Vietnam

Principal Legislation

The core insurance legislation in Vietnam was originally established under the Law on Insurance Business No. 24/2000/QH-10, later amended by Law No. 61/2010/QH-12 and Law No. 42/2019/QH-14. A major revision came with the enactment of Law No. 08/2022/QH-15, which came into effect on 1 January 2023. This new law modernizes the legal framework, aligns with international standards, and introduces comprehensive regulations on insurance operations, auxiliary services, and market supervision. While the 2000 law and its amendments continue to apply during a transition period, they will be fully replaced by 1 January 2028.

Supervision 

Insurance regulation in Vietnam is overseen by the Insurance 2. Supervisory Authority (ISA), which operates as a specialized department within the Ministry of Finance (MOF). Originally established under a 2009 decision and reorganized in 2017, the ISA is responsible for licensing, supervising, and enforcing compliance across all types of insurance enterprises including reinsurers, brokers, foreign branches, and mutual organizations. As of 2023–24, its mandate has expanded under Decree No. 46/2023/ND-CP to include oversight of compulsory insurance programs, maintenance of an industry-wide database, and oversight of cross-border insurance services. The Ministry of Finance has further deepened regulatory control through Circular No. 67/2023/TT-BTC, which sets out new requirements around digital sales practices, commissions limits, and policy illustration standards. The ISA also handles investigations, administrative sanctions, and developing policy on market conduct, actuarial functions, premiums and the Fund for Protection of the Insured.

Admitted/Non‑Admitted

Non-admitted insurance is essentially not permitted in Vietnam. The law requires policyholders to purchase insurance exclusively from locally licensed insurers, except for a small number of specific exemptions (e.g., cross-border trade-related coverage). This framework ensures that insurance risk resides within the domestic, regulated market.

At the same time, direct insurers have complete freedom to place reinsurance both domestically and overseas. There is no legal requirement for foreign reinsurers or international reinsurance brokers operating from Vietnam to register with Vietnamese authorities. However, Decree 73/2016/ND‑CP (under the 2000 Insurance Business Law) limits retention levels to a maximum of 10% of the insurer’s equity per risk, and caps overseas treaty cession at 90% of liability (fronting situations), reinforcing domestic retention and oversight.

Compulsory Classes

• Motor third party liability insurance
• Fire and explosion insurance for 16 designated high-risk industries
• Contractors’ all risks insurance (including third-party liability) for construction projects
• Workers’ compensation insurance for employees on construction sites
• Professional indemnity (PI) for: Lawyers, Insurance brokers, Architects, Engineers, Securities companies, Notaries public, Independent auditors, Fund management companies, Contractors supervising building works, Doctors and medical practitioners, Organisations and individuals handling radiation tasks, Aviation third party and passenger liability for scheduled airlines, Guarantee insurance for construction tenders, Marine oil pollution liability under the International Convention on Civil Liability for Oil Pollution Damage, Transporters’ liability for passengers and for transporting inflammable/explosive substances via inland waterways.

State Involvement

The state has reduced its ownership in major non-life insurers, with no company currently under full state ownership. Several insurance companies still have partial state shareholding, alongside private and foreign investors. This shift reflects ongoing equitisation and economic reform policies encouraging broader ownership structures.

Tariff Classes

Most compulsory insurances, including Motor Third Party Liability, is subject to statutory tariffs.

All compulsory professional indemnity (PI) insurances are generally subject to tariff regulation, except for: Construction professionals (architects and engineers), Securities companies, Fund management companies, independent auditors, Notaries public.

For compulsory fire and explosion insurance, insurers are now allowed to adjust tariff rates within a regulated range based on the risk category.

Premium Taxes and Charges

VAT is payable on non-admitted insurances in accordance with Article 2 Paragraph 2 of Decree No 123/2008/ND-CP of 8 December 2008 which stipulates that “Vietnam-based production and business organisations and individuals that purchase services (including services associated with goods) from foreign organisations without permanent establishments in Vietnam or overseas individuals not residing in Vietnam shall pay value-added tax”. There are no premium taxes applicable to life and health insurance.

Policy Language

The law is silent on the language to be used in insurance contracts: the only requirement is that the wording must be transparent and clear. Policies for foreign-invested companies tend to be in English and the English wording may be the version that prevails in a court of law.

Vietnam’s non-life insurance market continues to grow steadily in 2025, with strong demand in health, personal accident, and property insurance. Growth is supported by rising GDP, industrial activity, and a growing middle class. Leading insurers reported double-digit premium growth in early 2025, despite pressure from climate-related reinsurance costs and soft investment returns.

The market is competitive, with ongoing tariff reforms and the move toward a risk-based capital framework improving overall sector stability. Climate risk, including recent storms like Wipha, is a key challenge.

There are no official statistics for insurance distribution in Vietnam. Agents is central to the non-life sector, with over 200,000 reported agents, mostly part-time and with high turnover. Around 25% of premiums are placed direct. Internet sales and e-commerce is limited, while bancassurance plays a small role, mostly in personal lines like PA and travel. As of 2025, 12 brokers are licensed, with their influence slowly growing.

There are two local reinsurance companies: one (Vinare) writes life and non-life reinsurance; the other (Hanoi Re) writes only non-life business. There are no compulsory cessions to either company. Direct insurers are permitted to accept inwards reinsurance. There are no current relevant statistics showing business volumes. It is thought that local direct insurers do not write any international reinsurance business. Most large commercial risks continue to be reinsured with foreign reinsurers.

Earthquake risk in Vietnam is very low, despite occasional nearby seismic activity, insurers do not treat earthquakes as a significant underwriting hazard.

Vietnam is heavily exposed to typhoons and tropical storms from the East Sea/China Sea during the July–November season. These events regularly bring strong winds and flooding, especially in coastal zones near Hanoi, Haiphong, Da Nang, and Vung Tau. The 2024 Typhoon Yagi triggered severe floods and high insured losses, prompting rapid claims response across multiple insurers.

Flooding—whether from rivers, storm surge, or rainfall—is the most acute natural peril. Over recent years, flooding has become more frequent and severe, particularly in major urban and industrial hubs like Hanoi and Haiphong.

Underwriting and reinsurance practices in Vietnam generally avoid modelling for PML (probable maximum loss); instead, treaties rely on sum insured limits. Most policies provide full flood coverage under packaged forms or comprehensive fire policies, with no separate flood endorsement required.