Decision No. 193/QD-TTg dated February 15, 2012 of the Prime Minister on Vietnam’s insurance market development strategy in the 2011-2020 period

DECISION

ON VIETNAM’S INSURANCEMARKET DEVELOPMENT STRATEGYIN THE2011-2020 PERIOD

THE PRIME MINISTER

Pursuant to the December 25, 2001LawonOrganizationofGovernment;

Pursuant to the Decree No.118/2008/ND-CP dated November 27, 2008 of the Government stipulating functions, duties and rights and organizational structure of the Ministry of Finance;

At the proposal of the Minister of Finance in the Report No. 110/TTr-BTC dated October 31, 2011,

DECIDES

Article 1.The Vietnam’s insurance market development strategy in the 2011-2020 period (hereinafter referred to as “the Strategy”) includes the following main contents:

I. OOBJECTIVESOF THE STRATEGY

1. General objectives

For development of the insurance market be in line with theorientation of socio-economicand national financialdevelopmentineach period;ensuringthe implementation ofinternational commitmentsinwhich Vietnamis a member.For enhancingthesafety, sustainability,the efficiencyof the market andtheability to satisfy thediverseinsurance demandsoforganizationsand individuals;contributing tostabilizethe economyand ensuresocial security. Foraccessinginternational standardsandcommon practicesoninsurance businessand graduallynarrowingthe development gapwith other countriesin the region.

2. Specific objective

a)Building system of mechanismsand policies oninsurance businesscompletely, transparently, equally andsynchronously, facilitatingthe developmentof the market, ensuring theimplementation ofinternational commitment obligationsofVietnam.

b)Enhancing the safetyof thesystem,operational efficiencyandcompetitivenessoftheinsuranceenterprises.Developing insurerswhich having astrongfinancial capacity, agovernancecapacityreaching international standards, operatingeffectively andhaving a capacity tocompeteactivelyat the domestic and regional markets.

c)Encouragingand supporting enterprisesto diversify the insurance products, ensuringsatisfyingthe diverse insurancedemandsoforganizationsand individuals.Facilitatingorganizationsand individuals,especiallylow-incomesubjects,to take part in insurance.

d)Diversifying and professionalizingtheinsurancedistribution channels,creatingan effective bridgebetweeninsurersand their customers.

dd)Organizingtheprofessional, modernand efficientmanagementandsurveillanceof themarket; strongly promotingthe member roleof thestate management organs on insurance business at theASEAN Insurance
Managers Forumand theInternational Association of Insurance Supervisors; gradually comply with standards of insurance management and supervision issued by theInternational Association of Insurance Supervisors.

II.A NUMBER OF SPECIFICTARGETSANDIMPLEMENTATIONROADMAP

1.Total revenueof theinsurance industrywill reach2%-3% ofGDPby the year 2015and3%-4% ofGDP by the year 2020. 

2.The sizeof theinsurance professionalreserve fundsfor fulfillment of theobligations ofinsurance and compensation paymentto customerswill increase twofoldbythe year 2015and 4.5 times by the year 2020 compared to that of the year2010.

3.Total capital resources mobilizedfor the economyfrom theinsuranceenterprisesincrease1.7 timesby the year 2015compared with that ofthe year2010; increase3.5 timesby the year 2020comparedwith that ofthe year2010, equivalent to3-4% of GDP.

4.Contribution to thestate budgetof the insurance industrywillincreasetwofoldby the year 2015 and 4 times by the year 2020compared with that of the year 2010.

5.The state managementagencyoninsurance businessis strivingtofullycomply with 50% oftheprinciples ofinsurancemanagementand supervisionissued by theInternational Association of Insurance Supervisors by the year 2015; and fully comply with the entire principles ofinsurancemanagementand supervisionissued by the theInternational Association of Insurance Supervisorsby the year 2020.

III. FUNDAMENTAL SOLUTIONS

1.Perfecting thelegal systemin the field ofinsurance business

a)Fromnow to the year 2015:

Amending, supplementing, supersedingorpromulgatinglegal documentsguidingthe Law No. 24/2000/QH10on Insurance Businessandthe Law No.61/2010/QH12 amendingand supplementing anumber of articles ofthe Law on Insurance BusinessNo. 24/2000/QH10,in orderto simplifyand reduceadministrative procedures;consistent withthe development situation of theinsurance marketandtheinternationalinsurancemanagementandsupervisionstandards; and ensuringthepublicity,transparency,equalityforthemarketparticipantsandtheobligations to implementinternational commitmentsof Vietnamin the field ofinsurance business.

Modifying theregulations which are overlapped between thesystemofthe insurance business legaldocumentsandotherlegal documents, to ensuretheuniformity, consistencyamongthelegalnormativedocuments.

Studyingto modifyand supplementthecurrent taxpoliciesto support thedevelopment ofinsurance market; focusingonthepolicies encouraginginsurance productsserving thesocial securityandeconomic developmentobjectivessuch asinsurance ofagriculture, forestryand fishery, insurancefor the poor.

b) The 2016-2020 period:

Amending the Law No. 24/2000/QH10onInsurance Businessandthe Law No.61/2010/QH12 amendingand supplementing anumber of articles ofthe Law on Insurance BusinessNo. 24/2000/QH10as a whole together with the documents for implementation guiding in the direction that the new legal document system will expand the adjustment scope and enhance the synchronization of the insurance business activities inconnectionwiththefinancial servicesmarket parts.

2.Enhancing thesystemsafety,operational efficiencyandcompetitivenessoftheinsuranceenterprises

a) From now to the year 2015

Restructuringtheinsuranceenterprises in the direction of consolidatingthe model of activity organization ofenterprises which activeweakly and ineffectively;gradually improvingthe quality ofinsurance enterprises managementby international standards andcommon practices.

Coordinating withagenciesofother financialservicesmanagementtocreatetools oflong-term financialinvestmentfortheinsuranceenterprisesand managing, supervising insuranceenterprisesdirectlyunderthefinancial-banking corporations

Removingphenomenon of the self-contained, dividedinsurance market: Perfecting theregulations to ensureopenness, transparencyand equalityin thesupplying ofinsuranceservice betweenspecialized insurance enterprisesandother insurance enterprises;complying withthe principles ofbidding andcompetitionin the field ofinsurance;supervisingandstrictly handlingmanifestationsofadministrative interventionininsurancecontract engaging;diversifying theownership and continuing to reduce the capital contribution ratioofthe StateGroups andCorporationsin specialized insurance enterprises in order to prevent the self-contained and exclusive expression in the insurance business activities.

Assessingcomprehensively and classifying qualityof human resourcesof theinsurance market;clarifyingstandardsand conditions ofeach position;promulgatingregulations tostandardize thequalityof human resourcesand strengtheningthe trainingwork tomeet theset standards.

b) The2016-2020 period:Developing mechanismsand policies tostrengthenmanagementand operationcapacityoftheinsurance enterprisesbasedonthethreekey requirements:capital safety,risk managementand transparency ofinformation,including:

Promulgatingstrict regulationson legal capitalandthesafety levelsof solvencyofinsurance enterprises.

Promulgatingstrictregulations onrisk managementofinsurance enterprises, includingtheprocesses ofrisk administration, rolesand responsibility ofinsurance enterprises,information and reportsystemforthemanagement work.

Promulgatingstrict regulationson disclosureand transparencyofinformationof insurance enterprises, includingpublicityfrequency,thetype ofpublic information, the detailing level ofpublic information.

3.Encouraging andsupportingenterprisestodevelop and diversifyinsurance products

a) From now to the year 2015

Standardizingconditionsandprocess ofproductapproval,especially theinvestment-linked insurance productsto increase theattractivenessandcompetitivenessofthese productscompared to otheralternative financial products.

Summarizing andevaluatingthe implementation of the pilot programs oftheinsurance typessupported by the State(agricultural insurance,export creditinsurance),and on that basis proposingfurthersolutionsin line with the reality.

Reviewing, amendingand supplementingthecompulsoryinsuranceregimes as prescribed by theLaw on Insurance Business(compulsorycivil liabilityinsuranceof motor vehicle owners,compulsory fire and explosioninsurance)to be in line with theeconomic development conditionsandreality.

b) The 2016-2020 period:

Researching to promulgate newcompulsoryinsurance regimesserving thesocial security objective,and policies toassistlow-incomepersons to take part in insurance; supporting the development ofproductgroupsfor purpose of community andsocial security; buildingcoordination mechanisms for servicessupplyamonginsurance enterprises regardingparticulartypes of insurance(such asatomicenergy insurance).

4. Intensifying and professionalizing insurance distribution channels

a) From now to the year 2015:

Buildingregulations tostandardize thequalityofhuman resourcesof insurance brokerageenterprises;standardizingtraining programand thebrokers certificatein accordance withthe particularityof types ofinsuranceproductarrangedthrough brokerage.Researching to promulgateregulations oncompulsory brokerageprofessional liability insurance.

Strengtheningthe systemof insurance agentsthroughstrict control oftrainingcertificationexams; buildingand applying trainingprogramsandagent certificate according to the complexity of theproducttypes that the agentallowed to consultto customers.

b) The 2016-2020 period

Researching andpromulgatingpolicies to encouragedevelopment ofotherdistribution channelsin accordance withinternational common practiceandthe practical conditionsof Vietnam such asinsurancedistributionchannelthrough banks,internet, etc.

5.Enhancing the efficiencyof statemanagementoninsurance business

a) The 2011-2015 period

Enhancing the inspection, examination andhandling of violationsas prescribed by law.

Researching, amendingand supplementingthe system of insurance business supervision targets in accordance withinternational insurance managementand supervision standardsand characteristics ofVietnam’s insurancemarket;

Developingthe human resources forthe Statemanagement agenciesoninsurance business,clarifyingthe functionsand dutiesofeach position,on thatbasis arranging a force of managing and supervising cadres correspondent to the number of insurance business enterprises. Developing mechanismstoattractqualifiedandexperienced staffsandprofessionals to work instate agenciesoninsurance business, especiallyexpertsworking inspecificfieldssuch asinsurance calculating expert.

b) The 2016-2020 period

Enhancingmode of managementand supervisionthroughoperationaltargetsof business, developingautomaticanalysis system tosupport thework ofanalysis, assessment andriskearly warningofinsurance business.

Modernizing the infrastructureandinformation technologysystemto meet the requirementsofmanagement and supervision activities.Building and developing theinformation technologysystemtoconnect the State managementagencyoninsurance businesswiththe insurance enterprises and insurancebrokerage enterprises, includingprofessional managementand supervisionsoftware and website of thestate managementauthorityon insurance business.Building a sharing statistics database systemforinsurance market, in whichfocusing oncommunal insurance productssuchasthecivil liabilityinsuranceofmotor vehicle owners,etc.

6.Promotinginternational cooperationand integrationinthe field of insurance.

a)Building a roadmap forintegrationinthe field of insurance business,on that basis,determiningthe objectives,guidingprinciplesand solutionsfor integration intoWTO,ASEANand bilateraltrade agreements.

b)Actively andpositivelyparticipating intheASEAN Insurance
Managers Forumand theInternational Association of Insurance Supervisors; building mechanisms and regulationsand preparingthe material facilities tocarry out allmanagement and supervision standardsbeingset bytheInternational Association of Insurance Supervisors, at the same time enlistingthesupport,bilateral cooperationamongtheinsurance management agenciesthroughcollaborative programs,memoranda,staff training,professionalworkshops.

c)Encouraginginsurance enterprises to continuetheirstudy and investmentinto foreigninsurance marketsto expandbusiness opportunities,focusing onpotential andfavorableareasonthe effectiveprinciple.

Article 2.Responsibility of the Ministries and branches and relevant agencies in organizing and implementing the strategy

1. The Minister of Finance will preside over and coordinate with Ministries and ministerial agencies, governmental agencies, provincial/municipal People’s Committee to organize implementation of this Decision.

2. The Ministries and ministerial agencies, governmental agencies, provincial/municipal People’s Committee are liable for coordinating with the Ministry of Finance to execute this Decision and ensure the consistency and uniformity of serving the implementation of the socio-economic development plans of the branches and localities. 

Article 3.This decision will take effect from its signing date of promulgation

Article 4.The Ministers, Heads of ministerial agencies, Heads of agencies directly under the Government, Chairmen of provincial/municipal People’s Committee are liable to execute this Decision./.