Modernizing Duty of Disclosure in Insurance Law in Vietnam’s Transitioning Economy: The Need for a Policyholder-Centric Approach

Inspired by the pro-market ideology of Western countries, since 1986 Vietnam’s Doi Moi era has driven extensive legal reforms aimed at adapting to a burgeoning market economy and facilitating the country’s integration into the global economic landscape. ⁽⁹⁾ To support this goal, Vietnamese legislators focused on developing a comprehensive private law system. This included creating and improving laws related to property rights, and economic fields such as contract law, commercial law, enterprise law, and investment law. ⁽¹⁰⁾ These legal reforms played a crucial role in attracting domestic and foreign investment, stimulating economic growth, providing the foundation for developing a dynamic private sector and encouraging entrepreneurship in Vietnam. ⁽¹¹⁾

In contract law, legislators started recognizing the importance of respecting the freedom of contract, adopting a more hands-off approach and seldom interfered with contracts made by parties. ⁽¹²⁾ The shift in the legislators’ mindset reflected a desire to align Vietnam’s economic policies with the principles of market economics. The emphasis lies on the significant importance of the will theory as the sole basis for enforcing a contract, thereby ensuring the fairness of outcomes. ⁽¹³⁾

During the 2000s, Vietnam strongly upheld the principle of freedom of contract in shaping its insurance laws. Following the abolition of the state monopoly held by the sole state-owned insurer, the country sought to modernize its insurance industry and attract foreign investment. At that time, the sector of insurance was still in its infancy, governed by sparse and rudimentary legislation. ⁽¹⁴⁾ Due to limited expertise, Vietnamese legislators refrained from enacting detailed regulations, instead encouraging self-regulation through voluntary market transactions between insurers and policyholders. Prioritising the principle of freedom of contract was seen as a key strategy for fostering market growth. The initial comprehensive insurance legislation in 2000 (LOIB 2000) was in line with this economic strategy when its Article 5 stated that Vietnam aims to attract foreign investors by encouraging insurance and brokerage companies to invest capital in Vietnam, reinvest profits to support socio-economic development, and strengthen international cooperation to enhance business efficiency. ⁽¹⁵⁾ Foreign insurers were eager to seize the economic expansion opportunity, especially in the life insurance sector. ⁽¹⁶⁾

The transition to a market-based economy, grounded in the principle of freedom of contract, marks a significant milestone in Vietnam’s socio-economic and legal development. The enactment of the LOIB 2000 underscored the country’s commitment to leveraging international cooperation and market mechanisms to protect investor interests and stimulate domestic investment. As a result, investor and insurer protection became the central focus in shaping insurance law during the early development of Vietnam’s insurance industry, granting insurers the freedom to design and develop insurance products in the Vietnamese market.

The insurer-centric approach in making insurance law was influenced by the traditional approach of insurance law around the world, in which the insurer was regarded as the party in need of protection. ⁽¹⁷⁾ This was largely due to the assumption that insurers faced significant risks from a policyholder’s non-disclosure or misrepresentation. This perspective stemmed from the belief that policyholders held critical information about the insured risk that could disadvantage insurers if not fully disclosed. ⁽¹⁸⁾ The policyholder was considered to be in the best position to provide information related to the insured subject and the transaction during the pre-contractual stage, which is essential for minimizing transaction costs. ⁽¹⁹⁾ During the development of insurance law, lawmakers aimed to nurture the fledgling industry, acknowledging its close resemblance to gambling. ⁽²⁰⁾ This fostered a systematic suspicion of policyholders, prompting laws to prevent fraud or manipulation. ⁽²¹⁾ As a result, policyholders were strictly required to disclose all material facts and avoid misrepresentation when forming an insurance contract. Any breach of this duty during the pre-contractual phase could lead to contract avoidance and allow insurers to deny claims. These requirements relating to the duty of disclosure are traditionally universal to insurance law. ⁽²²⁾ As a result, traditional insurance law was primarily designed to protect insurers, seen as the vulnerable party in need of safeguarding. This framework placed the burden of information disclosure on policyholders, driven by the logic of risk transfer: policyholders, as the ones with knowledge of the risk, were obligated to fully disclose relevant details to the insurer, who otherwise lacked knowledge of the true nature and extent of the risk.

However, the traditional universal approach often overlooked the disparity in knowledge and bargaining power between insurers and individual policyholders in the contemporary context, ⁽²³⁾ leading to calls for reform in the developed insurance markets such as the United Kingdom and Germany to better balance the interests of both parties. ⁽²⁴⁾ These reforms in the first two decades of the twentieth century have been significant, shaping legal reforms in other jurisdictions, a topic explored further in Section IV.

In sum, Vietnam’s early transition to a market-based economy naturally produced an insurer-centric regulatory framework—one that emphasized freedom of contract, relied heavily on voluntary market mechanisms, and prioritized insurer and investor confidence as key drivers of economic development. This orientation aligned with global historical patterns and reflected the practical needs of a young insurance industry seeking capital, expertise, and stability. Yet as the Vietnamese insurance market expanded and matured, the limitations of this traditional model became increasingly visible, particularly given the persistent information asymmetries and bargaining disparities faced by individual policyholders. Doctrines designed primarily to mitigate adverse selection and safeguard insurers grew progressively out of step with the realities of a rapidly evolving consumer market.

These emerging tensions did more than expose the shortcomings of an insurer-centric system—they laid the groundwork for a broader reconceptualization of the regulatory philosophy itself. As Vietnam confronted rising disputes, declining consumer trust, and shifting international standards, it became clear that the early insurer-focused approach could no longer meet the demands of a modern insurance market. This recognition directly catalyzed the rise of consumer protection as a central regulatory concern and set the stage for the growing reliance on standard form contracts—developments that Subsection B examines in detail.

Before 1986, under the centrally planned economy, the concept of consumer rights was virtually non-existent in Vietnam. ⁽²⁵⁾ The state controlled major enterprises in essential sectors such as electricity, water, transportation, banking, healthcare, and education. Goods and services were distributed through a coupon system, leaving little room for consumer choice or market-driven protections. As a result, there was no legal framework recognizing consumers or safeguarding their interests.

However, as Vietnam transitioned to a market-oriented economy, particularly in the 2000s, consumers began to play an increasingly vital role in the marketplace. Although the evolution of the consumer protection law in Vietnam’s transitioning economy emerged later than in developed markets, ⁽²⁶⁾ it aligns with the broader trend of legal updates favoring consumers. In the early 2000s, statutory provisions were introduced to impose greater responsibilities on businesses, aiming to enhance consumer rights and protections. ⁽²⁷⁾ These early regulations laid the foundation for a more structured consumer protection framework. The evolution of consumer protection law continued in 2005 as standard form contracts (SFCs), ⁽²⁸⁾ typically written by the traders, became widely used in commercial transactions and were commonly employed by sellers and traders during Vietnam’s booming market economy.

In Vietnam, the existence of SFCs was first acknowledged in the Civil Code in 1995 and further recognised in subsequent revisions in 2005 and 2015. ⁽²⁹⁾ SFCs were prevalent across various industries, such as real estate, electricity, telecommunications, and banking. As explained by the Drafting Law Commission in the Law on Protection of Consumer Rights (2010), SFCs can be used for multiple transactions, promoting economic efficiency by reducing transaction costs, offering certainty, and minimizing misunderstandings between parties. ⁽³⁰⁾ SFCs often contain terms and conditions predetermined by the dominant party, usually goods sellers or service providers with stronger bargaining power. This has raised concerns about “unequal bargaining power.” ⁽³¹⁾ Building on this context, a major milestone was reached in 2010 with the enactment of the Consumer Protection Law (CPL) 2010, which replaced previous regulations. The CPL 2010 introduced comprehensive consumer rights, product liability provisions, and stricter rules governing SFCs and general trading conditions. The overhaul of the CPL in 2023, driven by the rapid expansion of digital commerce, reinforced these protections and further emphasized the need to balance market growth with consumer rights, advancing a more transparent and equitable business environment. ⁽³²⁾

The legislative reforms in Vietnam marked a significant shift in lawmakers’ awareness, embracing a pro-consumer philosophy in response to the limits of classical contract law. Through state intervention, regulatory measures, and judicial safeguards, legislators aimed to address imbalances in bargaining power and enhance transparency, ensuring stronger consumer protection. The growing prevalence of SFCs and rising consumer awareness in a developing market economy drove a paradigm shift in contract law, prioritizing fairness and protection for consumers.

This pro-consumer orientation has directly shaped the reform trajectory of insurance law, particularly in consumer insurance where policyholders are individuals. Nearly 25 years after the first enactment of the LOIB, the market now reflects the increasingly dominant position of insurers in drafting policy terms and controlling the negotiation process. As a result, policyholders—whether individual consumers or sophisticated commercial actors—continue to encounter fundamental challenges stemming from inherent disparities in information, knowledge, and expertise. The consumer-protection philosophy therefore becomes even more critical, guiding both current and future reforms of insurance law toward a model that reduces information asymmetry and strengthens the legal safeguards available to insureds in consumer insurance contracts.

In Vietnamese insurance markets insurance policies are SFCs designed and translated into Vietnamese by foreign insurers who dominate the market. For example, in the life insurance sector, the dominant insurers are from developed countries like the UK and US. Consequently, the terminology and expressions used in the life policies can be long and difficult for policyholders to grasp, regardless of whether they are individuals or entities. ⁽³³⁾ In the life insurance sector, policies designed by insurers must be registered and reviewed by the Vietnamese Ministry of Finance before being sold in the market. ⁽³⁴⁾ Formal control of policy content may assist policyholders in understanding the contract and reducing unfair terms when policyholders do not have equal bargaining power with insurers. However, the ex-ante administrative review mechanism faces challenges due to a lack of specialists in the insurance field, making it superficial. ⁽³⁵⁾ In the non-life insurance sector, although insurers design policies without authority review, there is still a risk for policyholders to encounter unfair terms. This asymmetry can lead to situations where insurers abuse their power to exploit policyholders. Prospective policyholders, particularly individuals, have limited ability to influence or negotiate the contract terms.

In this landscape, several key areas of Vietnam’s insurance law remain under review and are expected to evolve to further safeguard consumers. The momentum toward a pro-consumer philosophy is increasingly evident: ongoing reforms aim to enhance transparency during the pre-contractual phase, ensuring that policyholders receive clear, accurate, and accessible information before committing to an insurance policy. Strengthening these information duties is essential not only for addressing longstanding asymmetries in expertise and bargaining power between insurers and policyholders but also for mitigating the risks inherent in the widespread use of standard form insurance contracts. Ultimately, by prioritising fairness, accountability, and substantive protection throughout the entire insurance lifecycle, the modernised legal framework seeks to foster a more equitable insurance market—one that aligns with Vietnam’s broader transition toward a consumer-centred regulatory environment.

Vietnam’s relatively young insurance market presents challenges for prospective policyholders, whether they are individuals or sophisticated commercial entities, due to limited knowledge of insurance. Behavioral studies on Vietnamese policyholders indicate that the policyholders primarily focus on costs, policy restrictions, deductibles, the insurer’s reputation, and a few specific coverage provisions, often neglecting other critical terms when they make decisions to buy insurance. ⁽³⁶⁾ This limited understanding contributes to breaches of the duty of disclosure, as policyholders may struggle with insurance terminology in questionnaires, contracts, and pre-contractual obligations. ⁽³⁷⁾ Policyholders tend to rely heavily on insurance agents or the insurer’s staff and place their trust in personal relationships with them, which can lead to disputes. Moreover, some sales staff and insurance agents lack a comprehensive understanding of the insurance products they sell, leading to inaccurate or misleading advice being provided to consumers during the purchasing process. ⁽³⁸⁾ As a result, consumers may not fully understand what is covered under their insurance policy.

Notably, the new LOIB, which took effect on January 1, 2023, has not been effective in reducing the volume of disputes brought by policyholders regarding pre-contractual information duties. The persistent issue of misselling in bancassurance during 2023 and 2024 has further eroded public confidence in the insurance sector. ⁽³⁹⁾ This situation has highlighted the inadequate disclosure of information to policyholders, preventing them from making well-informed decisions before entering insurance contracts and leaving many unaware of the terms and conditions outlined in their policies.

Amid growing social pressure to change the law to reduce disputes and enhance public trust in the insurance industry, the Vietnamese Ministry of Finance (MoF), responsible for overseeing the insurance market, revised regulations to safeguard long-term interests and maximize insurance accessibility. ⁽⁴⁰⁾ The latest strategy to develop Vietnam’s insurance market by 2030 ⁽⁴¹⁾ aims to perfect the legal system and policies on insurance comprehensively, transparently, and equally, aligning with international standards and practices. To achieve the 2030 goals, the government must keep taking significant steps towards enhancing policyholder’s trust in insurance through the enactment of pro-policyholder legislation and safeguarding the interests of the disadvantaged contracting party in insurance transaction.

While the new LOIB incorporates the principle of utmost good faith governing the pre-contractual duty of disclosure and information and makes some minor adjustments to remedy inconsistencies in handling breaches of the duty not to misrepresent, the fundamental provisions remain largely unaltered. As a result, the law still falls short in providing robust protection for policyholders, leaving critical gaps that need further reform.

First, the law did not clarify the scope of the material information in the duty not to misrepresent by the policyholder, which is limited to the risked objects or extending to any information in the insurance contract requested by the insurer. Any wrong answer to the immaterial questions in the application form can lead to a breach of the duty. In two separate cases, the policyholder falsely answered “No”to the question “Does the applicant have life insurance policies at different insurance companies?” despite holding multiple policies with different insurers. In the 12 April 2021 appeal, ⁽⁴²⁾ the provincial court ruled that the policyholder had breached the duty of disclosure under the LOIB, making the contract void ab initio, and thus, the insurer had no obligation to indemnify. However, in the earlier 2 February 2021 judgment, ⁽⁴³⁾ the same provincial court held that the policyholder only needed to disclose information related to personal status and health. The varying rulings in these cases highlight how the court’s discretionary authority has led to uncertainty and unpredictability in the interpretation and determination of breaches of the duty of disclosure.

Vietnam’s insurance law should introduce a materiality or reliance test, requiring insurers to prove a breach of the duty of truthful disclosure and representation. Under this test, the insurer must demonstrate that the misrepresentation or non-disclosure is material to the decision to accept the policy, meaning it would influence the judgment of a prudent underwriter. If the misrepresentation or non-disclosure is not material and does not affect the insurer’s decision, it cannot be considered a breach of the duty.

Second, the old and new LOIB adopts the “all or nothing” approach to the payment of insurance money in addressing the issue of policyholder’s misrepresentation. The insurer may avoid the contract regardless of whether the insured was fraudulent, intentional, grossly negligent or innocent in his failure to provide a material fact. The innocent misrepresentation is currently treated the same as the fraudulent or intentional misrepresentation. The sole remedy of avoidance in the event of a breach of the duty of disclosure and representation is harsh and allows an insurer to reject the whole claim even if they would have accepted the risk if they were given full disclosure, albeit at a higher premium. Legal scholars have called for reform for the purpose of creating fair treatment for insureds by clarifying the conditions required under the duty of representation. ⁽⁴⁴⁾ Specific questions include whether Vietnamese insurance law should adopt the doctrine of proportionality, and the materiality test to examine the way in which Vietnamese courts determine the occurrence of a breach of the duty, whether a breach occurs intentionally or by gross negligence.

Third, there is a need for stronger enforcement of the insurer’s duty to interpret the terms and conditions for the potential policyholder preceding the conclusion of the insurance contract. Because insurers have an informational advantage over the insured regarding the benefits and indemnity available under the insurance, policyholders need to receive clear explanation of policy terms and adequate advice to assess whether to get the insurance, and if so on what terms and at what premium.

The analysis highlights the need for clearer standards in determining breaches of the duty of disclosure, limiting contract rescission for non-disclosure, and strengthening insurers’ obligations to ensure transparent pre-contractual information. It underscores the urgent need for legislative reform to enhance consumer protections and restore balance in modern insurance markets.

For centuries, the evolution of insurance contract law was slow and largely unaffected by sudden shifts. However, since the early 21^st century, two major developments have transformed insurance law and practice: the emergence of big data technology and significant reforms in insurance contract law. ⁽⁴⁵⁾ Ongoing reform efforts in insurance contract law across various common and civil law regions have focused on safeguarding consumer benefits in insurance dealings. A significant recent change involves the policyholder’s pre-contractual duty of disclosure, which has undergone substantial revisions. ⁽⁴⁶⁾

Among common law jurisdictions, the UK led the reform of the duty of disclosure in the insurance law, influencing other common law jurisdictions. The English and Scottish Law Commissions began reviewing insurance contract law relating to the disclosure obligations of the policyholder and proposed relevant reforms in 2006. ⁽⁴⁷⁾ This led to legal reforms in the duty of utmost good faith in both consumer and business insurance in the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) and the Insurance Act (IA) 2015.

Accordingly, there is a distinction between consumer insurance and business insurance concerning the policyholders’ duty of disclosure between the CIDRA and the IA. The CIDRA removes the duty of disclosure insofar as it required the consumer to volunteer information that they have not been first asked to provide and shifts to a new duty to take reasonable care in the light of all the relevant circumstances. This means that insurers must rely only on information drawn from direct questions put to the insured. Different from the CIDRA 2012, the IA 2015 introduced a new duty of fair presentation in both commercial and non-consumer (business) insurance contracts in its section 3(1). ⁽⁴⁸⁾ This duty requires the insureds to disclose every material circumstance they know or ought to know, or to provide sufficient information to put the insurer on notice to make further inquiries. The approach in the IA combined inquiry-based disclosure and traditional voluntary disclosure which ensures that insureds are fully aware of their obligations and reduces the likelihood of disputes arising from misunderstandings. Failure to respond to the insurer’s request to confirm or amend information supplied may be considered misrepresentation under the CIDRA. ⁽⁴⁹⁾ Section 3(2) provides a non-exhaustive list of factors that may be taken into account when determining if the duty has been broken. ⁽⁵⁰⁾ Furthermore, a policyholder’s failure to fulfil this duty will not usually give insurers the right to rescind the contract but will allow for a proportional remedy such as scaling down a claim payment.

The transformation of insurance law in Australia began earlier than in the UK, taking root in the mid-1980s following the publication of the Australian Law Reform Commission (ALRC) report in 1982. ⁽⁵¹⁾ This led to enactment of the Insurance Contracts Act (ICA) 1984, which was further revised by the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth), effective from 11 January 2021. The latest reform, influenced by the UK insurance law reform, simplified the consumer’s duty of disclosure by introducing a consumer duty to take reasonable care not to make a misrepresentation when entering into, renewing, extending, varying, or reinstating an insurance contract. Additionally, related to the consequences of any misrepresentation, an insurer will need to show not just that a representation made by the consumer was factually incorrect, but that the misrepresentation resulted from the consumer’s failure to take “reasonable care” when responding to the insurer’s questions. ⁽⁵²⁾ These reforms reduce the policyholder’s disclosure burden while placing greater responsibilities on the insurer.

Among civil law countries, reforms also aim to provide stronger protection for policyholders, ⁽⁵³⁾ Germany pioneered reforms regarding policyholders’ pre-contractual duties of disclosure and consequences of policyholders’ duty breach, when the German federal government set up a commission to review insurance contract law in 2000. ⁽⁵⁴⁾ The new Insurance Contract Act (VVG) came into effect on 1 January 2008 providing policyholders with protection aligned with modern consumer law concepts. ⁽⁵⁵⁾ The new law recommended substantial changes, adoption of inquiry-based disclosure instead of voluntary disclosure, and abolition of the “all or nothing” principle which often led to unfair results. ⁽⁵⁶⁾ Policyholders who breached their policy obligations intentionally were not entitled to any claim under the insurance policy, whereas in cases of negligence the insurer had to pay the full amount, and the new law requires payment of claims in cases of recklessness but will be reduced depending on the policyholder’s degree of responsibility. ⁽⁵⁷⁾

Amidst the wave of legal reforms, several EU countries, including France, ⁽⁵⁸⁾ Spain, ⁽⁵⁹⁾ Italy, ⁽⁶⁰⁾ Sweden, ⁽⁶¹⁾ have undertaken significant reforms to the duty of disclosure. Equivalent rules are found in the Principles of European Insurance Contract Law (PEICL), ⁽⁶²⁾ which is more consumer-friendly in terms of obligations. ⁽⁶³⁾ In terms of the consequences for breaching disclosure obligations, the all or nothing approach was abolished and replaced by the principle of proportionality.

Beyond Europe, some Asian jurisdictions have also embraced reform. Japan’s 2010 amendments to the Insurance Act enhanced consumer protection by adopting a similar protective stance, and requiring insurers to ensure policy clarity, ⁽⁶⁴⁾ while South Korea’s reforms to the Commercial Act imposed stricter transparency obligations on insurers at the underwriting stage. ⁽⁶⁵⁾ In Singapore, significant reforms to its insurance law were built upon the recommendations from the Singapore Academy of Law’s Law Reform Committee’s 2020 report published on 28 February 2020. ⁽⁶⁶⁾ The report calls for codifying Singapore’s insurance laws into a single piece of legislation modelled on the CIDRA 2012 and the IA 2015. ⁽⁶⁷⁾

In brief, recent legal reforms in insurance law across several jurisdictions reflect a trend toward modernizing insurance legislation in favor of the policyholder. These reforms increasingly aim to protect insurance consumers, including policyholders, insured individuals, and third-party beneficiaries, by introducing various protective measures inspired by consumer law principles. ⁽⁶⁸⁾ Notable changes include the reform of the policyholder’s duty of disclosure during the pre-contractual phase through an inquiry-based model and the abolition of the “all or nothing” approach in remedies for breaches of this duty. These reforms significantly enhance the protection of policyholders. The aim of a pro-consumer insurance law framework is not to stifle the insurance industry but to foster a balanced relationship between insurers and policyholders and enhancing the transparency in information exchange.

The reform of insurance law in Vietnam does not occur in isolation but is influenced by global trends in consumer protection and market regulation. Lessons from established legal systems provide valuable insights for shaping a more balanced and policyholder-friendly legal framework. As a country with a rich history of legal borrowings, ⁽⁶⁹⁾ Vietnam is well positioned to incorporate foreign legal principles, particularly when such solutions may help to address the policyholder’s weaker bargaining position and enhance transparency in information exchange with insurers.

Vietnam’s legal system has evolved under diverse foreign influences, shaped by its historical position at the intersection of Confucian and Southeast Asian traditions. ⁽⁷⁰⁾ Due to historical influences, Vietnam’s legal framework has developed as a layered structure, with new laws overlaying older ones. ⁽⁷¹⁾ As a result, Vietnamese law reflects a diverse blend of legal traditions, where contemporary principles intertwine and coexist with traditional concepts. ⁽⁷²⁾ Advocacy for a legal framework in state governance has resulted in implementing numerous statutes over the last four decades in embracing a market-based economy. ⁽⁷³⁾ This transformation has been intertwined with the modernization of the Vietnamese legal system, especially developing contract law, business law, and commercial law. In the contract law, Vietnam experienced fundamental changes in the end of the twentieth century corresponding to profound social, political, and economic changes in Vietnamese society. Legislators were deeply inspired by Western classical contract law, which arose in the nineteenth century – the heyday of the philosophy of laissez-faire ⁽⁷⁴⁾ and later became open to the inception of pro-consumer philosophy in the Civil Code and the Law on Consumer Protection.

Due to its flexibility in legal development regardless of being a civil law follower, Vietnam has been receptive to adopting ideas and regulations from common law jurisdictions to enhance its own insurance framework. It was clearly evidenced by the fact that the country’s first Maritime Code 1990, for example, was significantly influenced by the UK Marine Insurance Act 1909. ⁽⁷⁵⁾ In the new LOIB of 2022, Vietnam incorporated the principle of utmost good faith originated from the UK as indicated in the working paper of the Drafting Law Commission. ⁽⁷⁶⁾ The Drafting Law Commission prepared comprehensive research on experiences and observation of regulations in several common law and civil law jurisdictions (such as the UK, Germany, France, Japan…) to find out the most suitable lessons for Vietnam. ⁽⁷⁷⁾

Notably, despite stemming from different legal traditions, the insurance laws of the UK and Germany have adopted a similar consumer-centric approach to reforming the duty of disclosure and information. ⁽⁷⁸⁾ The law reforms in other common law and civil law jurisdictions, as discussed in the previous section, also share a focus on enhancing protection for policyholders. ⁽⁷⁹⁾

The trend in insurance law reform to protect policyholders, seen in both common law and civil law countries, aligns with the internal pressures within Vietnam’s insurance market. To enhance consumer protection while maintaining market efficiency, Vietnam should pursue more comprehensive reforms by adopting solutions observed in foreign law reforms, using the UK as a typical jurisdiction in common law and Germany as a typical civil law jurisdiction.

One specific reform is adopting the inquiry-based disclosure to shift greater responsibility to insurers to clearly explain policy terms. While Vietnam has taken steps to incorporate inquiry-based disclosure, clearer requirements are needed to determine whether a breach of the duty of disclosure has occurred. This would help prevent insurers from misusing breach claims as a basis for denying policyholder claims. Additionally, both the UK and Germany have introduced proportionate remedies for breaches of the duty of disclosure, moving away from the harsh consequence of contract rescission. Germany’s focus on applying the same standards to both consumer and business insurance, categories shared with Vietnam, shall provide the notable impact to the inclusion of the policyholder-centric approach in reforming duty of disclosure. Germany also has further strengthened its emphasis on proactive insurer disclosure, providing a model for Vietnam in developing clearer and more transparent pre-contractual information duties. ⁽⁸⁰⁾ Integrating the lessons learned from the legal reforms in these two jurisdictions could provide valuable insights for Vietnam’s reform efforts, helping to create a pro-policyholder framework tailored to the needs of Vietnam’s evolving insurance market.