Vietnam: New Insurance Business Law

In brief

The National Assembly of Vietnam has passed the new Insurance Business Law ("New Law") on 16 June 2022 at the meeting of the National Assembly. The New Law has provided significant changes to the Current Law1 and will have a major impact on the development of Vietnam's insurance market.

The New law will come into effect from 1 January 2023, except for certain provisions on risk-based capital and intervention measures that will take effect from 1 January 2028.


Key takeaways

The New Law has provided various significant changes, with the following highlights:

  • The applicable scope of the New Law is clearer than that of the Current Law.
  • There will be certain changes to the scope of compulsory insurance products: The New Law has removed certain insurances on professional liabilities in the legal advisory profession and the insurance brokerage profession. The New Law does not allow insurers to deny selling compulsory insurances upon requests of policyholders who are qualified to purchase compulsory insurances.
  • On insurance policies, the fundamental principles (such as: utmost good faith, insurable interest, indemnity, subrogation) are more clearly provided in the New Law. These principles are already in place in Vietnam practice, but they have not yet specified clearly in the Current Law as fundamental principles.
  • There is a new provision on temporary life insurance, allowing the insurer to provide temporary insurance to a policyholder when the insurer has received an insurance application and the policyholder has paid the estimated insurance premium.
  • There is a new proposed change to the operation of the insurers (i.e., provision of insurance auxiliary services and other activities directly related to the insurance business) and the New Law expands the cases where an insurer is allowed to concurrently sell different insurance products.
  • The New Law recognizes the investment from a financial and insurance group, of which the investor may not be an insurer but in the group has an entity doing insurance business.
  • This will be the first time a regulation on insurance business provides specific regulations and restrictions on outsourcing activities in the insurance sector.
  • It will provide a mechanism for insurers to sell insurance via online channels.
  • New proposed changes applicable to the insurance agency activities will (i) set out provisions on the principles in the operation of insurance agencies, rights and obligations of parties in the insurance agency operation which are currently provided in the decree level, (ii) separate types of insurance agency certificates corresponding to each insurance product, and (iii) insurance agency certificate issued before the effective date of the new law which will continue taking effective until 31 December 2025.
  • Capital adequacy ratio will be based on the actual capital and the risk-based capital.
  • The New Law contains principles on technical reserves of insurers and/or reinsurers.
  • There are other changes, such as foreign ownership cap, the time to apply provisions on management of risk, capital and solvency, information disclosure by insurers and on a dispute resolution body.

Click here to access full alert.

1 Law No. Law No. 24/2000/QH10 on Insurance Business passed by the National Assembly on 9 December 2000, as amended and supplemented by Law No. 61/2010/QH12 on amendment and supplement of a number of articles of the Law on Insurance Business passed by the National Assembly on 24 November 2010 and Law No. 42/2019/QH14 on amending and supplementing a number of articles of the Law on Insurance Business and the Law on Intellectual Property ("Current Law").


Copyright © 2023 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.