Recently, the Insurance Supervisory Authority of Vietnam (ISA) under the Ministry of Finance (MOF) held an annual meeting to report on Vietnam's insurance market in 2015. In this meeting, the ISA also proposed operations of insurance market for 2016, and assessed the implementation of the existing strategy to develop Vietnam's insurance market and the project to restructure the insurance market in Vietnam. Specific orientations for 2016 In order to meet the economic requirements and implement the objectives and criteria to develop Vietnam's insurance market for the period of 2016 to 2020, the ISA suggested that the following operations be implemented in 2016:
- Improve the legal framework on insurance, specifically:
The MOF will continue to amend and supplement legal regulations and policies for certain types of insurance, including agricultural insurance, fishery insurance, pension insurance and microinsurance. In addition, in 2016, the MOF is working on two new decrees to replace the existing decrees implementing the Law on Insurance Business. The drafts of these new decrees should be available for public comments in 2016.
- Improve the insurance system security, operation effectiveness and competitiveness of insurers.
For this purpose, the ISA will continue to monitor and urge the insurers to self-assess and rank themselves in accordance with the criteria under the regulations of the MOF.
According to the ISA, the purpose of this proposed action includes the following:
- maintain the insurers' financial safety and efficiency of the business operations;
- research and develop capital management model based on risks;
- promulgate regulations on business risk management, to enhance information technology system of the insurers and their connection to the whole market; and
- complete and implement a project/scheme for improving the quality of human resources for the insurance market in order to develop the professionalization of personnel for the insurers.
- Develop and diversify insurance products
According to the ISA, insurers are encouraged to focus on developing products that respond to the needs of the community or for social safety, and allow flexible adjustment of insurance products to meet the requirements of each customer. In addition, the MOF is planning to build a database of the whole insurance market for insurance actuarial works, creating floor levels of premiums and contributing to a competitive environment in the market.
- Diversify and professionalize insurance distribution channels, including the following:
- expand online format for insurance agents' examinations;
- improve the management of the quality and professionalism of insurance agents; and
- research to issue guidelines for new distribution channels (e.g., e-commerce, mobile phone, etc.) in order to create a legal framework for the insurers to diversify their distribution channels.
- Enhance the effectiveness of the state’s management of insurance businesses.
For this purpose, the MOF and the ISA aims to:
- strengthen their inspection and examination on the insurers;
- research and propose to set up a department in charge of supporting the prevention of insurance fraud; and
- build and implement an information technology system to connect the MOF and the insurers to shorten the timeline for administrative procedures.
- Enhance international cooperations and integration in the insurance sector, ensure the implementation of international integration commitments in the field of insurance, and make the best use of technical assistance from donors/sponsors.