providing microinsurance products?

According to Clause 1, Article 2 of Decree 21/2023/ND-CP, entities providing microinsurance products in Vietnam include:

- Non-life insurers, life insurers, health insurers (hereinafter referred to as “insurers”), and branches of foreign non-life insurers established and operating in Vietnam;

- Mutual microinsurance organizations established and operating in Vietnam.

2. Regulations on microinsurance products in Vietnam

Microinsurance products in Vietnam are regulated as follows:

(1) Microinsurance products provided by insurers and branches of foreign non-life insurers

- When launching their microinsurance products, insurers and branches of foreign non-life insurers shall be required to meet the requirements laid down in the Law on Insurance Business and its guiding documents, and the provisions of Article 3, Article 4 and Article 6 of Decree 21/2023/ND-CP.

- Life insurers may provide microinsurance products for protection against life and health risks with a maximum insurance term of 05 years.

- Non-life insurers and branches of foreign non-life insurers may provide:

= Microinsurance products for protection against life and health risks with a maximum insurance term of 01 year;

= Microinsurance products for protection against property risks with a maximum insurance term of 05 years.

- Health insurers may provide:

= Microinsurance products for protection against life risks with a maximum insurance term of 01 year;

= Microinsurance products for protection against health risks with a maximum insurance term of 05 years.

- Names of microinsurance products provided by insurers and branches of foreign non-life insurers must contain the phrase “Sản phẩm bảo hiểm vi mô” (“microinsurance product”) for distinguishing between their microinsurance products and other insurance products.

(2) Microinsurance products provided by mutual microinsurance organizations

Mutual microinsurance organizations may only provide microinsurance products with a maximum insurance term of 01 year to meet demands of their members. Such microinsurance products cover one or some of the following insurance benefits:

- Health care benefit: partial or entire costs of inpatient treatment and surgery will be covered when the insured is hospitalized or undergoes surgery within the scope of insurance cover.

- Accident insurance benefit: an amount will be paid in proportion to the severity level of injuries incurred by the insured as agreed upon in the microinsurance contract when the insured suffers injuries in an accident within the scope of insurance cover.

- Death or total permanent disability (TPD) insurance benefit: the beneficiary will receive a payout under terms and conditions of the microinsurance contract when the insured passes away or suffers TPD within the scope of insurance cover.

- Funeral expense benefit: an amount of funeral allowance will be paid under terms and conditions of the microinsurance contract upon payment of death benefit.

- Property insurance benefit: the insurance indemnity will be paid under terms and conditions of the microinsurance contract when the insured property damage occurs due to the causes within the scope of insurance cover.

(Articles 4 and 5 of Decree 21/2023/ND-CP)

Nguyen Thi Hoai Thuong

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