What conditions must a foreign reinsurance enterprise want to establish a branch in Vietnam? How long must a reinsurance enterprise branch officially operate after being granted a license to establish and operate? 

1. What conditions must a foreign reinsurance enterprise that wants to establish a branch in Vietnam meet?

Pursuant to Clause 1, Article 67 of the Law on Insurance Business 2022, when establishing a branch in Vietnam, a foreign reinsurance enterprise must meet the following conditions:

(1) Be headquartered in a country with which Vietnam and that country have signed the terms and conditions. international treaty, including an agreement on establishing a branch in Vietnam;

The state management agency for foreign insurance where the enterprise is headquartered has signed an international agreement with the Ministry of Finance of Vietnam on the management and supervision of branch operations;

(2) Permitted by the state management agency for foreign insurance where the enterprise is headquartered to establish a branch in Vietnam to operate Operating within the scope of insurance operations that the enterprise is permitted to do business;

(3) Have at least 07 years of experience in the field expected to be licensed in Vietnam;

(4) Have minimum total assets that meet the conditions specified in Point d, Clause 1 and Clause 3, Article 65 of the Law on Insurance Business 2022, specifically Can:

– Have total assets not less than 02 billion USD in the year immediately preceding the year of submitting the application for a license to establish and operate a branch;

– The Government specifies the minimum total assets appropriate for each period.

(5) Profitable business activities for the 03 most recent consecutive fiscal years up to date Application submission point and meet financial conditions according to Government regulations;

(6) Commitment to ensure and take responsibility for all obligations and commitments of the foreign branch in Vietnam.

2. How long must a branch of a foreign reinsurance enterprise officially operate after being granted a license for establishment and operation?

The official period of operation of a branch of a foreign reinsurance enterprise is specified in Clause 1, Article 73 of the 2022 Law on Insurance Business as follows:

Conditions before officially operating dynamic

1. Insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam must officially operate within 12 months from the date of issuance of the license for establishment and operation, except in the case of force majeure events or objective obstacles. In cases of force majeure or objective obstacles, insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam must report in writing and obtain written approval from the Ministry of Finance on the extension of official operating time; Maximum extension period is 12 months.

2. Insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam must meet the following regulations to officially operate:

a) Convert capital deposited in frozen accounts into charter capital or allocated capital;

b) Build organizational structure, management apparatus, internal control, internal audit, and risk management system in accordance with the form of operation according to regulations of the Government. This Law and other relevant legal provisions; elect and appoint legal representatives; elect and appoint positions that have been approved by the Ministry of Finance in principle as prescribed in Clause 2, Article 70 of this Law;

Thus, according to regulations, branches of foreign reinsurance enterprises must officially operate within 12 months from the date of issuance of the license to establish and operate, unless there is a force majeure event or objective obstacle.

Save Note:In case of force majeure or objective obstacles, the branch of a foreign reinsurance enterprise must report in writing and receive written approval from the Ministry of Finance on the extension of the official operating time;

The maximum extension period is 12 months.

3. Can a branch of a foreign reinsurance enterprise conduct insurance business before the official date of operation?

Conducting insurance business before the official date of operation is stipulated in Clause 4, Article 73 of the Law on Insurance Business 2022 as follows: mcm

Conditions before officially operating

…

dd) Having a headquarters, physical facilities, techniques, and technological systems in accordance with the professional process of insurance business insurance;

e) Announce the content of the establishment and operation license specified in Clause 2, Article 72 of this Law.

3. Insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam must notify the Ministry of Finance about meeting the regulations in Clause 2 of this Article at least 15 days before the official date of operation. The Ministry of Finance has the right to suspend the official operation of insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam when they have not met the regulations in Clause 2 of this Article.

4. Insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam are not allowed to conduct insurance business activities before the official date of operation.

Thus, according to the above regulations, branches of foreign reinsurance enterprises are not allowed to conduct insurance business activities before the official date of operation.