Insurers no longer permitted to engage in real estate business
Insurers no longer permitted to engage in real estate business
This is a key change in the revised Law on Insurance Business, which is scheduled to take effect on January 1, 2023.
Insurers in Vietnam are no longer permitted to use their idle capital for investing in the property business, except for purchasing shares of real estate firms listed on the stock market or fund certificates of public funds.
Customers at Bao Viet Life Company. Photo: Tran Vinh |
The Government, however, would provide specific instructions on the quota for shares and fund certificates to avoid possible risks.
This was one of the key changes in the revised Law on Insurance Business that was approved by the National Assembly on June 16 and scheduled to take effect on January 1, 2023.
While it is not possible to get directly involved in the real estate business, insurers are still allowed to purchase or own properties for office use or support insurance operation or rent business offices.
Insurers are also able to own properties previously considered as mortgages of companies issuing corporate bonds.
The new change in tightening insurers’ involvement in the real estate business is in line with regulations stipulated in the 2014 Law on Real Estate Trading and the Law on Credit Institutions.
Previously, insurers were allowed to invest a maximum of 10-20% of their idle capital in real estate business.
The revised Law on Insurance Business also requires insurers not to use capital and assets from policyholders to finance investment activities abroad.
