VIETNAM - INSURANCE - Regulatory Update Asia Insurance Review interviewing Dr. Oliver Massmann

1. VIETNAM - INSURANCE - Regulatory Update
Asia Insurance Review interviewing Dr. Oliver Massmann
Q1: Can you tell us about any significant regulatory changes to the insurance industry in the
last 12 months (e.g. Decree no. 46/2023/ND-CP)? How have the changes affected the
insurance industry?
A1:
In the last 12 months, Vietnam witnesses the adoption of the following major legal documents:
Decree 21/2023/ND-CP on microinsurance: This decree establishes a legal framework for
political-social organizations, social organizations, professional organizations, and cooperatives to
establish supportive organizations to provide microinsurance to their members. This type of
insurance facilitates insurance participation for low-income individuals who have limited access
to conventional insurance products offered by insurance companies, contributing to the
implementation of social security policies;
Decree 46/2023/ND-CP replaces Decree No. 73/2016/ND-CP and introduces several new
provisions affecting the insurance industry, including: Expanding the regulatory scope to include
insurance enterprises, state management agencies responsible for insurance business activities, as
well as policyholders and beneficiaries; apart from non-life insurance, it also covers property
insurance, cargo insurance, and other damage insurance;
Decree 67/2023/ND-CP on compulsory civil liability insurance of motor vehicle owners,
compulsory fire and explosion insurance, compulsory insurance for construction investment
activities;
Circular 67/2023/TT-BTC guides Decree 67/2023/ND-CP, supplements regulations on insurance
sales through banks; it prohibits banks from selling investment-linked insurance along with loans.
Q2: How would you describe the voluntary implementation of IFRS17 in Vietnam so far?
A2:
According to a survey conducted by the Ho Chi Minh City Stock Exchange and Deloitte Vietnam
in December 2020, more than 50% of the surveyed enterprises have either adopted IFRS or are
planning to convert to IFRS. The practical experience of enterprises currently applying IFRS also
demonstrates that adopting international accounting standards is quite complex in terms of time,

2. implementation costs, as well as the expenses associated with training personnel and preparing
software systems. In fact, the majority of enterprises require up to 12 months to complete the
transition. Additionally, there are certain challenges when implementing IFRS in Vietnam. Firstly,
the complexity of the IFRS system poses a significant challenge. Secondly, many core provisions
throughout the entire VAS accounting system differ substantially from IFRS. Thirdly, there are
difficulties related to the level of expertise of personnel.
The voluntary implementation off IFFRS 17 in Vietnam has both positive and negative aspects:
Positive: The implementation can lead to an improvement in the quality of financial reporting by
enterprises through enhanced transparency, increased comparability, and providing information
for users of financial statements to make management, operation and investment decisions. It
allows for the comparision of the financial position and performance of enterprises across
countries. Moreover, financial statements prepared on the same standardized system provide
Vietnamese enterprises with opportunities to attract investment capital.
Negative: According to a PwC report, the implementation may required more time due to a
shortage of human resources, technology and time constrains.
Q3: How is the Insurance Supervisory Authority (ISA) approaching regulation of
InsurTechs and digital-only insurers? What are some challenges?
A3:
The 2022 Law on Insurance Business includes a provision regulating the application of
information technology in insurance activities.
Licensing and Compliance Monitoring: InsurTechs and digital-only insurers are often subject to
licensing requirements and ongoing compliance monitoring by the ISA.
The challenges are:
- - Traditional insurance regulations may not adequately address the unique characteristics
and risks associated with InsurTechs and digital-only insurers.
- - The digitalization of insurance processes may also lead to challenges related to
transparency, disclosure, and fair treatment of consumers, requiring regulators to ensure adequate
consumer protection measures are in place.
- - InsurTechs and digital-only insurers may face operational risks related to technological
failures, system outages, or inadequate risk management practices.
Q4: What insurance regulatory changes is ISA looking at over the coming 12 months?

3. A4:
In the next 12 months, we expect that ISA will soon adopt the following documents:
Draft amendments to Decree 102/2021/ND-CP regarding administrative fines for violations in the
insurance business sector;
Draft amending and supplementing Circular No 20/2022/TT-BYT on the list, rates and conditions
for payment for pharmaceutical, biological products, and marked substances within the scope
covered by health insurance participants.
Q5: How does ISA plan to strengthen supervision of Vietnam’s insurance industry?
A5:
Implementing a risk-based supervision approach allows the ISA to prioritize its supervisory efforts
based on the level of risk posed by insurance companies.
Enhanced Regulatory Framework: The ISA may work on enhancing the regulatory framework
governing the insurance industry by updating existing regulations and introducing new guidelines .
Enhanced Collaboration and Information Sharing: Collaboration with other regulatory authorities,
industry associations, and international organizations can enhance the effectiveness of supervision
efforts.
***
Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you
have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.