Streamlining procedures for new life insurance products

Decree 73 will simplify the submission procedure for companys registering new products Photo: Le Toan

According to the government’s newly-issued Decree No.73/2016/ND-CP dated July 1, 2016, the Ministry of Finance (MoF) will be the only authority that life insurance firms need to work with to receive approval for launching their new products.

“Now with the Decree 73, life insurers only need to submit product dossiers to the MoF. The ministry will then be responsible for working with other governing authorities before providing firms with a final response,” said Phung Dac Loc, general secretary of the Association of Vietnam Insurers (AVI).

Article 40, Clause 3 of the decree requires that within three days of the issuance of approval, the MoF has to send documents to the Ministry of Industry and Trade (MoIT) to go through other required procedures, meeting the Vietnamese law on consumer protection.

Previously, life insurance firms had to seek approval for the launch of new products from both the MoF and the MoIT. Under Decree No.35/2015/QD-TTg issued on October 15, 2015, life insurance businesses were subjected to “the list of essential goods and services for which contract forms and general transaction conditions must be registered,” which meant all life insurance contracts, terms and conditions, must be registered with the MoIT.

With the former regulations, products were expected to be approved by both ministries. Life insurance firms spoke out against the regulations because it duplicated the approval process and increased the turn-around time for life insurance products to be approved.

“Life insurance contracts and materials contain a good deal of technical information that is much more complicated when compared with other commodities, this can take the MoIT much longer to consider,” stated a representative from Prudential Assurance Vietnam during the European Chamber of Commerce’s White Book launch earlier this year.

According to Loc, the association actively called for the procedure to be simplified with “great co-operation from foreign enterprise associations, such as the American Chamber of Commerce and the European Chamber of Commerce.”

Notably, Loc revealed the important role of BIDV-MetLife, the joint-venture between Bank of Investment and Development of Vietnam and the global insurer MetLife, “Although the firm is a new player in the market, (BIDV-MetLife went into operation in 2014), the powerful financial capacity of the mother group MetLife let its voice be heard,” he said.

Additionally, the effective participation of the National Administrative Procedure Reform Council was also praised by the association.