MOF proposes revising Law on Insurance Business

The Ministry of Finance (MOF) is seeking public feedback on draft amendments to the Law on Insurance Business, aiming to create a more coherent legal framework and promote sustainable growth in the sector.

According to the ministry, the 2022 Law on Insurance Business has supported market development, but over time, shortcomings have emerged that need addressing to simplify administrative procedures, remove obstacles and create better conditions for business growth.

Growth in the Vietnamese insurance market is showing signs of slowing. Key market indicators from 2022–25 increased by only about 10 percent, 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.

The ministry noted that amendments are also necessary to align the law with other recently updated legal documents, including the Law on Inspection and the Law on Handling of Administrative Violations, as some provisions of the current Law on Insurance Business are now inconsistent with these regulations.

Under the draft amendments, the MoF 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.

According to the MOF, 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.

By VNS/VLLF