In brief
On 1 July 2023, the Government officially issued the new Decree No. 46/2023/ND-CP for implementing a number of articles of the new Law on Insurance Business 20221 (“Decree No. 46“). Decree No. 46 takes effective from 1 July 2023 (except for certain clauses, which take effect from 1 January 2023) and replaces the previous Decree No. 73/2016.2
Among other things, Decree No. 46 provides detailed guidelines on the licensing requirements and process for participants in the insurance market, the operation of insurance agencies, insurance brokers and insurance ancillary service providers, and supplying cross-border services.
Key takeaways
Decree No. 46 provides a number of significant changes, some of which are highlighted below.
- Decree No. 46 provides detailed classifications of operational lines for each group of (i) life insurance, (ii) non-life insurance and (iii) health insurance.
- Foreign-invested companies can use insurance services provided from offshore providers on a cross-border basis. In this regard, Decree No. 46 expands the scope of target users by allowing foreign-invested companies regardless of their ratio of foreign investments, rather than limited to only those with more than 49% of foreign ownership under previous Decree No. 73/2016.
- Additional and stricter conditions have been imposed on organizational insurance agencies (including credit institutions and other types of organizations). These agencies must maintain all conditions during the entire term of the services provided to the insurers; otherwise, the relevant insurers would have the right to terminate the relevant insurance agency contracts. These agencies must satisfy the conditions above within one year from the effective date of Decree No. 46 (i.e., no later than 1 July 2024).
- Decree No. 46 sets out new thresholds regarding the minimum charter capital (legal capital) for each type of organization in the insurance sector. Insurers, reinsurers and insurance broking companies licensed before 1 January 2023 can retain their capital with the minimum charter capital required under the previous Decree No. 73/2016 and will have a transitional period. They will only be required to follow the new respective thresholds under Decree No. 46 from 1 January 2028.
- Decree No. 46 provides stricter requirements for the actuaries of insurers (for both life insurers and non-life insurers).
- Under Decree No. 46, the Ministry of Finance of Vietnam (MOF) will build and manage a database (“Database“) on insurance business for policy documents, analyses, forecasts and the supervision of insurance business activities. The Database will include different groups of information to be provided by insurers and the MOF, including information about insurers/reinsurers, information about policyholders and insured, information about agencies, information about certificates in the insurance sector and information about administrative sanctions in the insurance sector. This information must be provided to the Database from 1 January 2024.
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1 Law No. 08/2022/QH15 passed by the National Assembly on 16 June 2022 on Insurance Business (“Law on Insurance Business 2022“).
2 Decree No. 73/2016/ND-CP issued by the government on 1 July 2016 guiding the previous law on insurance business, as amended from time to time (“Decree No. 73/2016“).
