Vietnam Regulatory Brief: Life Insurance, Relaxing Airport Restrictions, and New Classification for Securities Trading in Vietnam - Vietnam Briefing News
New Rules for Universal Life Insurance
Circular No. 52, effective from June 1, 2016, will amend rules on universal life insurance. The rules are aimed to help life insurers expand their distribution channels. Highlights of the changes are:
- Insurance agents will just need three months of experience as life insurance agents as compared to six months before or one year of working in the field of finance, banking, or insurance as compared to two.
- The circular removed the minimum 24 hour mandate to train insurance agents, and amends the rule to whatever time is needed to train such insurance agents provided they are competent.
In addition, insurance agents must not violate any laws on operation of insurance agents and the rules on insurance agent occupation ethics. The circular also sets guidelines on the setting up of professional operation insurance reserves by life insurers.
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Liquids, Gels Allowed on Domestic Flights
The Civil Aviation Authority of Vietnam (CAAV) issued a circular effective May 1, which allows passengers on domestic flights to carry liquids, aerosols, and gels without restriction in their cabin baggage. However, for international flights the restriction on liquids in cabin baggage remains unchanged. For such flights, only one liter of liquids, aerosols, or gels is allowed on board and must be carried in bottles, vials, or containers with a capacity not greater than 100 ml in completely sealed, transparent bags. Liquid medications and baby food are exempt. Liquids from duty free shops after security checkpoints are also excluded from such exemptions, as long as they are in sealed tamper proof bags.
Officials at CAAV stated that the new rules were implemented based on the general instructions from the International Civil Aviation Organization – the UN agency – that sets standards and regulations in global air transport.
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New Classification of Stocks on UPCoM
The Hanoi Stock Exchange (HNX) has established two sets of classification of stocks on the official Unlisted Public Company Market (UPCoM) from June 24. The two categories will be UPCoM Premium – which will include stocks of companies with good financial health and transparency, and UPCoM Warning, which will include the rest of the stocks. Firms in the UPCoM Premium category must have charter capital of at least US $5.3 million, be profitable in 2015, and have no accumulated losses – or have a minimum chartered capital of U.S. $1,344,300, with a return after tax on equity of at least of five percent in 2015 with no losses. Firms listed on the UPCoM Premium must also send their financial reports to the HNX on time. Stocks on the UPCoM Premium will be allowed to participate in margin trading if they meet conditions set by the State Securities Commission.
The UPCoM Warning group will restrict stocks with suspended trading due to their losses or failure to report their financial statements. The new classifications aim to promote greater market transparency and protect the interests of investors. The UPCoM is attracting more companies with 265 companies listed last year, up 1.6 times from the previous two years. Officials say that the classification will attract more investors to the unlisted market.
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