Vietnam's insurance law Insurance Business Law 2022 has contributed a lot to promote the insurance market development in the country; however, the industry's growth is now showing signs of slowing, hence it is necessary to have a relook on the existing law.
According to Vietnam’s English news daily newspaper Vietnam News, over time the stakeholders have observed shortcomings and these need to be amended to simplify administrative procedures, remove difficulties and create conditions that are suitable for business development.
The news report said the ministry of finance is seeking public feedback on draft amendments to the 2022 law with an aim to create a more coherent legal framework and promote sustainable growth in the sector.
According to the ministry, the 2022 law has supported market development, but over time and with changing situations there is a need to address these issues to simplify administrative procedures, remove obstacles and create better conditions for business growth.
Key market indicators in the Vietnamese insurance market from 2022–2025 increased by only about 10%, highlighting the need for policies that encourage insurance enterprises to innovate and design products to meet the diverse needs of organisations and individuals across economic and social activities.
Under the draft amendments, the ministry proposes to cut, reduce and simplify conditions for licensing the establishment and operation of insurance enterprises; requirements before officially operating; standards for managers and controllers; overseas investment; insurance agency operations; licensing insurance brokerage enterprises; and conditions for providing insurance auxiliary services.
Administrative procedures for registering the principle of separating insurance equity capital and insurance premium sources for non-life insurance and reinsurance enterprises are also drafted for simplification.
The amendments stipulate that life insurance agents of a company cannot sell products from other life insurance companies, though they may sell non-life insurance and vice versa. The regulation also applies to non-life insurance companies, foreign branches, and micro-insurance agents.
The changes aim to remove obstacles for life and non-life insurance enterprises within the same corporation or parent company when organising agency networks, while ensuring transparency and consistency in law enforcement.
The Vietnam Insurance Association is promoting the development of a separate code of conduct for life insurance agency managers to maintain transparency and consistent market operations.