“Hello, Lawyer. It can be seen that in recent years Vietnam’s insurance market has become much more exciting. I wonder what can make the insurance market grow so fast. Factors What affects the insurance market? Hope to be answered by a lawyer. Thank you.“. Thanks for your question. To clarify this, today, LSX Lawfirm will give you an article about “What are the factors affecting Vietnam’s insurance market?“, as follows:
Legal grounds
- Insurance Business Law
What is insurance?
Insurance is an activity through which an individual entitled to an insurance benefit by virtue of a contribution made to himself or to a third person in the event of an accident. This allowance paid by an organization, which is responsible for all risks and compensates for losses according to statistical methods.
Types of insurance on the market
Compulsory insurance a type of insurance prescribed by law on insurance conditions, premium rates, and minimum insurance amounts that organizations and individuals participating in insurance and insurance enterprises obliged to perform.
Voluntary insurance is a type of insurance in which participants have the right to choose an insurance company, insurance product, premium rate, and insurance benefits.
Compulsory insurance includes: Civil liability insurance of motor vehicle owners, Civil liability insurance of air carriers for passengers; Professional liability insurance for legal consultancy activities; Professional liability insurance of insurance brokerage enterprises; Fire insurance; Compulsory medical insurance; Compulsory social insurance, the rest are voluntary insurance products.
In addition, on the market, there are many other types of insurance such as commercial and state, subject of insurance is human and property or civil liability…
Insurance products deployed or sold through insurance enterprises or agencies under the management of the State. For example, life insurance companies deploy life insurance products, and non-life insurance companies launch health insurance products, auto insurance, home insurance, and travel insurance products. …, the Vietnam Social Insurance Agency organizes and implements the regimes and policies of social insurance, unemployment insurance, and health insurance…
Legal regulations on insurance business activities
The insurance business is one of the conditional business lines under the provisions of the Investment Law 2020, specifically in Appendix IV, which List of conditional business lines with the following lines: Business Insurance business, Reinsurance business, Insurance brokerage, insurance ancillary activities, and Insurance agency. This regulation helps businesses operating in the insurance field comply with the law, and protect the legitimate rights and interests of the parties to the transaction.
Conditions of insurance business
In order to be able to establish and conduct insurance business, enterprises need to meet all the conditions for issuance of a License to establish and operate an insurance business.
According to the Law on Insurance Business and its accompanying guiding documents, an enterprise that granted a License for establishment and operation must satisfy the following conditions:
Firstly, Having a contributed charter capital not lower than the legal capital as prescribed by the Government;
Secondly, Have a dossier of applications for a license for establishment and operation in accordance with law;
Thirdly, Having the type of enterprise and its charter in accordance with the provisions of law;
Finally, The expected administrator and operator of an insurance enterprise or foreign branch must fully satisfy the conditions prescribed by law;
Organizations and individuals contributing capital to establish an insurance enterprise must have sufficient financial capacity and evidence to prove the lawful financial source when contributing capital to establish the enterprise;
Not belonging to the subjects banned under the provisions of Clause 2, Article 18 of the Enterprise Law 2014.
In addition, for each type of company, there will be some additional conditions.
Economic conditions are the basis for the development of the insurance market
Vietnam’s economy has grown strongly and continuously over the years, with GDP growth increasing, per capita income has always improved in recent years, and inflation has maintained at a low level. lower than 10%, people’s living standards are constantly improving… People started to accumulate and feel secure to use this accumulated money to invest back in the economy and life insurance one of them. Capital investment channels chosen by the people. These are very important factors and are the basis for the development of insurance in this period as well as in the following years.
Information technology has been applied to the insurance market
In the insurance field, the application of information technology has allowed insurers to computerize the service process, reduce the cumbersomeness of the insurance enterprise’s organizational structure, and diversify distribution channels. and service forms, enhancing customer service by high-tech ancillary services, etc.
In addition, the rapid development of information technology creates a new consumption habit for customers. Customers increasingly need to find out information through modern media such as the Internet, telephone, and email… are provided with general financial services such as insurance – investment – payment… Therefore, this is an opportunity for insurers to thoroughly apply the achievements of science and technology to meet the increasing and diverse needs of customers in the context of competition and integration.
Opening up and integrating the economy
Opening up and integrating is an inevitable trend for the development of any country in the world today. The participation in Vietnam’s life insurance market by large foreign insurers with strong financial potential and experience in the insurance business such as AIA, and Prudential…, has created a premise for the growth rapid development of Vietnam’s insurance market, promoting the development of the insurance market.
Opening up and integrating are also contributing to changes in the way of thinking and doing of Vietnamese people. Instead of relying on subsidies from the State, people must learn to take care of themselves and adopt the habit of participating in life insurance as a positive way of thinking and doing.
Legal environment and State policies on insurance business
Currently, the State and Government have paid more attention to encouraging the development of Vietnam’s insurance industry. The Government of Vietnam committed to building a fair and inclusive insurance business environment with reforms to the legal system. The system of legal documents in the insurance business is relatively complete according to international standards. The Ministry of Finance supervises insurance businesses in their business activities, from recruiting and training agents to the system of business monitoring indicators.
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Related article
- Regulations on insurance brokerage enterprises in Vietnam
- Procedures for setting up an insurance company in Vietnam
- Article 85 What are the highlights of Vietnam’s Law on Insurance Business?
Related questions
There are currently 3 types of insurance policies. Types of insurance policies include
+ Personal insurance contract;
+ Contract of property insurance;
+ Contract of civil liability insurance.
A dossier of the establishment of an insurance business enterprise includes: Application for business registration Company rules Members list; or company shareholders if it is a limited liability company with two or more members; or joint stock company. Copies of documents,…
According to the provisions of Clause 1, Article 26 of Decree 50/2016/ND-CP, if an enterprise fails to publish or publishes on time the prescribed contents of enterprise registration on the National Information Portal on enterprise registration, Registering an enterprise will be fined from VND 1,000,000 to VND 2,000,000.
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