Improvement of Life Insurance Policyholders’ Protection Corporation with Emphasis on Consistency with the Vietnamese Market

Abstract

What is needed for the Life Insurance Policyholders’ Protection Fund in Vietnam is to review and improve its system so that it is consistent with any anticipated changes of the insurance market in Vietnam, by taking advantage of the experience of the Life Insurance Policyholders’ Protection Corporation in Japan where large scale bankruptcies have occurred in series. More specifially, the key points are: (i) introducing a scheme where contract transfer is proceeded with even in the event that no savior insurance company steps forward, and placing emphasis on the indemnifiation of coverage-based insurance products in which the market is expected to grow, (ii) increasing the burden on policyholders of conventional deposit-based products, for example, a reduction of assumed interest rates, in an effrt to increase necessary fiancial resources, (iii) developing professionals who are specialized in evaluating the values of bankrupt insurance companies and (iv) promoting thorough information disclosure and validating the soundness index.