Guide for Insurance Sales, Advisory and Distribution | Vietnam | Asia Pacific Insurance | Baker McKenzie Resource Hub

Yes. There is no overarching prohibition on paying sales-based commissions to appointed agents. However, the following limitations apply:

a. Agents’ commissions: Insurers must pay agents commission at a maximum rate calculated according to the received insurance premium of each insurance contract. The maximum rate of commission varies depending on the types/classes of products involved.

• For non-life insurance, the maximum commission is 5% for compulsory fire and explosion insurance, 20% for motor owner’s civil liability insurance, 10% for voluntary fire and explosion insurance, and 0.5% for aviation insurance.
• For life insurance, the commission may vary throughout the term of the policy. In the case of individual term life insurance, for instance, the commission shall not exceed 40% of the first year’s premium, 20% of the second year’s premium, and 15% of the premium for succeeding years. For group life insurance policies, the maximum commission rate is half of the corresponding rate applicable to life insurance provided to individuals.
• For health insurance, the maximum rate of commission is 20%.

b. Brokers’ commissions: The maximum rate of brokerage commission of each insurance operation/class under each insurance policy contract is 15%. This rate is calculated based on the amount of premiums as actually collected by insurers.