What is insurance agent? Eligibility requirements for insurance agents in Vietnam

What is insurance agent? Eligibility requirements for insurance agents in Vietnam (Internet image)

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

1. What is insurance agent?

According to Article 124 of the Law on Insurance Business 2022, insurance agent is an entity or person authorized under an insurance agent agreement to render insurance agent services by an insurance company, branch of a non-life insurance company or mutual providing microinsurance products.

2. Eligibility requirements for insurance agents in Vietnam

According to Article 62 of Decree 46/2023/ND-CP, eligibility requirements for insurance agents in Vietnam include:

- An insurance agent must satisfy the requirements specified in Clause 2, Article 125 of the Law on Insurance Business 2022, and the following requirements:

+ Be licensed or permitted for their establishment and operation in Vietnam;

+ Obtain registration for their scope of insurance agent services under the regulatory provisions of the Corporate Law. As for any entity engaged in conditional business sectors and industries, a license, certificate and other approval or certification document (if any) containing information about permission for insurance agent services that is issued by a competent agency shall be needed;

+ Be staffed by employees directly rendering insurance agent services that meet the conditions specified in clause 1 of Article 125 of the Law on Insurance Business 2022;

+ Meet personnel and other conditions under the Government’s regulations.

- Other conditions:

(1) Insurance agents being credit institutions and foreign bank branches:

+ A specialized department must be established to carry out insurance agent activities;

+ The head of the department specialized in performing insurance agent activities must have at least 3 years of working experience in finance, banking, or insurance, and have at least a bachelor’s degree in insurance.

If he/she fails to have at least a bachelor’s degree in insurance, he/she must have at least a bachelor’s degree in other major and an insurance certificate according to regulations of the Ministry of Finance;

+ Each branch of a credit institution that conducts insurance agent activities must have at least 3 employees who are trained and have insurance agent certificates suitable to the type of insurance that the credit institution acts as an agent.

Each transaction office of a credit institution that conducts insurance agent activities must have at least one employee who is trained and has an insurance agent certificate suitable to the type of insurance that the credit institution acts as an agent;

+ Have an appropriate information technology system which provides complete, accurate and up-to-date information related to insurance policies through insurance agents;

+ There is a process to supervise and control the quality of the performance of insurance agent activities by the employees in the agent.

The quality control and supervision process must ensure that the agent’s staff who directly perform agent activities strictly comply with the principles of agent operation and the authorization details in the agent contract and relevant laws; insurers and foreign branches in Vietnam are enabled to inspect and supervise performance of the agent’s staff and their violations.

+ Each branch, transaction office of the credit institution or foreign bank branch must set up a separate transaction counter (or separate transaction desk) to carry out insurance agent activities, separate from transaction areas of the credit institution or foreign bank branch.

(2) Insurance agents being other organizations:

+ The organization must have at least three employees who directly perform insurance agent activities;

+ There is a process in place to supervise if their employees comply with the principles of insurance agent activities in accordance with the Law on Insurance Business.

(3) An insurance agent must maintain their compliance with the requirements for insurance agent operation throughout their operation.

In case one of the requirements is not satisfied, such organization may not conduct insurance agent activities until all the requirements are satisfied and must notify the insurer, or branch of foreign non-life insurer, or mutual providing microinsurance products within 5 working days from the date of their failure to meet the requirements for insurance agent activities.

After 6 months from the date of notification, if such organization still fails to satisfy the requirements for operating insurance agent as prescribed, the insurer, or branch of foreign non-life insurer, or mutual providing microinsurance products must terminate the insurance agent contract.

(4) An organization which has engaged in insurance agent activities must satisfy the requirements in Clauses 1 and 2 of Article 62 of Decree 46/2023/ND-CP within 1 year from the effective date of Decree 46/2023/ND-CP.

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