Quyết định 175/2003/QD-TTg

DECISION

APPROVING THE STRATEGY ON DEVELOPMENT OF VIETNAM'S INSURANCE MARKET FROM 2003 TO 2010

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the December 9, 2000 Law on Insurance Business;
At the proposal of the Minister of Finance in Report No. 43/TTr-BTC dated May 7, 2003 and Official Dispatch No. 7813 TC/TCNH dated July 29, 2003,

DECIDES:

Article 1. To approve the Strategy on development of Vietnam's insurance market from 2003 to 2010 with the following principal contents:

1. Objectives

To develop the insurance market in a comprehensive, safe and healthy manner, aiming to satisfy the fundamental insurance demands of the economy and the population; to ensure that organizations and individuals benefit from insurance products of international standards; to attract domestic and foreign resources for socio-economic development investment; to raise the financial and business capabilities of insurance business enterprises, meeting the competition and international integration requirements.

The State manages and supervises insurance business activities according to Vietnamese laws and international principles and standards.

2. Some principle norms

a) The total insurance premium turnover increases by around 24% annually on average; in which the non-life insurance rises by around 16.5%/year and life insurance by around 28%/year. The entire insurance sector's premium ratio to GDP shall be 2.5% by 2005 and 4.2% by 2010.

By 2010, the total operation reserve of the insurance business enterprises shall increase by 12 times; the total capital amount reinvested into the economy shall rise by around 14 times over 2002.

b) To create jobs for some 150,000 persons by 2010. The State budget remittance in the 2003-2010 period shall increase by 20%/year on average.

3. Major solutions

a) Regarding mechanisms and policies

- Continuing to perfect the mechanisms and policies on insurance business activities so as to make the market develop healthily, safely and suitably to the integration requirements; ensuring the autonomy and self-responsibility of insurance business enterprises.

- The State shall work out policies to encourage people to participate in life insurance, giving priority to the development of life insurance products of long-term investment nature; encourage insurance business enterprises to research into and develop agricultural, forestry and fishery insurance products; attach importance to expanding the operation scope to deep-lying and remote regions.

- Developing the networks of professional insurance agents, insurance brokerage enterprises and other distribution channels. Diversifying forms of insurance brokerage business; the State shall not directly invest more capital in the insurance brokerage domain.

- Insurance business enterprises may set up investment funds, trust funds and fund-managing companies under the provisions of law. Foreign-invested insurance premiums for investment in Vietnam, shall be entitled to investment mechanisms and policies like domestic insurance business enterprises.

- The State shall work out mechanisms and policies for insurance enterprises to supplement their charter capital by themselves suitably to their respective operation nature and business scale.

- Encouraging insurance business enterprises to modernize the business administration technology, to train the contingent of officials up to international professional standards, hire domestic and foreign specialists to manage a number of operation domains strictly according to the provisions of law.

b) Regarding the organization of operation of enterprises

- Reorganizing the existing domestic insurance enterprises, ensuring to raise their business capacity, to develop insurance products, expand the market shares and the market. Non-State economic sectors, which meet the conditions prescribed by the Insurance Business Law, are entitled to set up joint-stock insurance companies.

The State enterprises must not use the State capital to set up new insurance enterprises and contribute capital to the establishment of specialized joint-stock insurance companies.

- Permitting foreign-invested enterprises to expand their operation contents and scope, increase their charter capital, if they satisfy the law-prescribed conditions.

- The granting of establishment licenses to foreign-invested insurance companies operating in Vietnam must conform to the market development scope and requirements, the integration roadmap and international commitments. Attaching importance to insurance companies of countries which have established trade and investment relations with Vietnam, companies with financial capability, high technological standards and experience in insurance operations and with contributions to the development of Vietnam's insurance market.

- Encouraging domestic enterprises to expand their business operation scope, even to international and regional insurance markets, to contribute capital to insurance, insurance brokerage or re-insurance companies operating with success in foreign countries and to set up affiliate companies doing insurance business overseas.

c) Enhancing the State's management role

- Renewing the mode and raising the capability of State management over business activities, then gradually proceeding to implement the international insurance management principles and standards. The State shall supervise the insurance business activities through the system of norms on operations of insurance enterprises and inspect and handle violations according to law, not to administratively interfere in the operations of enterprises.

- Perfecting the organizational apparatus of Vietnam Insurance Association so that it can perform the role of bridging the insurance enterprises with the State management agencies.

Article 2. Implementation organization

1. To assign the Minister of Finance the responsibility to direct and organize the implementation of the approved Strategy on development of the insurance market from 2003 to 2010.

2. The concerned ministries shall have to coordinate with the Ministry of Finance in implementing plans on reorganizing their attached insurance enterprises according to the current law provisions and the approved strategy.

Article 3. The Decision takes implementation effect 15 days after its publication in the Official Gazette.

Article 4. The ministers, the heads of the ministerial-level agencies, the heads of agencies attached to the Government, the presidents of the provincial/municipal People's Committees shall have to implement this Decision.