On June 16th, 2022, The National Assembly issued Law on Isurance Business No. 08/2022/QH15, whereby, there are some new notable following contents:
+ Insurers company shall not be allowed to conduct real estate business, this shall takes effect from January 1st, 2028, details are as follows:
Insurance companies, reinsurance companies and foreign branches in Vietnam shall not be allowed to make the following forms of investment:
- Investment in real estate business, except in the following cases: purchasing stocks of real estate businesses listed on the securities market, fund certificates of public funds; purchasing, investing in or owning real property used as business offices, locations or treasure vaults for direct uses for their insurance business; leasing out unoccupied business establishments under their control or management; seizing real property by managing or disposing of mortgage bonds, or recovering loans secured by real property within 03 years from the lien date;
- Investment in intangible fixed assets, except those used for commercial and business purposes of insurance companies or branches.
+ Abolishing the Fund for protection of insured persons
Law on Isurance Business 2022 will no longer regulate the Fund for protection of insured persons and only prescribe reserve funds as below:
- Insurance companies, reinsurance companies or foreign branches in Vietnam must establish compulsory reserve funds to supplement equity and ensure conformance to solvency requirements.
- Each year, a compulsory reserve fund shall receive 05% of total after-tax profit set aside until it meets the maximum limit prescribed in the Government’s regulations.
Disposal and management of the remaining Fund for protection of insured persons shall be carried out as follows: All balance existing in the Fund for protection of insured persons shall be in the custody of the Ministry of Finance to serve the purposes of protecting insured persons’ interests when insurance companies are declared insolvent or bankrupt; The Government shall impose detailed regulations on management and use of balance of the Fund for protection of insured persons.
This law shall take effect from January 1st, 2023.
