Foreign insurance firms told to show a premium of $2 bln for a bite at Vietnam's market

By Dam Tuan   July 13, 2016 | 04:45 pm PT
Vietnam issues new legal regulation stipulating requirements for foreign insurance firms.

Vietnam’s government has recently issued a new decree stating that foreign insurance organizations must have at least $2 billion in assets to operate in the country.

The decree became effective on July 1, regulating conditions for insurance, reinsurance and insurance brokerage services in Vietnam, according to the government's online portal.

These firms must have a business license approved by the Ministry of Finance when it has been determined they have met the requirements regulated in the decree.

Besides general provisions, the decree stipulates the requirements for foreign insurance companies who wish to set up shop in Vietnam.

(i) Foreign insurance organizations and subsidiaries must have authorization from their registered countries to conduct business in Vietnam.

(ii) Having at least 10 years experience in the fields registered in Vietnam; total assets equivalent to at least $2 billion a year before they apply for a business license in Vietnam.

(iii) No serious legal violations in the insurance business in their countries of origin in the three years running up to their application for a license in Vietnam.

Vietnamese organization needs to meet only two requirements.

(i) Operating in the banking and finance sector.

(ii) Having total assets of at least VND2 trillion (nearly $90 million) the year before they apply for a business license.

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