How are dossiers requesting merger of insurance enterprises regulated?

Dossiers requesting merger of insurance enterprises according to Clause 2, Article 23 of Decree 46/2023/ND-CP are as follows: following:

Documentary request for merger of insurance enterprises according to the form specified in Appendix VI issued with Decree 46/2023/ND-CP;

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Written approval from the competent authority as prescribed in the company’s Charter on the merger of insurance enterprises;

Report on the plan to divide and handle valid contracts with customers, debt obligations, obligations to the State, and commitments to employees when merging insurance enterprises;

List of shareholders (or members) contributing capital, charter capital and charter capital structure of the insurance enterprise formed after the merger of the insurance enterprise;

A copy from the original or certified copy of the principle contract on the merger;

Opinion of the valuation agency, clearly stating the determination of share conversion ratio or valuation of capital contribution;

Copy from the original book or certified copy of the audited financial statements for 03 years immediately preceding the year of merger application of the insurance enterprise.

Documents proving that the organization, individual contributing capital and the insurance enterprise expected to be established after the merger meets the provisions in Clause 1 of this Article.

Application to merge insurance enterprises according to the latest regulations?

Application to merge insurance enterprises according to the latest regulations according to Appendix VI issued with the Decree 46/2023/ND-CP.

What conditions must an insurance business merger meet?

The merger of insurance enterprises must meet the conditions according to Clause 1 Article 23 of Decree 46/2023/ND-CP as follows:

Does not cause damage to the legitimate rights and interests of the insurance buyer, employees and the State;

Comply with relevant legal regulations;

Organizations and individuals planning to contribute capital to an insurance enterprise upon merger must meet the conditions specified in Clause 1 and Point b, Clause 2.

Article 64 Law on Insurance Business 2022, Articles 65 Law on Insurance Business 2022, 66 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 enterprises in Vietnam according to the provisions of the Enterprise Law;
b) The organization has legal status and is 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.

 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.
(…)

Article 65. Conditions for members contributing capital to establish an insurance enterprise or reinsurance enterprise in the form of a limited liability company

(…)

Article 66. Conditions on the structure of shareholders contributing capital to establish insurance enterprises and reinsurance enterprises in the form of joint stock companies
The establishment of an insurance enterprise or reinsurance enterprise in the form of a joint stock company must meet the general conditions specified in Article 64 of this Law and the following conditions:

1. There are at least 02 institutional shareholders 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.
Corresponding to the type of business and Article 11 of Decree 46/2023/ND-CP:

Financial conditions to be granted a License to establish and operate an insurance enterprise, reinsurance enterprise, or foreign branch in Vietnam

1. Organizations contributing 10% or more of charter capital to establish an insurance enterprise or reinsurance enterprise must meet the conditions specified in Articles 64, 65, 66 of the Law on Insurance Business and the following financial conditions:
a) Capital contributing organizations operating in business lines requiring minimum legal capital or charter capital or minimum capital must ensure that equity capital minus legal capital or minimum charter capital or minimum capital is greater than or equal to the amount of capital expected to be contributed;
…
– The insurance enterprise formed after the merger meets the conditions specified in Point a, Clause 2, Clauses 3 and 4, Article 64 of the Law on Insurance Business 2022 and the conditions on shareholder structure specified in Article 66 of the Law on Insurance Business 2022 for joint stock companies.