IV. Operations and Structures

A. Corporate Forms in Vietnam

An insurance enterprise or organization can take the following forms:

• Joint stock insurance company;
• Limited-liability insurance company;
• Mutual insurance organization; and
• Insurance cooperative.[1]

1.  Joint stock insurance company

A joint stock company is a limited liability entity privately capitalized by at least three shareholders. The company is established with the approval of the local provincial People’s Committee. A joint stock company is entitled to issue securities to raise capital, including common and preferred shares and bonds, and there is no minimum or maximum condition for equity contribution by any shareholder, regardless of nationality.

A joint-stock insurance company can be a joint-stock life insurance company, a joint-stock non-life insurance company, a joint-stock health insurance company, a joint-stock reinsurance company or a joint-stock insurance brokerage company.

2.  Limited liability insurance company

There are two types of limited liability companies: (i) one-member limited liability company for a single investor and (ii) two-to-fifty member limited liability company for several investors (“LLC”). The LLC is established and owned by individuals and entities, either foreign or domestic. The LLC is a legal entity separate from the investors; the investors are liable for the debts of the LLC up to the value of the LLC’s charter capital.

A limited liability insurance company can be a limited liability life insurance company, a limited liability non-life insurance company, a limited liability health insurance company, a limited liability reinsurance company or a limited liability insurance brokerage company.

3.  Mutual support insurance organization and insurance cooperatives

A mutual support insurance organization is established in order to underwrite risks for its members on a non-profit and mutual assistance basis.[2] The members of the organization are both the owners and the insurance buyers, and they enter into separate insurance policies with the organization. Mutual insurance lacks a developed policy and regulatory framework. Mutual insurance organizations, however, have a role in high risk sectors, such as agriculture.

B. Conditions for establishment and licensing

In order to operate in Vietnam, all insurance businesses must first meet certain conditions and requirements.[3] There are specific requirements for each type of insurance business, whether it is an insurance company, a branch of a foreign insurance company or an insurance brokerage company.[4]. The prospective shareholders must submit an application dossier to the MOF. The prospective insurance business must meet certain capital contribution requirements and set up certain kinds of reserve fund. Nominated managers and executives of the prospective insurance business must meet conditions on managerial capacity and professional qualifications.[5]

1.  Conditions to establish an insurance enterprise in Vietnam – excluding cooperatives and mutual insurance organization

Vietnamese and foreign individuals/organizations that contribute capital to establish an insurance enterprise must meet the following conditions:[6]

1. Not be one of the restricted individuals and organizations provided in the Corporate Law.[7].

1. Not use the money and resources of other individuals and organizations to contribute the capital to establish the prospective insurance enterprise.

1. Have had a positive business for three consecutive years prior to submitting the application dossier and have not had any accumulated loss before submitting the application dossier.

1. If it operates in a business with a legal capital requirement, its remaining capital after capital contribution to the prospective insurance business must meet the legal capital requirements.

1. If it is an insurance enterprise, a commercial bank, a financial company or a securities company, it must maintain the required financial safety ratios and must obtain approvals as required by law.

2.  Licensing

If an organization is able to meet these requirements, it may submit an application dossier to obtain an establishment and operation license. The basic dossier must contain, among other things: the application forms; a draft charter; a list of founding shareholders (both entities and individuals) holding 10% or more of the charter capital together with all related required documents; certification by a bank in Vietnam that the charter capital has been placed in an escrow account at the bank; a five-year business plan that describes the proposed scope of business, investment capital, economic benefits of the establishment of the enterprise, operational processes, internal supervision systems, and risk management processes; a list of managerial personnel and descriptions of their professional qualifications; contributed capital amounts and disclosure of those entities or individuals holding 10% or more of the charter capital; rules, policy terms, premium tariffs, and commissions on insurance products; meeting minutes of shareholders agreeing to the draft charter and to establish the insurance business; authorization for a individual or an entity to complete all necessary legal procedures; approval from the relevant government authority.[8] Depending on the type of insurance business, there are other documents that may have to be included in the application dossier.

Within twelve (12) months from the date it receives its license, an insurance enterprise must complete certain post-licensing procedures. It must release the capital in the escrow account into charter capital, register its seal, tax code, open a bank account as required by law, file a report with the MOF on its plan to create the required operational reserves, and adopt internal regulations on supervision, compensation, internal control, financial management, investment and reinsurance management, if necessary. If it fails to start operations within 12 months, its license will be revoked.[9]

3.  Management

According to Decree 73/2016, managerial positions in an insurance enterprise include, but are not limited to, the Board of Management, the Executives Committee, Head of Internal Audit, General Director, Deputy General Director, Internal Control, Chief Accountant, Head of the Operational team. All managerial personnel must meet the following criteria:[10]

• Not be on a list of people forbidden to assume a managerial position under the Corporate Law 2014.[11]
• For three consecutive years prior to the date of appointment, not be:
  • Subject to any administrative penalties which have resulted in suspension from a managerial position in the insurance enterprise.
  • Subject to any disciplinary action for violation of internal procedures which have resulted in suspension or termination of employment.
  • Directly involved in any investigation or legal proceeding at the moment of appointment.

There are specific requirements for each managerial position. These requirements are in the nature of qualifications. They include a university degree or higher; insurance training, which requires qualifications or a certificate from an accredited insurance training institution; working legally in Vietnam or abroad; experience which requires at least three to five years, depending on the position; and residence, which requires the person to reside in Vietnam while an incumbent. Appointment or change of the positions of Chairman of the Board of Management, General Director and Appointed Actuaries must be approved by the MOF. The appointment or change to the above positions require the insurance enterprise to prepare a dossier, which includes various appointment documents as required by the Charter of the enterprise; relevant personal documents: resume, identification, qualifications; documents from the appointed person which show commitment to work for the enterprise after being approved. Statutorily, within seven days of receipt of the completed dossier, the MOF will issue a written approval, but it may take longer in practice.

4.  Capital Contribution

The enterprise must provide information on the capital contribution of each entity or individual with a share of more than 10% in the enterprise.

The charter capital of an insurance enterprise is the capital amount contributed or committed to be contributed by its members or shareholders.[12] The paid-up charter capital of an insurance enterprise must be sufficient for the breadth of its operations, business plans, and location.

An insurance enterprise must maintain its contributed charter capital at a level equal to or greater than its legal capital.[13] Article 10 of Decree 73/2016 sets the minimum legal capital for each type of insurance enterprises, as follows:

Table 1: Minimum legal capital requirements for insurance business in Vietnam

5.  Escrow Account and Reserves

The LOIB, as well as Decree 73/2016, require an insurance enterprise to open an escrow account at a local commercial bank within 60 days after receiving its License. The insurance enterprise must deposit 2% of the statutory legal capital in the escrow account.[14] The insurance enterprise may draw upon the deposit to fulfill its commitments to insurance buyers if their solvency fails. Such use, however, must be approved by the MOF. Within 90 days of drawing down the deposit, the insurance enterprise must replenish the escrow account.[15]

Insurance operational reserves represent an amount of money which an enterprise must set aside to cover predetermined insurance liabilities arising from its insurance policies.[16] The reserve is charged against profits to cover projected claims and obligations. A reserve creates a reduction in the current profit. When the obligations have actually been incurred and satisfied, the reserve can be reduced, thus removing a charge on the current profit. On the balance sheet, the reserve appears as a liability. The amounts represented by each reserve can be invested. The required operational reserves are different for non-life insurance and life insurance.

A non-life insurance enterprise must set up the following operational reserves:[17]

1. Unearned Premium Reserve: to be used to indemnify liabilities likely to arise during the term an insurance policy is in force;
2. Indemnity Reserve: to be used to cover losses incurred by reason of an insurance liability but for which claims have not yet been settled; and
3. Large Loss Fluctuation Reserve: To be used to pay indemnities in case large fluctuations in losses occur, but the total premium retained in a fiscal year, after deductions for setting up the Unearned Premium Reserve and the Indemnity Reserve, is insufficient to pay indemnity for the retained liability. Contributions must be made annually until the balance in the reserve is equal to 100% of premiums actually received in the insurer’s fiscal year.

A life insurance enterprise must set up the following operational reserves:[18]

1. Actuarial Reserve or Mathematical Reserve: The difference between the present value of the insured sum and the present value of future premiums, to be used to pay the insured sum for committed liabilities upon the occurrence of an insured event.
2. Unearned Premium Reserve: to be used to pay such insured sum as is likely to arise during the duration of an insurance policy in the subsequent year.
3. Indemnity Reserve: to be used to pay the insured sum upon the occurrence of an insured event, which payment remains unsettled by the end of a fiscal year.
4. Interest Sharing Reserve: to be used to pay the interest agreed by the insurance enterprise and the insurance buyer.
5. Balance Reserve: to be used to pay the insured sum upon the occurrence of an insured event due to significant changes in mortality rates or in interest rates.

A health insurance enterprise must set up the following operational reserves:[19]

1. Actuarial Reserve or Mathematical Reserve: The difference between the present value of the insured sum and the present value of future premiums, to be used to pay the insured sum for committed liabilities upon the occurrence of an insured event.
2. Unearned Premium Reserve: Used to pay the insured sum likely to arise during the effective duration of an insurance policy in the subsequent year.
3. Indemnity Reserve: Used to pay the insured sum upon the occurrence of an insured event, which remains unsettled by the end of a fiscal year.
4. Balance Reserve: Used to pay the insured sum upon the occurrence of an insured event due to significant changes in mortality rates or in interest rates.

A reinsurance enterprise must set up all operational reserves that are required for the respective insurance enterprise. For example, a non-life reinsurance enterprise must set up all operational reserves that are required for a non-life insurance enterprise.

Circular 50/2017 sets out detailed instructions on how to calculate and structure these reserves.

C. Sale of Insurance Products 

For compulsory insurance products, the MOF publishes terms, premium scales, and minimum insurance amounts that an insurance enterprise must incorporate into its policies.[20] An insurance enterprise may develop its own terms for non-compulsory insurance products. These independently developed terms do not require MOF’s approval. Nevertheless, they must adhere to certain standards. The policy terms must comply with law and ethical standards. The language used must be accurate, clear, and easy to understand. Technical terms should be clearly defined. The policy must include a description of the insurable interest, the risks, the rights and obligations of both the buyer and the insured, the responsibilities of the insurer, conditions leading to exemption of liability, method of payment, and provisions on dispute resolution. Finally, premium scales must be set based on statistical data, and must protect the solvency of the insurance enterprise.[21]

Once the insurance enterprise has finalized the terms and details of the policies it intends to sell, it may sell them by direct sale, by sale through agents and brokers, by auction, or by electronic transactions.[22] Sales of insurance through any channel must comply with the regulations relevant to that channel.

D. Capital Investment

Sources of investment capital of an insurance enterprise include its own equity and idle capital from operational reserves. Investment with either type of capital must ensure the safety and liquidity of the investment and must follow legal guidelines.[23] Investment of the enterprise’s equity capital is limited to the amount that exceeds either the legal capital or the minimum solvency margin, whichever is larger.[24] Idle capital that can be invested from operational reserves is the balance of the total operational reserves after payment of regular insurance sums or regular insurance indemnities.[25]

Decree 73/2016 permits only certain forms of capital investment. A non-life insurance enterprise can invest its capital by:

1. Purchasing government bonds or corporate bonds issued by credit institutions in unrestricted amounts;
2. Purchasing corporate shares or bonds without underwriting, or capital contribution to other enterprises, with 50% or less of idle capital from operational reserves;
3. Developing real estate or lending with 20% or less of idle capital from operational reserves; or
4. Making deposits with financial organizations in unrestricted amounts.

A life insurance enterprise or a health insurance enterprise can invest its capital by:

1. Purchasing government bonds or corporate bonds issued by credit institutions in an unlimited amount;
2. Purchasing corporate shares or bonds or capital contribution to another enterprise, with no more than 50% of idle capital from operational reserves; or
3. Developing real estate or lending with no more than 40% of idle capital from operational reserves.
4. Making deposits with financial organizations in unrestricted amounts; or
5. Contributing capital to other enterprises with 20% or less of idle capital from operational reserves.

Offshore investments by an insurance enterprise must be made in accordance with the Law on Investment 2014[26], Decree 83/2015[27], Decree 135/2015[28] and Circular 105/2016[29]and must be approved in writing by the MOF.[30]

An insurance enterprise must meet the following requirements to be eligible to apply for an offshore indirect investment license from the MOF[31]:

• have been profitable for five (5) consecutive years preceding the year of the application for an offshore investment license;
• have fulfilled all financial obligations to the Government and does not have any unpaid taxes;
• have internal regulations, internal control, internal audit and analysis and administration of risks in relation to offshore indirect investment;
• follow relevant regulations on capital, investment level and indicators of financial solvency; and
• have the infrastructure, facilities and human resources to support offshore indirect investment.

An application for an offshore indirect investment must include the following documents:

• request for an offshore investment license (made using a standard form);
• internal approval following requirements in the enterprise’s Charter;
• a detailed offshore indirect investment plan, which specifies the country to which investment will be made, the projected amount of investment capital, sources of the investment capital, estimated outcomes and other relevant information;
• confirmation from the tax authorities of the fulfillment of all financial obligations to the Vietnamese Government;
• internal procedures on offshore indirect investment, including internal control, internal audit, analysis and administration of risks in relation to offshore indirect investment;
• presentation of infrastructure supporting offshore indirect investment; and
• a copy of the Chartered Financial Analyst (“CFA”) certificate and employment contract of at least one employee who will be directly involved in the offshore indirect investment.

Within 30 days of receipt of the dossier, the MOF will issue an offshore indirect investment license to the insurance enterprise and notify the State Bank of Vietnam. The MOF must provide a written explanation if the offshore indirect investment license is refused. Within 24 hours from receipt of the offshore investment license, the insurance enterprise must publish the license on its own website. The license does not have a duration attached to it, but both the insurance enterprise and the MOF can terminate the license by following procedures provided in Circular 105/2016.

E. Solvency

An insurance enterprise is considered solvent when it has established adequate mandated reserves, and when it maintains its solvency margin at a level no less than that required by Article 64 of Decree73/2016.

The solvency margin of an insurance enterprise is the difference between total assets and outstanding liabilities at the time the solvency margin is calculated.[32] Assets used for calculation of the solvency margin of an insurance enterprise must be liquid. Circular 50/2017 provides a method for calculating assets for purposes of determining the solvency margin.[33]

Decree 73/2016 sets the minimum solvency margin level differently according to the insurance products the enterprise offers. If the enterprise provides non-life insurance, the minimum solvency margin is the greater of either: (a) 25% of the total insurance premium actually retained at the time the solvency margin is calculated; or (b) 12.5% of the total principal insurance premiums plus reinsurance premiums at the time the solvency margin is calculated.[34]

For unit-linked insurance policies, the minimum solvency margin is 1.5% of the operational reserve plus 0.3% of the sums insured. For universal life insurance and retirement insurance policies, the minimum solvency margin is 4% of the operational reserve plus 0.3% of the sums insured. For life insurance, the minimum solvency margin depends on the length of the contract. If the term is five years or less, the minimum solvency margin is 4%. If the term is greater than five years, that margin is 4% of the operational reserves plus 0.3% of the sums insured.

If an insurance enterprise does not maintain appropriate solvency margins, it will be considered insolvent. An insurance enterprise is considered in danger of insolvency when its solvency margin is less than the minimum solvency margin.[35] In such case, the insurance enterprise must take immediate measures to restore its solvency. It must report to the MOF on its actual financial status, causes of the risk, and its plans to restore its financial security.[36]

If an insurance enterprise cannot restore its security by itself, the MOF may request it to take one of the following steps: supplement its own capital; seek reinsurance with other insurance enterprises, narrow its scope of services and business activities, or suspend some or all of its activities; consolidate the enterprise’s organizational apparatus or replace management personnel; and transfer insurance policies to other enterprises.[37] If all of these measures fail, the enterprise may be put under special control and the MOF will set up a solvency control board to take steps to restore solvency.[38] The solvency control board is permitted to take action to restore solvency, and the enterprise must implement its decisions.[39]

The LOIB requires an internal fund to be established in order to protect the insureds in the event of an insurer’s bankruptcy or insolvency. Such fund is sourced from a percentage of the premiums received. Details on the establishment (including the relevant percentage of premiums), management, and use of the reserve fund are provided in Decree 73/2016.[40]

F.  Reporting Requirements

Insurance enterprises must comply with various reporting requirements. They must prepare and submit audited financial statements, statistical reports, and operations reports to the MOF.[41] The financial statements must include balance sheet, profit and loss statement and explanations of the financial statements. The statements must be submitted on a quarterly and annual basis.[42]

The contents of the statistical and operations reports depend on whether the enterprise provides life insurance or non-life insurance. For a non-life enterprise and a foreign branch, the report must include: monthly operations report; quarterly and annual revenue report; quarterly and annual target report; quarterly and annual insurance compensation; quarterly and annual provision - setting report; quarterly and annual investment operations report; quarterly and annual solvency report; and an annual Association of Southeast Asian Nations (“ASEAN”) report.

For a life insurance enterprise, the report must include: a monthly operations report; both quarterly and annual reports on the number of contracts and life insurance amount; both quarterly and annual reports on life insurance premium revenue; quarterly and annual reports on premium payment; quarterly and annual reports on life insurance policy cancellation; quarterly and annual provision setting reports; quarterly and annual investment operations reports; quarterly and annual solvency reports; an annual ASEAN report; a report on fund splitting and interest division; and both quarterly and annual reports on cross border insurance services activities.

For a reinsurance enterprise the report must include: quarterly and annual reports on reinsurance revenue; quarterly and annual reports on compensation and premium payment of the reinsurance enterprise; quarterly and annual reports on professional provision, using the standard forms of non-life insurance enterprises (for the operation of non-life insurance and health reinsurance),or using the standard forms of life insurance enterprises (for the operations of life insurance); quarterly and annual investment operations reports; quarterly and annual solvency reports.[43]

G. Representative Office and Branch of Foreign Insurance Enterprises

Representative office of a foreign insurance enterprise

A foreign insurance enterprise may open a representative office (“RO”) in Vietnam. The RO is a unit set up by a foreign business enterprise under Vietnamese law to research the market.[44] The RO cannot transact business and is not regarded as a Vietnamese insurance enterprise. It may not receive payment in Vietnam for services or goods provided either in Vietnam or offshore. It may not generate revenue by providing goods or services.

In addition to performing market research, an RO may act as a liaison, prepare investment projects for the foreign parent insurance enterprise, and promote and monitor implementation of those projects.[45] Moreover, the chief representative of the RO may sign contracts acting through a power of attorney from the offshore parent. The power of attorney, however, must clearly state that the chief representative acts on behalf of the parent and not the RO.

A foreign insurance enterprise that wishes to establish an RO must satisfy the following conditions: it must have been in operation in its home country for at least five years, and it must have a cooperative relationship with Vietnamese organizations and agencies.[46] It must file an application dossier with the MOF to obtain a license to establish an RO in Vietnam (“RO License”). An RO of a foreign insurance enterprise can have a duration of five years, which is renewable. An RO of a foreign insurance enterprise can be terminated in certain circumstances as set out in Decree 73/2016.[47]

Branch of foreign insurance enterprise

A foreign non-life insurance enterprise is permitted to open a foreign non-life insurance branch (“Insurance Branch”). The Insurance Branch is a dependent unit of the foreign non-life insurance enterprise, and is not a legal entity in Vietnam. The foreign non-life insurance enterprise will be responsible for all obligations and commitments of its Insurance Branch in Vietnam.[48] A foreign life insurance enterprise is not allowed to open a branch in Vietnam.

To establish an Insurance Branch, the foreign non-life insurance enterprise must satisfy the following criteria:

• its head office is located in a  country with which Vietnam has a relevant agreement;
• it has been operating in its country for at least 10 years;
• it has minimum total assets of VND 2 billion (equivalent to US$ 90,000) during the latest financial year;
•  it has been profitable for the three consecutive years preceding the year of its application;
• it has had no serious legal infraction for three consecutive years preceding the year of its application; and
• other conditions as set out in article 8 of Decree 73/2016.

The MOF licenses the Insurance Branch,[49] which is not permitted to establish a dependent sub-branch in Vietnam.[50] Details on establishment, business operations, amendments required to be registered, the financial regime, and reporting obligations of the Insurance Branch are provided in Decree 73/2016. Other than a different minimum legal capital requirement, which is mentioned in Table 1, and a different application dossier when applying for a License,[51] an Insurance Branch is treated as a non-life insurance enterprise and must comply with the requirements applicable to a non-life insurance enterprise.

V.        Reinsurance

An enterprise may cede part of the liability it has agreed to insure to one or more insurance enterprises, but may not cede the entire liability. When an enterprise assumes the reinsurance liability of another enterprise, it must examine the risk to ensure that the new liability does not exceed its financial capacity.[52] An enterprise assuming the reinsurance liabilities of another enterprise must meet certain criteria, such as it must be rated “BBB” by Standard & Poor or Fitch, “B++” by A.M.Best or “Baal” by Moody’s or any equivalent ratings from a reputable credit rating agency.[53] A reinsurance program must identify the ability of the enterprise to accept risk, identify types of reinsurance most appropriate to manage those risks, and establish criteria to select appropriate reinsurance policies. The enterprise must develop internal regulations for the underwriting process, set rules and aggregate liability for each product, and identify the limit of liability to be insured. The laws also provide guidance to compute the retention level for each type of insurance and each type of risk. The level of liability per single risk or loss is capped by law at 10% of the enterprise’s own capital. Liability in excess of the maximum 10% must be ceded through reinsurance.[54]

An insurance enterprise may reinsure with either Vietnamese or with foreign reinsurance companies. Many policies involving high risk industries, such as in the marine, aviation, oil and gas, and construction business, are reinsured offshore, even if they are underwritten by Vietnamese enterprises.

VI.  Agents and Brokers

A. Agents

An insurance agent offers and sells insurance, arranges or concludes insurance policies, and undertakes other activities related to the performance of an insurance policy. The agent must be authorized by insurance enterprises to carry out these activities on behalf of the enterprise.[55] The agent must be a Vietnamese national, must have full civil capacity, and must have received training from an institution accredited to train and certify insurance agents.[56] The agent must enter into an insurance agency agreement and act exclusively for only one insurance enterprise.[57]

Insurance agents may not pressure customers to cancel valid insurance policies. They must provide clear and accurate disclosure and explanations of policy terms and obligations. They may not mislead customers or exert undue influence in their choice of insurance products. They must not conduct any wrongful activities such as threatening, bribing or enticing the employees or customers of other insurance enterprises.[58]

An insurance enterprise must provide its agents with all information necessary to enable them to provide appropriate services to buyers. They are also entitled to receive commissions.[59] By “commissions” we mean amounts paid by insurance enterprises directly to insurance agents in return for services they provide to the insurance enterprises. Circular 124/2012 has schedules that provide the maximum rates of insurance commission, but they should be used as a reference only as the Circular has expired and not yet been replaced.

Insurance enterprises may select agents with whom they wish to enter into agency contracts, and set their commission rates in those contracts. They may receive and manage deposits or assets that agents have mortgaged as security under the agency contract.

It is required that an agent have a practicing certificate issued by a training establishment approved by the MOF. The MOF regulates the program, content and form of training required to obtain this certificate.

B. Brokers

A broker is an insurance brokerage enterprise that provides information on types of insurance, policy terms and premiums, and general information on insurance enterprises to its customers who wish to purchase insurance.[60] The broker usually helps the insurance buyer assess risk management, select suitable insurance products, and negotiate and conclude insurance policies.[61] A broker works for and is paid by the insurance buyer, rather than an insurance enterprise.

In order to be licensed, an insurance brokerage enterprise must meet capital requirements established by the Government, submit documents such as a draft charter and five year business plan, and provide evidence that its executives and managers have appropriate qualifications. The law allows foreign invested enterprises to engage in the brokerage business in the form of joint ventures or 100% foreign owned companies. An insurance brokerage enterprise is entitled to receive brokerage fees. The fees may be included in the insurance premium.[62] The law requires the broker to provide honest services, and not to disclose or provide information that damages the insurance buyer’s rights.[63]

VII. Conclusion

The formation of the AEC and the execution of the CPTPP agreement, together with the already challenging WTO commitments are pushing for a more open market for goods and services and as a result, a more competitive insurance market. Competition will continue to encourage development of new insurance products. Firms may explore creative packaging of existing products. The industry has already seen the advent of new products that integrate insurance and investments, that appeal to consumers with rising personal incomes. An increased variety of insurance products will create new regulatory challenges.

Similarly, to meet the expectations of consumers who increasingly rely on the internet to obtain information and to manage their personal business, insurance enterprises may begin to offer more services online. This will present new challenges for regulation of disclosure requirements and transparency.

With increased competition comes a heightened responsibility for insurance enterprises and the Government to develop rules of professional ethics. Government regulations consistently demand disclosure and transparency, and prohibit anti-competitive practices.2016 and 2017 marked an important period for law makers and the insurance industry as many core laws were approved, with a material effect on the industry. The system of supplementing documents has been reduced substantially. With the legal system becoming more and more transparent and the market becoming more and more competitive, it is essential that insurance enterprises, both domestic and foreign, monitor their internal operations and their industry in order to maintain a certain set of standards and to survive and thrive in the near term.