Application for a license to establish a foreign insurance branch in 2021

DangKhoi September 2, 2021

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In the near future, the value of assets, especially human life, will increase. So Insurance will attract more users who want to protect their assets. That also attracts foreign insurers to expand their business networks to Vietnam to invest. One of the forms of such activities is the establishment of a foreign insurance branch. So what is the application for a license to establish a foreign insurance branch in 2021? So Let us find out in this article with LSX Law firm.

Form of operation of foreign enterprises in Vietnam

Foreign Insurers, brokers insurers can operate in Vietnam in the following forms:

Company limited liability insurance, limited liability insurance brokerage company;
Branches of foreign non-life insurance enterprises.

What is a foreign branch?

According to the provisions of law, a foreign branch is a dependent unit of a foreign non-life insurance enterprise. So it has no legal status, and the foreign non-life insurance enterprise has to be responsible for all the obligations and commitments of the branch in Vietnam.

Thus, a branch of a foreign insurance enterprise is a dependent unit of that enterprise. This unit has no legal status, so it is not able to raise capital and carry out transactions and insurance contracts with customers. All activities of the branch including the obligations and commitments the branch performs will be legally responsible by the insurance company.

Application for a license to establish a foreign insurance branch in 2021

The dossier for the application for a license to establish a foreign insurance branch in 2021 includes:

An application form for a license, made according to the form prescribed by the Ministry of Finance.
The draft of the Regulation on the organization and operation of the foreign branch approved by the foreign non-life insurance enterprise.
The operation plan for the first 5 years is suitable to the business field for which the license is requested, clearly stating the method of setting up professional reserves, reinsurance program, capital investment, business efficiency, ability payment of foreign branches.
Copy of citizen identification card, identity card, passport, or other lawful personal identification; criminal record, curriculum vitae, copies of diplomas and certificates of the future director, reserve and solvency actuary, chief accountant of the foreign branch.

Documents about the foreign non-life insurance enterprise:

A copy of the establishment decision, business registration certificate, or other equivalent documents, certified by the agency where the foreign non-life insurance enterprise has registered. Registered no more than 03 months before the date of submission of application for license;
Company rules;
Document of the competent authority of the foreign non-life insurance enterprise deciding on the establishment of a branch in Vietnam;
Authorization letter, copy of citizen identification card, people’s identity card, passport, or other lawful personal identification of the authorized representative of the foreign non-life insurance enterprise;
Audited financial statements for 03 consecutive years preceding the year of submission of application for a license.

Frequently Asked Questions

So can a foreign branch establish another branch?

The answer is no. According to the provisions of law, foreign branches can’t establish affiliated branches in Vietnam.

So what is the allocated capital of the foreign branch?

Granted capital of a foreign branch is the amount the foreign non-life insurance enterprise grants to a branch in Vietnam.

So what is the scope of operation of the foreign branch?

A foreign branch may only trade in insurance products and services that the foreign non-life insurance enterprise is allowed to do business in according to the regulations of the country where the enterprise is headquartered.

When submitting the application for an establishment license, do I need documents to prove that the enterprise opening a branch is eligible?

The answer is no. When submitting the application for an establishment license, it is not necessary to show that the enterprise opening a branch is eligible, but you only need to submit a written commitment of the foreign non-life insurance enterprise that meets the requirements.