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Minister of Finance Ho Duc Phoc reports to the National Assembly.

The revised Insurance Business Law will take effect from January 1, 2023 instead of July 2023

At the second session of 15th National Assembly on October 29, Minister of Finance Ho Duc Phoc reported some contents related to the revised draft Law on Insurance Business.

Regarding the layout and structure of the draft Law, the drafting agency will work with the Economic Committee of the National Assembly to merge Chapter VI on accounting and financial statements of insurance and reinsurance companies into one section of Chapter III.

“Regarding the application of information technology, Section 8 of Chapter III will be separated into a chapter instead of Chapter VI to develop insurance products on the digital platform and encourage the application of information technology in insurance operation to reduce costs,” said Minister Ho Duc Phoc.

The draft law will improve the concepts, prohibited acts and specific regulations on compulsory insurance, and the provisions in the insurance contract to comply with the Civil Code and other laws, ensuring the interests of insurance buyers and insurers.

Regarding micro-insurance, contents will be put into the micro-insurance chapter such as establishment conditions, mutual insurance company, operating principles, micro-insurance products, and must ensure feasibility for life and supporting poor and venerable people.

This is a new insurance type, which is less profitable and risky, so it is managed flexibly. The Ministry of Finance proposes including some specific guidelines in the Government’s draft decree.

Regulations on insurance agents and brokers will be improved and made more professional to benefit customers, the Minister of Finance said.

The drafting agency will receive feedback from National Assembly deputies and revise the effective date of this Law from January 1, 2023 instead of July 1, 2023.

The Ministry of Finance is in charge of examining and granting insurance certificates

The draft law will be amended compared with the current law, the Minister of Finance said.

According to the draft Law, the Government and the Ministry of Finance are assigned to guide contents related to technique and policies of the State for each period or updated changes in a timely manner in line with the development of the market, while maintaining stability and long-term vitality of the Law.

The current law assigns the Government to instruct 48 contents, while the draft law only assigns the Government to guide 18 contents, reducing by 30 contents. The Ministry of Finance is assigned to instruct 14 contents, increasing by seven contents,” the Minister said.

The overview of the panel session on October 29, 2021.

The draft law specifies that the provision of information must comply with Article 21 of Constitution, Article 38 of the Civil Law, and the Law on Cyber Security and other laws. Information is encrypted and managed by decentralized management to ensure compliance with regulations and information security.

Regarding compulsory insurance, according to the Minister, many delegates proposed to specify the types of compulsory insurance. However, the draft Law only stipulates three types of compulsory insurance, while other types are prescribed by the National Assembly.

Currently, there are 14 specialized laws, and some new laws may be issued in the near future, and other types of compulsory insurance may be issued. According to international experience, to protect public interest, environment and social safety, only three types of insurance are specified in the law, including compulsory motor vehicle insurance, fire and explosion insurance and construction insurance, and others are stipulated in specialized laws.

The draft law stipulates that the Ministry of Finance will be in charge of organizing the exams and issuing insurance certificates, insurance agents and insurance environment. Enterprises, schools and associations are assigned to organize training courses.

The Ministry of Finance is only in charge of organizing exams and issuing certificates, because insurance is a conditional business, like securities, auditing and valuation. For independent auditing or valuation firms, securities companies, the ministry of finance also holds exams and grants certificates for effective management. There are specialized industries required for strict control.

“When an insurance company is bankrupt, like a commercial bank, it will affect the interests of many insurance participants as well as social safety. This is a highly specialized law, so the leading agency will coordinate with the Economic Committee and the Law Committee to perfect it in the best way," said Minister Ho Duc Phoc.