Decree No. 73/2016/ND-CP on the details of the implementation of the Law on Insurance Business and amendments to certain articles of the Law on Insurance Business

On 1 July 2016, the Government issued Decree 73/2016/ND-CP on the details of the implementation of the Law on Insurance Business and amendments to certain articles of the Law on Insurance Business. The new Decree took effect from 1 July 2016, and replaced Decree 45/2007/ND-CP dated 27 March 2007, Decree 123/2011/ND-CP dated 28 December 2011, Decree 68/2014/ND-CP dated 9 July 2014 and Decree 46/2007/ND-CP dated 27 March 2007. The notable changes introduced by Decree 73 are summarised as follows:

New requirements for licensing for insurance enterprises, foreign branches and insurance broker enterprises

  • Capital contributions must be in form of cash and it is not permissible to use capital from borrowings, or the investment trust funds of other organisations or individuals for capital contributions
  • Investors that are organisations contributing 10% or more of the charter capital are required to have conducted a profitable business for three (3) consecutive years before the year of licence submission and to have not incurred cumulative losses prior to the submission of the licence application
  • Investors that are organisations contributing the charter capital and operating in sectors that require a legal capital must undertake that their owners’ equity less the minimum legal capital is at least equal to the amount of capital to be contributed
  • Vietnamese corporate investors contributing capital in an insurance limited company must operate in Finance, Banking and Insurance sector and must have total assets of at least VND2,000 billion
  • Where an insurance joint stock company is established, there must be at least two founding shareholders being organisations, together holding at least 20% of the shares in the incorporated company, and the founding shareholders must hold at least 50% of the shares for three years from the licence date
  • New conditions for non-life foreign insurers to set up a foreign branch in Vietnam are stipulated in Decree 73
  • For an insurance company applying for implementation of pension insurance, unit-link insurance or universal life insurance, certain conditions are applied, including requirements for solvency margin and voluntary pension funds.

For more information, click PwCVietnam NewsBrief_Decree 73 on insurance_EN and PwCVietnam NewsBrief_Decree 73 on insurance_VN


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