Our story below traces the salient features of the Amended law and also the new reforms brought about by the fresh amendments in 2025 that have come into effect from 2026.
It was on 16 June 2022 that the National Assembly of Vietnam passed the Law on Insurance Business (Amended) with 94.2% of the delegates supporting it. The amended law came into effect on 1 January 2023.
The new amended law was termed a watershed moment for the Vietnamese insurance market. With its guiding decrees and circulars, the new regulatory framework was considered a crucial step toward fine-tuning the country’s insurance industry, driving essential reforms, and championing customer-centricity.
The revised Act of 2022 consisted of 157 articles, regulating the organisation and operation of insurance business; rights and obligations of organisations and individuals participating in insurance; and state supervision of insurance business activities.
Reforms brought in
The changes to the amended law, included five major areas of reforms. Firstly, the new Act gave the insurers a leeway to design, develop and market new products. Under the previous practice, the Ministry of Finance approved about 65 new insurance products and about 20 amended and supplemented insurance products a year. The minimum time to approve a complete and valid dossier was usually 21 working days. It was felt that if the Ministry of Finance has to approve every product, it may delay insurers’ plans to launch new products, hence, the liberty to the insurers in this area was provided.
Secondly, and a very important area from the perspective of the customer, the amended law barred credit institutions from forcing borrowers to purchase insurance products.
The third important feature of the amended law of 2022 was to remove the ceiling on microinsurance premiums to ensure a balance between premiums and risk levels. The previously prevalent ceiling was 6% of the annual per capita income of the near-poor line in urban areas.
Fourthly, the insurers were not to be allowed to invest directly in real estate. However, they could buy shares of listed real estate companies or fund certificates of public funds and purchase real estate for use as offices.
Fifth and final significant change was that the insurers were no longer required to contribute to the Policyholders Protection Fund that was established in 2010. Till 2022 the insurers made a mandatory contribution of 0.3% of their total insurance premiums to this fund. The Fund’s accumulated balance in the 12 years (2010-2022) had exceeded VND1tn ($38.01m) and also the Fund had not made any payout during that period.
The amended Act of 2022 also helped the country to fulfil its international obligations by allowing foreign investors to own up to 100% of the charter capital of insurance and reinsurance companies. The law clearly stipulated that foreign non-life insurance companies and branches were only allowed to be engaged in one of three sectors: life, non-life and health insurance.
The amended law was noteworthy in that it kept social insurance and insurance schemes not of commercial or business nature, out of the purview of the new law. Hence, the new law did not apply to social insurance, health insurance, deposit insurance and other types of insurance implemented by the state that are not of a business nature.
A review in 2025
In keeping with the feedback received from the stakeholders and also the experience gained over the two years (2023 and 2024) of the 2022 Amended Act, the Vietnamese government decided to further reform the insurance law.
The National Assembly on 10 December 2025 passed the amended Law on Insurance Business 2025 (Law No. 139/2025/QH15). Amending 27 articles from the 2022 version. An industry source said the newly amended legislation reflects a strategic effort to restructure the legal framework, ensuring transparency and creating new growth opportunities for the Vietnam insurance market through 2030.
Vietnam’s Insurance Supervisory Authority (ISA) also recently outlined its market development strategy from 2026 to 2030, with an overarching objective to foster an open, favourable, and compliant business environment for insurance companies.
The fresh amendments will help to further develop a safe, efficient and sustainable insurance market while protecting the interests of financial consumers.
Most of the provisions incorporated in the new amended Act came into effect from 1 January 2026. with others following on 1 July 2026. The new Act primarily focuses on administrative procedure reforms and expanding the scope of business for insurers.
The goal is to abolish at least 30% of investment and business rules, reduce by at least 30% the processing time of administrative procedures, and slash compliance costs by 30%, according to local media reports.
The newly revised 27 articles include reducing and simplifying business conditions in nine articles related to the following:
- licensing the establishment and operation of insurance companies.
- conditions before the start of official operations.
- conditions and standards for managers and supervisors.
- overseas investment.
- conditions for operating insurance agencies.
- licensing the establishment and operation of insurance brokerage companies.
- conditions for providing insurance auxiliary services.
Another change was the expansion of the scope of operations for non-life insurance companies, allowing them to offer term life insurance products with a term of no more than one year. Allowing non-life insurance companies to participate in this segment is being considered a step in line with international trends and creates more business development opportunities for the insurers, especially in the health sector.
Another important issue was regulation concerning inspection and supervision in the insurance sector. The new amendments add to the authority of the Ministry of Finance of Vietnam, allowing it to conduct specialised inspections, which were not previously regulated in the Inspection Law. This is expected to avoid legal overlaps and to increase transparency in the function of supervising and handling violations in the insurance business, in line with international practices.
The new Law maintains the official timetable for the implementation of the Risk-Based Capital framework. Full implementation of the framework will be mandatory from 1 January 2031. This allows insurers time to collect data, build technology systems, and train personnel. This also provides time for regulatory agencies to improve governance and supervision capabilities and refine their systems to be compatible with the new framework.
Industry view
Speaking with Asia Insurance Review, Vietnamese insurance intermediary Insurance-in-Asia Managing Partner Pascal Ho Ba Dam said, “Reflecting on the Law on Insurance Business 2022, the pros are overwhelmingly evident in its robust consumer protection mechanisms and the professionalisation of the agency force through categorised, rigorous certification exams. It systematically tackles the most persistent customer grievances, particularly forced cross-selling in the bancassurance channel.
“The cons, however, lie in the heavy compliance and operational burdens placed on insurers and institutional agents. Adapting to the strict 60-day blackout periods for bank-assurance sales, overhauling physical branches to include separate counters, and upgrading IT systems require significant time, structural adjustments, and financial investment from the industry.”
He said it will be, however, a little too early to comment on how the fresh amendments reduce the compliance and operational burdens on the industry. It is heartening to note that the initial reaction to the new amendments is encouraging.
Mr Ho further said, “Despite the short-term implementation hurdles for the industry, I am very confident that this is a distinctly good law. By prioritising transparency, ethical servicing, and responsible institutional behaviour, it stops unchecked, aggressive sales tactics.”
“Ultimately, it lays the necessary foundation for a sustainable, deeply trusted insurance market that truly serves the public interest,” said Mr Ho. A