On 5 May 2023, the Government enacted Decree 21/2023/ND-CP on microinsurance. This marks the first time microinsurance products have been comprehensively regulated by the Government, and was introduced after the Law on Insurance Business was passed in 2022. According to lawmakers, the decree was enacted to develop an effective microinsurance landscape, allowing for greater access to insurance by low-income individuals.
The Law on Insurance Business defines microinsurance as insurance aimed at low-income individuals and households to protect them against life, health and property risks.
The decree prescribes caps on the chargeable premiums and insurance terms for such products. For example, premiums are capped at 5% of the annual per capita income of the near-poverty households in urban areas, and must be suitable to the insurance benefits.
It also introduces the licensing, organisation and operational framework for mutual microinsurance organisations for the first time.
