Conditions of insurance business

Insurance business is an activity of an insurance enterprise for profit purposes, whereby the insurer accepts the risk of the insured, on the basis that the insurance buyer pays the insurance premium for the giấy phép công bố mua bán trang thiết bi y tế insurance enterprise to pay. pay insurance to the beneficiary or indemnify the insured upon occurrence of the insured event. According to current regulations, insurance business belongs to conditional business lines. Therefore, the following article of Toan Long Law will advise on regulations related to insurance business conditions.

What is the business experience?

According to current regulations, organizations and enterprises that want to do insurance business must have an establishment and operation license of an insurance enterprise, foreign branch or insurance brokerage enterprise. Conditions for issuance of establishment and operation licenses of insurance enterprises, foreign branches and insurance brokerage enterprises are as follows:

1. For organizations and individuals contributing capital:  Organizations and individuals contributing capital to establish an insurance enterprise or an insurance brokerage enterprise must satisfy the following conditions:

a) Organizations and individuals participating in capital contribution must contribute capital in cash and may not use borrowed capital or investment trust capital of other organizations and individuals to contribute capital;

b) Organizations contributing 10% or more of the charter capital must have profitable business operations for 03 consecutive years preceding the year in which the application for license is submitted;

c) Organizations participating in capital contribution operating in business lines requiring legal capital must ensure that their equity minus legal capital is at least equal to the expected capital contribution;

d) In case the organizations participating in capital contribution are insurance enterprises, insurance brokerage enterprises, commercial banks, finance companies, securities companies, these organizations must ensure to maintain and satisfy financial safety conditions and being approved by competent authorities to contribute capital in accordance with specialized laws.

2. Conditions for establishing an insurance limited liability company:

a) For foreign organizations:

– Being a foreign insurance enterprise licensed by a foreign competent authority to conduct business in the field it intends to conduct in Vietnam or a subsidiary specialized in performing the function of outward investment of the enterprise. a foreign insurance company authorized by a foreign insurance enterprise to contribute capital to establish an insurance enterprise in Vietnam;

– Having at least 7 years of experience in the field to be conducted in Vietnam;

– Having total assets of at least USD 2 billion in the year immediately preceding the year of submitting the application for a license;

– No serious violations of the law on insurance business activities of the country where the enterprise’s head office is located within 03 consecutive years preceding the year in which the application for a license is submitted.

b) For Vietnamese organizations: Having total assets of at least VND 2,000 billion in the year immediately preceding the year in which the application for a License is submitted.

3. Conditions for establishing an insurance joint-stock company: There are at least 02 founding shareholders who are organizations and these two shareholders must jointly own at least 20% of the shares of the expected insurance joint-stock company. established.

4. Conditions for establishing a foreign branch:

a) Being a foreign insurance enterprise licensed by a foreign competent authority to conduct business in the field it intends to conduct in Vietnam or a subsidiary specialized in performing the function of outward investment of the enterprise; foreign insurance enterprises authorized by foreign insurance enterprises to contribute capital to establish insurance enterprises in Vietnam;

b) Having at least 7 years of experience in the field to be carried out in Vietnam;

c) Have total assets of at least 02 billion USD in the year immediately preceding the year in which the application for a license is submitted;

d) No serious violations of the law on insurance business activities of the country where the enterprise is headquartered within 03 consecutive years preceding the year in which the application for a license is submitted.

dd) Having its head office in a country where Vietnam and that country have signed international treaties on trade, including an agreement on the establishment of a branch of a foreign non-life insurance enterprise in Vietnam. ;

e) The foreign insurance regulatory agency where the foreign non-life insurance enterprise’s head office is located has signed a Memorandum of Understanding on cooperation with the Ministry of Finance of Vietnam on management and supervision of operations. of the foreign branch;

g) There is a written commitment to take responsibility for all obligations and commitments of the branch in Vietnam;

h) The source of capital for the establishment of a foreign branch must be a lawful source and must not use borrowed money or investment trust in any form;

i) Having made a profit for 03 consecutive years preceding the year of submitting the application for a license and having no accumulated loss up to the time of submitting the application for a license.

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