Quyết định 193/QD-TTg

DECISION

ON VIETNAM’S INSURANCE MARKET DEVELOPMENT STRATEGY IN THE 2011-2020 PERIOD

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of Government;

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. OBJECTIVES OF THE STRATEGY

1. General objectives

For development of the insurance market be in line with the orientation of socio-economic and national financal development in each period; ensuring the implementation of international commitments in which Vietnam is a member. For enhancing the safety, sustainability, the efficiency of the market and the ability to satisfy the diverse insurance demands of organizations and individuals; contributing to stabilize the economy and ensure social security. For accessing international standards and common practices on insurance business and gradually narrowing the development gap with other countries in the region.

2. Specific objective

a) Building system of mechanisms and policies on insurance business completely, transparently, equally and synchronously, facilitating the development of the market, ensuring the implementation of international commitment obligations of Vietnam.

b) Enhancing the safety of the system, operational efficiency and competitiveness of the insurance enterprises. Developing insurers which having a strong financial capacity, a governance capacity reaching international standards, operating effectively and having a capacity to compete actively at the domestic and regional markets.

c) Encouraging and supporting enterprises to diversify the insurance products, ensuring satisfying the diverse insurance demands of organizations and individuals. Facilitating organizations and individuals, especially low-income subjects, to take part in insurance.

d) Diversifying and professionalizing the insurance distribution channels, creating an effective bridge between insurers and their customers.

dd) Organizing the professional, modern and efficient management and surveillance of the market; strongly promoting the member role of the state management organs on insurance business at the ASEAN Insurance
Managers Forum and the International Association of Insurance Supervisors; gradually comply with standards of insurance management and supervision issued by the International Association of Insurance Supervisors.

II. A NUMBER OF SPECIFIC TARGETS AND IMPLEMENTATION ROADMAP

1. Total revenue of the insurance industry will reach 2% - 3% of GDP by the year 2015 and 3% - 4% of GDP by the year 2020. 

2. The size of the insurance professinal reserve funds for fulfillment of the obligations of insurance and compensation payment to customers will increase twofold by the year 2015 and 4.5 times by the year 2020 compared to that of the year 2010.

3. Total capital resources mobilized for the economy from the insurance enterprises increase 1.7 times by the year 2015 compared with that of the year 2010; increase 3.5 times by the year 2020 compared with that of the year 2010, equivalent to 3-4% of GDP .

4. Contribution to the state budget of the insurance industry will increase twofold by the year 2015 and 4 times by the year 2020 compared with that of the year 2010.

5. The state management agency on insurance business is striving to fully comply with 50% of the principles of insurance management and supervision issued by the International Association of Insurance Supervisors by the year 2015; and fully comply with the entire principles of insurance management and supervision issued by the the International Association of Insurance Supervisors by the year 2020.

III. FUNDAMENTAL SOLUTIONS

1. Perfecting the legal system in the field of insurance business

a) From now to the year 2015:

Amending, supplementing, superseding or promulgating legal documents guiding the Law No. 24/2000/QH10 on Insurance Business and the Law No. 61/2010/QH12 amending and supplementing a number of articles of the Law on Insurance Business No. 24/2000/QH10, in order to simplify and reduce administrative procedures; consistent with the development situation of the insurance market and the international insurance management and supervision standards; and ensuring the publicity, transparency, equality for the market participants and the obligations to implement international commitments of Vietnam in the field of insurance business.

Modifying the regulations which are overlapped between the system of the insurance business legal documents and other legal documents, to ensure the uniformity, consistency among the legal normative documents.

Studying to modify and supplement the current tax policies to support the development of insurance market; focusing on the policies encouraging insurance products serving the social security and economic development objectives such as insurance of agriculture, forestry and fishery, insurance for the poor.

b) The 2016-2020 period:

Amending the Law No. 24/2000/QH10 on Insurance Business and the Law No. 61/2010 / QH12 amending and supplementing a number of articles of the Law on Insurance Business No. 24/2000/QH10 as 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 in connection with the financial services market parts.

2. Enhancing the system safety, operational efficiency and competitiveness of the insurance enterprises

a) From now to the year 2015

Restructuring the insurance enterprises in the direction of consolidating the model of activity organization of enterprises which active weakly and ineffectively; gradually improving the quality of insurance enterprises management by international standards and common practices.

Coordinating with agencies of other financial services management to create tools of long-term financial investment for the insurance enterprises and managing, supervising insurance enterprises directly under the financial - banking corporations

Removing phenomenon of the self-contained, divided insurance market: Perfecting the regulations to ensure openness, transparency and equality in the supplying of insurance service between specialized insurance enterprises and other insurance enterprises; complying with the principles of bidding and competition in the field of insurance; supervising and strictly handling manifestations of administrative intervention in insurance contract engaging; diversifying the ownership and continuing to reduce the capital contribution ratio of the State Groups and Corporations in specialized insurance enterprises in order to prevent the self-contained and exclusive expression in the insurance business activities.

Assessing comprehensively and classifying quality of human resources of the insurance market; clarifying standards and conditions of each position; promulgating regulations to standardize the quality of human resources and strengthening the training work to meet the set standards.

b) The 2016-2020 period: Developing mechanisms and policies to strengthen management and operation capacity of the insurance enterprises based on the three key requirements: capital safety, risk management and transparency of information, including:

Promulgating strict regulations on legal capital and the safety levels of solvency of insurance enterprises.

Promulgating strict regulations on risk management of insurance enterprises, including the processes of risk administration, roles and responsibility of insurance enterprises, information and report system for the management work.

Promulgating strict regulations on disclosure and transparency of information of insurance enterprises, including publicity frequency, the type of public information, the detailing level of public information.

3. Encouraging and supporting enterprises to develop and diversify insurance products

a) From now to the year 2015

Standardizing conditions and process of product approval, especially the investment-linked insurance products to increase the attractiveness and competitiveness of these products compared to other alternative financial products.

Summarizing and evaluating the implementation of the pilot programs of the insurance types supported by the State (agricultural insurance, export credit insurance), and on that basis proposing futher solutions in line with the reality.

Reviewing, amending and supplementing the compulsory insurance regimes as prescribed by the Law on Insurance Business (compulsory civil liability insurance of motor vehicle owners, compulsory fire and explosion insurance) to be in line with the economic development conditions and reality.

b) The 2016-2020 period:

Researching to promulgate new compulsory insurance regimes serving the social security objective, and policies to assist low-income persons to take part in insurance; supporting the development of product groups for purpose of community and social security; buiding coordination mechanisms for services supply among insurance enterprises regarding particular types of insurance (such as atomic energy insurance).

4. Intensifying and professionalizing insurance distribution channels

a) From now to the year 2015:

Building regulations to standardize the quality of human resources of insurance brokerage enterprises; standardizing training program and the brokers certificate in accordance with the particularity of types of insurance product arranged through brokerage. Researching to promulgate regulations on compulsory brokerage professional liability insurance.

Strengthening the system of insurance agents through strict control of training certification exams; building and applying training programs and agent certificate according to the complexity of the product types that the agent allowed to consult to customers.

b) The 2016-2020 period

Researching and promulgating policies to encourage development of other distribution channels in accordance with international common practice and the practical conditions of Vietnam such as insurance distribution channel through banks, internet, etc.

5. Enhancing the efficiency of state management on insurance business

a) The 2011-2015 period

Enhancing the inspection, examination and handling of violations as presribed by law.

Researching, amending and supplementing the system of insurance business supervision targets in accordance with international insurance management and supervision standards and characteristics of Vietnam’s insurance market;

Developing the human resources for the State management agencies on insurance business, clarifying the functions and duties of each position, on that basis arranging a force of managing and supervising cadres correspondent to the number of insurance business enterprises. Developing mechanisms to attract qualified and experienced staffs and professionals to work in state agencies on insurance business, especially experts working in specific fields such as insurance calculating expert.

b) The 2016-2020 period

Enhancing mode of management and supervision through operational targets of business, developing automatic analysis system to support the work of analysis, assessment and risk early warning of insurance business.

Modernizing the infrastructure and information technology system to meet the requirements of management and supervision activities. Building and developing the information technology system to connect the State management agency on insurance business with the insurance enterprises and insurance brokerage enterprises, including professional management and supervision softwares and website of the state management authority on insurance business. Building a sharing statistics database system for insurance market, in which focusing on communal insurance products such as the civil liability insurance of motor vehicle owners, etc.

6. Promoting international cooperation and integration in the field of insurance.

a) Building a roadmap for integration in the field of insurance business, on that basis, determining the objectives, guiding principles and solutions for integration into WTO, ASEAN and bilateral trade agreements.

b) Actively and positively participating in the ASEAN Insurance
Managers Forum and the International Association of Insurance Supervisors; building mechanisms and regulations and preparing the material facilities to carry out all management and supervision standards being set by the International Association of Insurance Supervisors, at the same time enlisting the support, bilateral cooperation among the insurance management agencies through collaborative programs, memoranda, staff training, professional workshops.

c) Encouraging insurance enterprises to continue their study and investment into foreign insurance markets to expand business opportunities, focusing on potential and favorable areas on the effective principle.

Article 2. Responsibilitiy 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, Chairmans of provincial/municipal People’s Committee are liable to execute this Decision./.