Legal grounds

• Insurance Business Law 2000;
• Insurance Business Law amended in 2010;
• Decree No. 73/2016/ND-CP Detailing the implementation of the law on insurance business and the law amending and supplementing a number of articles of the Law on insurance business.

Conditions for issuance of License to establish and operate insurance business

Enterprises that meet the following conditions will be granted a License to establish and operate insurance business:

1. Have a contributed charter capital not lower than the legal capital according to the Government's regulations;

• For foreign organizations: Have minimum total assets equivalent to 02 billion US dollars in the year immediately preceding the year of submitting the license application;
• For Vietnamese organizations: Have total assets of at least 2,000 billion VND in the year immediately preceding the year of submitting the license application.

1. Have an application file for an establishment and operation license in accordance with the law;

The application for an establishment and operation license includes:

• Application for establishment and operation license;
• Draft corporate charter;
• Operational plan for the first five years, clearly stating the method of setting up professional reserves, reinsurance program, capital investment, business efficiency, solvency of insurance enterprises and economic benefits of establishing a business;
• List, curriculum vitae, and diplomas proving the capacity, professional qualifications and skills of business administrators and executives;
• Capital contribution level and capital contribution method, list of organizations and individuals accounting for 10% or more of charter capital; financial situation and other information related to those organizations and individuals;
• Rules, terms, fee schedule, insurance commissions of the type of insurance product expected to be implemented.

1. Have an enterprise type and charter consistent with the provisions of this Law and other provisions of law;
2. Administrators and operators have management capacity, expertise, and insurance operations.

Organizations and individuals contributing capital to establish an insurance enterprise must meet the following conditions:

• Not belonging to the prohibited subjects as prescribed in Clause 2, Article 18 of the Enterprise Law;
• Organizations and individuals participating in capital contribution must contribute capital in cash and are not allowed to use loan capital or investment trust capital of other organizations or individuals to contribute capital;
• Organizations contributing capital of 10% or more of charter capital must operate profitable business for 03 years immediately preceding the year of submitting the application for License and have no accumulated losses up to the time of submitting the application. licensing;
• Organizations participating in capital contribution operating in business lines that require legal capital must ensure that the owner's capital minus the legal capital is at least equal to the expected capital contribution;
• In case the organization contributing capital is an insurance enterprise, insurance brokerage enterprise, commercial bank, financial company, or securities company, these organizations must ensure to maintain and meet the following conditions: financial safety conditions and approval by competent authorities to contribute capital according to specialized legal regulations.

Procedures for applying for a license to establish and operate insurance business

Enterprises that meet the above conditions submit 03 sets of application documents for the License to establish and operate insurance business to the Ministry of Finance.

Within 21 working days from the date of receipt of the license application dossier, if the dossier is not complete and valid, the Ministry of Finance shall notify in writing a request to supplement or amend the dossier. The maximum time limit for supplementing and amending the investor's documents is 06 months from the date of notification. In case the investor does not supplement or amend the dossier within the prescribed time limit, the Ministry of Finance will issue a written refusal to consider granting the License.

Within 60 days from the date of receipt of complete and valid documents, the Ministry of Finance shall issue a License to the insurance enterprise.

In case of refusal to issue a License, the Ministry of Finance shall issue a document clearly explaining the reason. The Ministry of Finance can only refuse to grant a License when the organization or individual contributing capital or the insurance enterprise expected to be established does not meet the conditions for granting a License as prescribed.

Note:The establishment and operation license is also the business registration certificate.

Procedures after being granted the License for establishment and operation

After being granted an establishment and operation license, an insurance enterprise must carry out the following procedures:

1. Within 30 days from the date of issuance of the License, insurance enterprises, foreign branches, and insurance broker enterprises must publish daily in 05 consecutive issues the following main contents:

• Name and address of head office, branch, representative office of the insurance enterprise or insurance brokerage enterprise; name and address of the foreign branch;
• Content, scope and duration of activities;
• Charter capital level and contributed charter capital of insurance enterprises and insurance brokerage enterprises; allocated capital of foreign branches;
• Full name of the legal representative of the insurance enterprise, foreign branch, or insurance broker enterprise;
• License number and date of issue;
• Insurance operations and insurance brokerage operations are allowed to do business.

1. Within 60 days from the date of issuance of the License, insurance enterprises and foreign branches must use a part of the contributed charter capital or allocated capital as a deposit at a commercial bank operating in Vietnam. . The deposit level is equal to 2% of legal capital.
2. Within 12 months from the date of issuance of the License, insurance enterprises, foreign branches, and insurance broker enterprises must complete the following procedures to officially operate:

• Convert the capital deposited in the blocked account into charter capital (or allocated capital);
• Register seal sample, register tax code, open transaction account at bank according to law;
• Establishing infrastructure systems, equipment, and information technology software to meet the requirements of corporate governance and state management of insurance business activities;
• Carry out procedures to request the Ministry of Finance to approve the method of setting up professional reserves, approve and register insurance products (for insurance enterprises and foreign branches), and approve management positions. management, administration;
• Issue procedures for exploitation, appraisal, compensation, internal control, financial and investment management, and reinsurance program management (for insurance enterprises and foreign branches).

Note:If within 12 months from the date of issuance of the License, the insurance enterprise, foreign branch, or insurance broker enterprise does not complete the procedures specified in Clause 3 of this Article to begin operations, the Ministry Finance will revoke the issued License.