Insurance companies will not be permitted to invest in real estate starting January 1, 2023, as regulated in the revised Law on Insurance Business approved by the National Assembly on June 16.
|Insurance companies are prohibited from trading real estate |
Insurance companies can buy real estate for the purpose of establishing headquarters or offices to operate or to rent the unused parts of their real estate. Along with that, insurance companies can buy shares of real estate companies listed on the stock exchanges.
However, these companies will not be allowed to use Vietnamese citizens’ insurance money to offset the losses or cash shortages of their foreign business.
The adjusted law also scraps a fund that was meant to protect insurance customers as the fund has never been used in its 12 years of existence.
The balance of the fund is currently around $43.5 million, which is managed by the Ministry of Finance and will be used to protect insurance customers in the circumstance that their insurers go bankrupt.
SSI Research forecasts revenues from insurance premiums can touch over $11.1 billion this year, up 18 per cent on-year.
At present, Vietnam is the hub of large-scale insurance companies, including Prudential Vietnam Assurance, Dai-ichi Life Vietnam, AIA Vietnam, Manulife Vietnam and Bao Viet Life.
Meanwhile, firms like Bao Viet Insurance Corporation, PVI Insurance, Post and Telecommunication Joint Stock Insurance Corporation, Petrolimex Insurance Corporation, and Military Insurance Corporation were named among the top 10 non-life insurance firms.
By Kim Oanh