Is an insurance enterprise established as a joint stock company required to have a Supervisory Board?

The organizational and management structure of an insurance enterprise established in the form of a joint stock company is specified in Clause 1, Article 79 of the 2022 Law on Insurance Business as follows:

Management and organizational structure of insurance enterprises and reinsurance enterprises

1. Insurance enterprises and reinsurance enterprises established in the form of joint stock companies have the right to choose a management organizational structure according to one of the following two models:

a) General Meeting of Shareholders, Board of Directors, Supervisory Board, Director or General Director. The Supervisory Board has from 03 to 05 Supervisors as prescribed in the Company’s Charter;

b) General Meeting of Shareholders, Board of Directors, Director or General Director, in which at least 20% of the members of the Board of Directors must be independent members and there is an Audit Committee under the Board of Directors. The organizational structure, functions, and tasks of the Audit Committee are specified in the Company Charter or the operating regulations of the Audit Committee issued by the Board of Directors.

2. Insurance enterprises and reinsurance enterprises are established in the form of limited liability companies with a management organizational structure including a Board of members, Director or General Director. Insurance enterprises and reinsurance enterprises may decide to establish a Control Board to ensure compliance with the provisions of law.

Thus, according to regulations, in case an insurance enterprise is established as a joint stock company and chooses a management structure based on the model of the General Meeting of Shareholders, Board of Directors, Control Board, Director or General Director, it is required to have a Control Board.

The Supervisory Board has from 03 to 05 Supervisors as prescribed in the Company’s Charter.

However, if an insurance enterprise chooses a management organizational structure based on the model of the General Meeting of Shareholders, Board of Directors, Director or General Director, there is no need for a Supervisory Board.

What positions do controllers at insurance enterprises include?

Controllers at insurance enterprises are specified in Clause 3, Article 80 of the Law on Insurance Business 2022 as follows:

Managers, controllers of insurance enterprises, reinsurance enterprises, foreign branches in Vietnam

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3. Controllers at insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam have the right to independence in terms of professional expertise, including the following titles:

a) Head of the Supervisory Board, Controller;

b) Head of risk management department, Head of compliance control department, Head of internal audit department;

c) Expert calculation.

4. Insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam must ensure the maintenance of a Director and Actuary or General Director and Actuary. In case of any change, within 75 days from the date the Director or General Director or Actuary ceases to hold their position, the insurance enterprise, reinsurance enterprise, or foreign branch in Vietnam must submit a valid application to request the Ministry of Finance to approve the new Director or General Director or Actuary.

Accordingly, controllers at insurance enterprises include the following positions:

(1) Head of the Supervisory Board, Controller;

(2) Head of risk management department, Head of compliance control department, Head of internal audit department;

(3) Actuarial expert.

The head of the supervisory board of an insurance enterprise cannot concurrently hold which positions?

The head of the supervisory board of an insurance enterprise is specified in Clause 5, Article 82 of the Law on Insurance Business 2022 as follows:

Principles of holding positions

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4. The positions of Actuarial Expert, Head of Risk Management Department, Head of Compliance Control Department of insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam cannot concurrently hold any management positions at the same organization; You are not allowed to work at the same time at an insurance enterprise, reinsurance enterprise, or other foreign branch operating in Vietnam. Actuarial experts perform tasks according to regulations of the Minister of Finance.

5. The Head of the Supervisory Board and Controllers are not allowed to concurrently hold any management positions at the same organization. The Head of the Supervisory Board must not concurrently be a Controller or manager of another insurance enterprise or reinsurance enterprise operating in Vietnam.

6. Chief accountants, heads of internal audit departments of insurance enterprises, reinsurance enterprises, and foreign branches in Vietnam are not allowed to concurrently hold any positions at the same organization; Must not simultaneously work at an insurance enterprise, reinsurance enterprise, or other foreign branch operating in Vietnam.

Thus, according to regulations, the Head of the Supervisory Board of an insurance enterprise cannot concurrently hold any management positions at the same organization.

The Head of the Supervisory Board cannot simultaneously be a Controller or manager of another insurance enterprise operating in Vietnam.