What conditions need to be met to separate a reinsurance business? How are dossiers requesting separation of reinsurance businesses regulated? This article shares the legal regulations surrounding the topic of separating reinsurance businesses according to current legal regulations. 

CSPL:  Clause 1 Article 23 Decree 46/2023/ND-CP

             Clause 2 Article 23 Decree 46/2023/ND-CP 

             Clause 1 and point b clause 2 Article 64, Article 65, 66 Law on Insurance Business 2022 

1. Conditions that need to be met to separate a reinsurance enterprise

According to the provisions of Clause 1, Article 23 of Decree 46/2023/ND-CP, the conditions that need to be met to separate a reinsurance enterprise are stipulated as follows:

– Do not cause damage to the legitimate rights and interests of the insurance buyer, employees and investors. country;

– Comply with relevant legal provisions;

– Organizations and individuals planning to contribute capital to a reinsurance enterprise after separation must meet the conditions specified in Clause 1 and Point b Clause 2 Article 64 of the Law on Insurance Business 2022, Articles 65, 66 of the Law on Insurance Business 2022 specifically:

Article 64. General conditions for granting licenses for establishment and operation of insurance enterprises and reinsurance enterprises

1. Conditions for shareholders and members contributing capital to establish:

a) Organizations and individuals have the right to establish and manage businesses in Vietnam according to the provisions of the Enterprise Law;

b) Organizations have legal status and are operating legally; In case of contributing 10% or more of charter capital, the business must be profitable for the last 3 consecutive financial years up to the time of submitting the application for license and meet the financial conditions according to the Government’s regulations;

c) Insurance enterprises and reinsurance enterprises that have been licensed to establish and operate in Vietnam must contribute capital to establish a new insurance enterprise or reinsurance enterprise and must have been profitable for the last 3 consecutive financial years up to the time of submitting the application for license and meet the capital adequacy ratio as prescribed by this Law.

2. Capital conditions:

…

b) Shareholders and founding members are not allowed to use loan capital or investment trust capital from other organizations or individuals to contribute capital.

1. Conditions for organizations established under foreign laws:

a) Being an insurance enterprise, reinsurance enterprise, foreign financial or insurance corporation;

b) Be certified by a foreign competent authority that the insurance enterprise, reinsurance enterprise, foreign financial or insurance corporation has not seriously violated the provisions of law on insurance business of the country where the enterprise is headquartered within the latest 03 consecutive years up to the time of submitting the application for license;

c) The field expected to request a license to perform in Vietnam is the field that the insurance enterprise, reinsurance enterprise, foreign financial or insurance corporation is directly implementing or has a subsidiary implementing for at least the last 07 consecutive years;

d) Have total assets of not less than 02 billion US dollars in the year immediately preceding the year of submitting the application for an establishment and operation license;

d) Commitment to support in finance, technology, corporate governance, risk management, operations and operations for insurance enterprises and reinsurance enterprises expected to be established in Vietnam; ensure that these insurance enterprises and reinsurance enterprises comply with regulations on financial safety and risk management according to the provisions of this Law;

e) Foreign insurance enterprises, reinsurance enterprises, financial and insurance corporations that meet the conditions specified in Points b, c, d and dd of this Clause may authorize a subsidiary specializing in performing the function of investing abroad to establish insurance enterprises and reinsurance enterprises in Vietnam. Subsidiaries specializing in performing the function of investing abroad must meet the conditions specified in Point d of this Clause;

2. Conditions for economic organizations established under the provisions of Vietnamese law: have total assets not less than 2,000 billion VND in the year immediately preceding the year of submitting the application for license;

3. Pursuant to the provisions of Point d, Clause 1 and Clause 2 of this Article, the Government specifically stipulates the minimum total assets appropriate for each period.

The establishment of an insurance enterprise, a reinsurance enterprise in the form of a joint stock company must meet the conditions General conditions specified in Article 64 of this Law and the following conditions:

1. There are at least 02 shareholders who are organizations and each shareholder meets the following conditions:

a) Must contribute 10% or more of the charter capital of the insurance enterprise or reinsurance enterprise;

b) Conditions specified in Article 65 of this Law;

2. An individual shareholder may not contribute more than 10% of the charter capital of an insurance enterprise or reinsurance enterprise.

2. Dossier requesting separation of reinsurance enterprise