Foreign non-life sector faces curbs in step-by-step opening of market

The country will continue to restrict market access to foreign companies offering non-life insurance indefinitely, according to a senior finance official.

Foreign companies offering life products continue to enjoy unfettered access to Vietnam's population of close to 80 million, but Pham Thi Tuat, director of the Department for Banking and Financial Organisations said non-life companies would be allowed only to do business with other foreign entities.

'Our policy is to open the insurance market step-by-step,' she told the Vietnam Investment Review.

'The opening of the market here must be consistent with the development level of the economy and the industry itself. We cannot open the whole market and allow everyone to come rushing in at once.

'With 40 foreign insurance representatives in Vietnam, it will not be possible for all or even a large number of them to be franchised to sell their policies here next year,' she added.

The policy is consistent with mainland insurance regulations, but the announcement drew criticism from foreign players in Vietnam's market who allege it is designed to protect the monopoly of domestic companies.