I. General conditions for issuance of establishment and operation licenses of insurance enterprises and insurance brokerage enterprises

1. Subject conditions (Article 6 of Decree 73/2016/ND-CP is amended and supplemented by Point a, Clause 1, Article 11 of Decree 151/2018/ND-CP)

Organizations and individuals that contribute capital to establish an insurance enterprise or an insurance brokerage enterprise must satisfy the following conditions:

– Organizations and individuals participating in capital contribution must contribute capital in cash and must not use borrowed capital or investment trust capital of other organizations and individuals to contribute capital.

– Organizations contributing 10% or more of charter capital must have profitable business activities for 03 consecutive years preceding the year in which the application for license is submitted.

– 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.

– In case the organizations participating in capital contribution are insurance enterprises, insurance brokerage enterprises, commercial banks, financial companies, securities companies, these organizations must ensure to maintain and satisfy the following requirements: conditions of financial safety and being approved by a competent authority to contribute capital in accordance with specialized laws.

2. Legal capital requirements (Article 10 of Decree 73/2016/ND-CP)

2.1. Legal capital of non-life insurance enterprises

– Trading in non-life insurance and health insurance: VND 300 billion.

– Trading in non-life insurance and health insurance, aviation insurance or satellite insurance: VND 350 billion.

– Trading in non-life insurance and health insurance, aviation insurance and satellite insurance: VND 350 billion.

2.2. Level of legal capital of life insurance enterprises

– Life insurance business (except unit-linked insurance, retirement insurance) and health insurance: 600 billion VND.

– Trading in life insurance, health insurance and unit-linked insurance or retirement insurance: VND 800 billion.

– Trading in life insurance, health insurance, unit-linked insurance and retirement insurance: VND 1,000 billion.

2.3. Legal capital level of insurance brokerage enterprises

– Brokerage of original insurance or reinsurance: 4 billion Vietnam dong.

– Trading in original insurance and reinsurance brokerage: VND 8 billion.

II. Conditions and documents for establishment of an insurance enterprise

Insurance enterprise means an enterprise established, organized and operating under the provisions of this Law and other relevant provisions of law to conduct insurance and reinsurance business. (Clause 5, Article 3, Consolidated Document No. 06/VBHN-VPQH dated June 25, 2019 of the Office of the National Assembly on the Law on Insurance Business).

1. Establishment of an Insurance Joint Stock Company

1.1. Conditions for establishment (Clause 2, Article 7 of Decree 73/2016ND-CP as amended by Decree 151/2018/ND-CP)

– Must meet the general conditions mentioned in Section I.

– There are at least 02 organizational shareholders meeting the condition “having a total assets of at least VND 2,000 billion in the year preceding the year of submitting the application for a License, and these two shareholders must jointly own at least 20% of the shares of the insurance joint-stock company to be established”.

1.2. Dossier of establishment of a joint stock company (Article 12 of Decree 73/2016/ND-CP)

– A written request for a license, made according to the form prescribed by the Ministry of Finance.

– Draft the company’s charter as prescribed in Article 25 of the Law on Enterprises.

– Operation plan for the first 5 years suitable to the business field for which the license is requested, clearly stating the target market, distribution channel, method of setting up professional reserves, reinsurance program, investment capital investment, business efficiency, solvency of insurance enterprises.

– A copy of the citizen’s identity card, people’s identity card, passport or other lawful personal identification; criminal record, curriculum vitae, copies of diplomas and certificates of the person expected to be appointed as Chairman of the Board of Directors, General Director, actuary or backup actuary and solvency accountant, chief accountant of an insurance enterprise.

– List of founding shareholders and the following attached documents:

For individuals:

• Copy of citizen identification card, identity card, passport or other lawful personal identification; judicial record according to the form prescribed by law;
• Bank’s confirmation of the balance of VND or freely convertible foreign currency deposited at the bank.

For organizations:

• A copy of the establishment decision, business registration certificate or other equivalent document; for foreign organizations, the copy must be consularly legalized;
• Company rules;
• The document of the competent authority of the capital contributing organization deciding on the participation in capital contribution to establish the insurance enterprise;
• Power of attorney, copy of citizen’s identity card, people’s identity card, passport or other lawful personal identification of the authorized representative of the capital contributing organization;
• Audited financial statements for 03 consecutive years preceding the year of submission of application for license.

– Rules, terms and premium schedule of insurance products to be deployed.

– Confirmation of the bank licensed to operate in Vietnam about the level of charter capital deposited in the escrow account opened at the bank.

– Minutes of meeting of shareholders on:

• Agree to contribute capital to establish an insurance joint-stock company together with a list of founding shareholders;
• Approval of the draft of the company’s charter.

– Minutes on authorizing an individual or organization on behalf of the shareholders to be responsible for carrying out the procedures for applying for a License.

– A document from a competent state agency that the Vietnamese organization contributes capital to meet financial safety conditions and is allowed to contribute capital to establish an insurance enterprise in accordance with specialized laws.

– In case the foreign organization is an insurance enterprise, there must be a document from the competent authority of the country where the insurance enterprise is headquartered certifying:

• Foreign insurance enterprises are allowed to establish insurance enterprises in Vietnam. In case the regulations of the country where the enterprise is headquartered do not require written approval, there must be proof of this;
• The foreign insurance enterprise is operating in the field it intends to conduct operations in Vietnam;
• The foreign insurance enterprise is in a healthy financial position and fully meets the management requirements in the country where the enterprise is headquartered;
• No serious violations of regulations on insurance business activities of the country where the foreign organization is headquartered within 03 consecutive years preceding the year in which the application for a license is submitted.

– A written commitment of the shareholders to the satisfaction of the condition on “There are at least 02 shareholders who are organizations that meet the conditions with total assets of at least VND 2,000 billion in the year immediately preceding the year of submission. License application dossier and these two shareholders must jointly own at least 20% of the shares of the insurance joint-stock company to be established” in order to be granted a License.

III. Establishment of an insurance brokerage business

1. Concepts

Insurance brokerage activities are the provision of information and advice to the insurance buyers on insurance products, insurance conditions, premium rates, insurance enterprises and work related to the negotiation. , arrange and perform the insurance contract at the request of the insurance buyer. (Clause 4, Article 3, Consolidated Document No. 06/VBHN-VPQH dated June 25, 2019 of the Office of the National Assembly on the Law on Insurance Business).

2. Conditions for establishing an insurance brokerage business (Article 9 of Decree 73/2016/ND-CP as amended by Point e, Clause 1, Article 11 of Decree 151/2018/ND-CP)

– Vietnamese organizations and individuals contributing capital to establish an insurance brokerage enterprise must satisfy the general conditions mentioned in Part I.

– A foreign organization contributing capital to establish an insurance brokerage enterprise must satisfy the conditions specified in Section I and the following conditions:

• Being a foreign insurance brokerage enterprise licensed by a foreign competent authority to conduct insurance brokerage business in Vietnam;
• At least 7 years of experience in the insurance brokerage industry.
• No serious violations of the law on insurance brokerage 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.

3. Application for establishment of an insurance brokerage enterprise (Article 14 of Decree 73/2016/ND-CP)

– A written request for a license, made according to the form prescribed by the Ministry of Finance.

– Draft the company’s charter as prescribed in Article 25 of the Law on Enterprises.

– The first five-year operation plan suitable to the business field for which the license is requested, clearly stating capital investment activities and business efficiency of the establishment of an insurance brokerage business.

– A copy of the citizen’s identity card, people’s identity card, passport or other lawful personal identification; criminal record, curriculum vitae, copies of diplomas and certificates of the President of the Company or the Chairman of the Members’ Council or the Chairman of the Board of Directors, the General Director, the chief accountant of the insurance brokerage enterprise .

– List of founding shareholders (or members) or contributing 10% or more of charter capital and the following attached documents:

For individuals:

• Copy of citizen identification card, identity card, passport or other lawful personal identification; judicial record according to the form prescribed by law;
• Bank confirmation of the individual’s deposit balance in Vietnam Dong or freely convertible foreign currency deposited at the bank.

For organizations:

• A copy of the establishment decision, business registration certificate or other equivalent document; for organizations contributing foreign capital, a copy of the business registration certificate must be certified by the agency where such organization has registered no later than 03 months before the date of submission of the application file for a license;
• Company rules;
• Document of the competent authority of the capital contributing organization deciding on the participation in capital contribution to establish the insurance brokerage business in Vietnam;
• Power of attorney, copy of citizen’s identity card, people’s identity card, passport or other lawful personal identification of the authorized representative of the capital contributing organization;
• Audited financial statements for 03 consecutive years preceding the year of submitting the application for license;
• A document of a competent state agency on which a Vietnamese organization contributes capital to meet financial safety conditions and is permitted to contribute capital to establish an insurance brokerage business in accordance with specialized laws.

– Confirmation of the bank licensed to operate in Vietnam on the level of charter capital deposited in the escrow account opened at the bank.

– Cooperation contract as prescribed in Article 19 of the Law on Enterprises (in case a domestic organization and a foreign organization jointly contribute capital to establish a limited liability company with two or more members).

– Minutes of meetings of founding members or shareholders on:

• Agree to contribute capital to establish a limited liability company or an insurance brokerage joint-stock company together with a list of founding members or shareholders or contribute 10% or more of the charter capital;
• Approval of the draft of the company’s charter.

– Minutes of authorizing an organization or individual to contribute capital on behalf of founding shareholders or capital contributors to be responsible for carrying out the procedures for applying for a license.

– A document from the competent authority of the country where the insurance brokerage enterprise is located, certifying that:

• Foreign insurance brokerage enterprises are allowed to establish insurance brokerage enterprises in Vietnam. In case the regulations of the country where the enterprise is headquartered do not require written approval, there must be proof of this;
• Enterprises operating in the field of insurance brokerage;
• No serious violations of regulations on insurance brokerage business and other legal regulations of the country where the foreign organization is headquartered within 03 consecutive years preceding the year in which the application for a Certificate is submitted. permission.

– A written commitment of the organization or individual contributing capital to the satisfaction of conditions for licensing according to the content in Section III.1.

IV. Authority to issue establishment and operation licenses

Clause 1, Article 62 of the consolidated document No. 06/VBHN-VPQH stipulates the agency competent to issue insurance establishment and operation licenses as follows:

“The Ministry of Finance shall grant establishment and operation licenses to insurance enterprises in accordance with this Law and other relevant laws.”

V. Time for settlement (Article 65 Consolidated Document No. 06/VBHN-VPQH)

Within 60 days after receiving a complete application for an establishment and operation license, the Ministry of Finance must grant or refuse to grant a license. In case of refusal to grant a license, the Ministry of Finance must provide a written explanation of the reason.

VI. Implementation results (Article 65 Consolidated Document No. 06/VBHN-VPQH)

The result of the procedure for applying for an insurance establishment and operation license is an insurance establishment and operation license and also a business registration certificate.

VII. Procedures after an insurance enterprise or an insurance broker enterprise is granted a license for establishment and operation. (Article 16 Decree 73/2016/ND-CP)

1. Posting a statement on the establishment of an insurance enterprise or an insurance brokerage enterprise.

Within 30 days from the date of issuance of the License, the insurance enterprise, foreign branch and insurance brokerage business must publish daily in 05 consecutive issues of the newspaper with the following main contents:

– Name and address of the head office, branch and representative office of the insurance enterprise or insurance brokerage enterprise; name and address of the foreign branch;

– Content, scope and duration of activities;

– Level of charter capital and contributed charter capital of insurance enterprises and insurance brokerage enterprises; allocated capital of the foreign branch;

– Full name of the legal representative of the insurance enterprise, foreign branch or insurance brokerage enterprise;

– License number and date;

– Licensed insurance and insurance brokerage operations.

2. Make deposits at commercial banks operating in Vietnam.

Within 60 days from the date of issuance of the License, the insurance enterprise must use part of the contributed charter capital or the allocated capital to make a deposit at a commercial bank operating in Vietnam. The deposit level is equal to 2% of the legal capital specified in Section I.2

3. Complete the remaining procedures to officially go into operation.

Within 12 months from the date of issuance of the License, an insurance enterprise, foreign branch or insurance brokerage enterprise must complete the following procedures to officially operate:

– Convert the capital deposited in the escrow account into charter capital (or allocated capital);

– Register seal samples, register tax identification numbers, open transaction accounts at banks in accordance with the law;

– Carry out the procedures to request the Ministry of Finance to approve the method of setting up professional reserves, approve and register insurance products (for insurers and foreign branches), approve titles administration and administration;

– Promulgate procedures for exploitation, assessment, compensation, internal control, financial and investment management, reinsurance program management (for insurers and foreign branches).

If within 12 months from the date of issuance of the License, the insurance enterprise or insurance brokerage enterprise fails to complete these procedures in order to commence operation, the Ministry of Finance will revoke the License. grant.

Above is Khoa Tin‘s advice on procedures for setting up an insurance brokerage joint stock company in Vietnam.

In case customers have unclear issues or need to discuss further, please call us immediately at 0983.533.005 for a free consultation.

Best regards./.