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Vietnam to ban insurance companies from real estate investment

By Anh Minh   June 16, 2022 | 05:15 am PT
Vietnam to ban insurance companies from real estate investment
Residential buildings are seen in Ho Chi Minh City in February 2022. Photo by VnExpress/Quynh Tran
Insurance companies will not be allowed to invest in real estate starting Jan. 1, according to the latest changes in the insurance law that legislators have voted on.

These companies can, however, buy real estate for the purpose of establishing headquarters or offices to operate, or to rent the unused parts of their real estate, said the modified law that nearly 92.5 percent of National Assembly delegates voted in favor of Thursday morning.

Insurance companies can also trade real estate companies’ listed shares but the government will need to specify a limit in this activity to minimize risks, the law says.

These companies will not be allowed to use Vietnamese citizens’ insurance money to cover the losses or cash shortage of their foreign business, it adds.

The modified law also scraps a fund that was meant to protect insurance customers as the fund has never been used in its 12 years of existence.

The balance of the fund stands at VND1 trillion ($43 million) and will be used to protect insurance customers in the circumstance that their insurer go bankrupt.

SSI Research forecast revenues from insurance premiums could rise by 18 percent to VND256 trillion this year, driven by the recovery in demand and growing online insurance and collaboration with insurtech firms.

 
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