The Principle of “Insurable Interest” for Personal Insurance Contracts in Vietnam

Abstract:

The principle of insurable interest has existed for a long time in countries with developed insurance markets. In many countries, it has been introduced in legal regulations that can regulate it entirely and strictly. In Vietnam, no law regulated it until the first Law on the Insurance Business of Vietnam was passed by the National Assembly in 2000, and recently, it was replaced by the new Law 2022. Thus, it is not easily accessible in Vietnam, especially for insurance customers in the context of changes when applying the new Law. In the article, the author employs a qualitative research methodology that collects and synthesizes secondary data from published articles and provisions in Vietnam’s legal framework to review the literature on insurable interest, which includes analyzing historical developments and legal frameworks in various jurisdictions, such as the UK, USA, and China, to provide context to the principle’s evolution and application in Vietnam. The article systematically examines the provisions of the Law on Insurance Business in Vietnam (both the 2000 and the 2022 versions), specifically focusing on the provisions regulating the principle of insurable interest. The author identifies shortcomings in the earlier legislation and discusses amendments introduced in the new Law. This legal analysis is crucial for understanding how Vietnam defines and regulates insurable interest in the personal insurance contract. The article forecasts potential opportunities and risks associated with implementing the new Law on Insurance Business 2022 provisions concerning insurable interest. It also discusses policy implications to ensure the stable development of Vietnam’s insurance market.