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THE
NATIONAL ASSEMBLY
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
24/2000/QH10
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Hanoi,
December 09, 2000
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LAW
ON INSURANCE BUSINESS
(No. 24/2000/QH10
of December 9, 2000)
In order to protect the legitimate rights and
interests of organizations and individuals participating in insurance; to step
up insurance business activities; contribute to promoting and maintaining the
sustainable socio-economic development, stabilizing the people’s life; and to
enhance the effectiveness of the State management over insurance business
activities;
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam;
This Law prescribes the insurance business.
Chapter I
GENERAL PROVISIONS
Article 1.- Scope of
regulation
1. This Law shall govern the organization and
operation of insurance business and define the rights and obligations of
organizations as well as individuals participating in insurance.
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Article 2.- Application
of the Law on Insurance Business, relevant legislation, international treaties
and international practices
1. The organization and operation of insurance
business in the territory of the Socialist Republic of Vietnam must comply with
the provisions of this Law and other provisions of relevant legislation.
2. In cases where the international treaties
which the Socialist Republic of Vietnam has signed or acceded to contain
provisions different from the provisions of this Law, the provisions of such
international treaties shall apply.
3. Parties participating in insurance may agree
to apply international practices if such practices do not run counter to
Vietnamese laws.
Article 3.- Interpretation
of terms
In this Law, the following terms shall be
construed as follows:
1. Insurance business means the operation
carried out by insurance enterprises for the purpose of profit generation,
whereby the insurance enterprises accept risks incurred by the insured on the
basis of insurance premium payment by the insurance buyers so that the
insurance enterprises shall pay the insurance money to the beneficiary or
indemnify the insured when the insured events occur.
2. Reinsurance business means the operation
carried out by insurance enterprises for the purpose of profit generation,
whereby the insurance enterprises receive an amount of premium paid by other insurance
enterprises for the commitment to pay compensation for the liabilities which
the former have accepted for insurance.
3. Insurance agency activities mean the
activities of introducing, offering and selling insurance, arranging the
conclusion of insurance contracts and other activities aiming to perform the
insurance contracts under authorization of insurance enterprises.
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5. Insurance enterprises are those which are
established, organized and operate under the provisions of this Law and other
provisions of relevant legislation, for insurance or reinsurance business.
6. Insurance buyers are organizations or
individuals that enter into insurance contracts with insurance enterprises and
pay premium. An insurance buyer may also be concurrently the insured or the
beneficiary.
7. The insured means organizations or
individuals that have property, civil liabilities and/or life are insured under
insurance contracts. The insured may also be concurrently the beneficiary.
8. The beneficiaries mean organizations or
individuals designated by the insurance buyers to receive insurance money under
person insurance contracts.
9. Insurable interests mean the rights to
ownership, the rights to possession, the right to use, the property rights; the
rights and obligations to foster and provide financial support for insured
objects.
10. Insured events mean objective events
mutually agreed upon by the parties or prescribed by law upon the occurrence of
which the insurance enterprises shall have to pay the insurance money to the
beneficiaries or pay indemnities to the insured.
11. Premium means a sum of money to be paid by
the insurance buyers to insurance enterprises according to time limits and by
modes mutually agreed upon by the parties in the insurance contracts.
12. Life insurance means a class of insurance
provided to cases where the insured is alive or dead.
13. Endowment insurance means a class of
insurance provided to cases where the insured lives till a certain point of
time, whereby the insurance enterprises shall have to pay insurance money to
the beneficiaries, should the insured remain alive till the time limit agreed
upon in the insurance contracts.
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15. Combined insurance means a class of
insurance which combines endowment insurance and term insurance.
16. Whole life insurance means a class of
insurance provided to cases where the insured dies at any time during his/her
life.
17. Annuity means a class of insurance provided
to cases where the insured lives for a certain time limit; then after such time
limit the insurance enterprises shall have to pay insurance money periodically
to the beneficiaries as agreed upon in the insurance contracts.
18. Non-life insurance means a class of
property, civil liability and other insurances other than life insurance.
Article 4.- The State’s
guarantee for insurance business
1. The State shall protect the legitimate rights
and interests of organizations and individuals participating in insurance and
organizations engaged in insurance business.
2. The State shall invest capital and other
resources for the State enterprises engaged in insurance business to develop
and play the leading role on the insurance market.
3. The State shall adopt the policies to develop
the insurance market in Vietnam, the policies of preferences for insurance
operations in service of the socio-economic development objectives, especially
the programs for development of agriculture, forestry and fishery.
Article 5.-
International cooperation in the field of insurance business
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Article 6.- Basic
principles in insurance activities
1. Organizations and individuals having demands
for insurance may only participate in the insurance at insurance enterprises
operating in Vietnam.
2. The insurance enterprises must satisfy all
financial requirements in order to fulfill their commitments to the insurance
buyers.
Article 7.- Types of
insurance operation
1. Life insurance shall include:
a) Whole life insurance;
b) Endowment insurance;
c) Term insurance;
d) Combined insurance;
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f) Other life insurance operations prescribed by
the Government.
2. Non-life insurance shall include:
a) Health insurance and human accident insurance;
b) Property insurance and damage insurance;
c) Land, marine, river, railway and air cargo
transport insurance;
d) Aviation insurance;
e) Motorized vehicle insurance;
f) Fire and explosion insurance;
g) Hull insurance and ship-owners’ civil
liability insurance;
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i) Credit insurance and financial risks
insurance;
j) Business loss insurance;
k) Agricultural insurance;
l) Other non-life insurance operations
prescribed by the Government.
3. The Finance Ministry shall make a detailed
list of insurance products.
Article 8.- Compulsory
insurance
1. The compulsory insurance means a type of
insurance for which the conditions, premium rates and minimum insurance sum are
prescribed by law for compulsory implementation by both the organizations or
individuals participating in insurance and the insurance enterprises.
The compulsory insurance shall only apply to a
number of insurance types for the purpose of protecting the public interests
and social safety.
2. The compulsory insurance shall include:
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b) Professional liability insurance for legal
consultancy operations;
c) Insurance brokerage enterprises’ professional
liability insurance;
d) Fire and explosion insurance.
3. Depending on the socio-economic development
demands of each period, the Government shall submit to the National Assembly
Standing Committee other types of compulsory insurance for its prescription.
Article 9.- Reinsurance
1. Insurance enterprises may provide reinsurance
for other insurance enterprises, including foreign insurance enterprises.
2. Where reinsurance is provided for insurance
enterprises overseas, the insurance enterprises shall have to reinsure part of
the liability they have insured to domestic reinsurance enterprises as provided
for by the Government.
Article 10.-
Cooperation and competition in insurance business
1. Insurance enterprises, insurance agents and
insurance brokerage enterprises may engage in cooperation and lawful
competition in insurance business.
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a) Providing untruthful information or
advertisement on insurance contents, operation scope and terms, which cause
harms to the legitimate rights and interests of the insurance buyers;
b) Competing for customers by means of
obstructing, inducing, buying off or intimidating employees or customers of
other insurance enterprises, agents or brokerage enterprises;
c) Making illegal sale promotions;
d) Conducting other illegal competitions.
Article 11.- Right to
join socio-professional insurance business associations
Insurance enterprises, insurance agents and
insurance brokerage enterprises may join socio-professional insurance business
associations for the purpose of developing the insurance markets and protecting
the legitimate rights and interests of members under the provisions of law.
Chapter II
INSURANCE CONTRACTS
SECTION 1. GENERAL
PROVISIONS ON INSURANCE CONTRACTS
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1. An insurance contract is the agreement
reached between the insurance buyer and an insurance enterprise whereby the
insurance buyer shall have to pay premiums while the insurance enterprise shall
have to pay insurance money to the beneficiary or the indemnity to the insured
upon the occurrence of the insured event.
2. Types of insurance contract shall include:
a) Person insurance contracts;
b) Property insurance contracts;
c) Civil liability insurance contracts.
3. Maritime insurance contracts shall comply
with the provisions of the Maritime Code; for matters not prescribed by the
Maritime Code, the provisions of this Law shall apply.
4. Matters relating to insurance contracts, which
are not prescribed in this Chapter, shall comply with the provisions of the
Civil Code and other relevant law provisions.
Article 13.- Contents
of insurance contracts
1. An insurance contract must contain the
following details:
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b) The object of insurance;
c) The sum insured, the value of the insured
property for property insurance;
d) The insurance scope, insurance conditions,
insurance terms;
e) Terms on exclusion of insurance liability;
f) Insurance duration;
g) Premium rate, mode of premium payment;
h) Time limit and mode of paying insurance money
or indemnity;
i) Provisions on settlement of disputes;
k) Day, month and year of concluding the contract.
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Article 14.- Forms of
insurance contract
The insurance contracts must be made in writing.
The evidence of conclusion of insurance
contracts shall be the insurance certificates, insurance applications,
telegrams, telexes, faxes and other forms prescribed by law.
Article 15.- The time
when the insurance liability arises
The insurance liability arises when the
insurance contracts are concluded or when there appears evidence that the
insurance enterprises have accepted the insurance and the insurance buyers have
paid the premiums, except otherwise agreed upon in the insurance contracts.
Article 16.- Provisions
on exclusion of insurance liability
1. The provisions on exclusion of insurance
liability shall stipulate cases where insurance enterprises shall not have to
pay indemnities or insurance money when the insured events occur.
2. The provisions on exclusion of insurance
liability must be clearly stated in the insurance contracts. The insurance
enterprises shall have to clearly explain them to the insurance buyers when the
contracts are made.
3. The provisions on exclusion of insurance
liability shall not apply in the following cases:
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b) The insurance buyers have plausible reasons
for the late notification of the occurrence of the insured events to the
insurance enterprises.
Article 17.- Rights and
obligations of insurance enterprises
1. An insurance enterprise shall have the
following rights:
a) To collect premiums as agreed upon in the
insurance contract;
b) To request the insurance buyer to fully and
honestly supply information relating to the conclusion and performance of the
insurance contract;
c) To unilaterally suspend the performance of
the insurance contract according to the provisions in Clause 2 of Article 19,
Clause 2 of Article 20, Clause 2 of Article 35 and Clause 3 of Article 50, of
this Law;
d) To decline to pay the insurance money to the
beneficiary or to pay indemnity to the insured for cases outside the scope of
insurance liability or cases of exclusion of insurance liability as agreed upon
in the insurance contract;
e) To request the insurance buyer to take
measures to prevent or limit losses according to the provisions of this Law and
other relevant law provisions;
f) To request the third party to refund the
insurance money which the insurance enterprise has indemnified the insured for
the losses caused by the third party to the property and civil liability;
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2. An insurance enterprise shall have the
following obligations:
a) To explain to the insurance buyer the
insurance conditions and provisions; the rights and obligations of the
insurance buyers;
b) To issue to the insurance buyer the insurance
certificate, the insurance policy immediately after the conclusion of the
insurance contract;
c) To pay insurance money to the beneficiary in
time or the indemnity to the insured when the insured event occurs;
d) To explain in writing the reasons for
declining to pay the insurance money or the indemnity;
e) To coordinate with the insurance buyer in
settling the third party’s claim for compensation for the losses which fall
under the insured liability when the insured event occurs;
f) Other obligations prescribed by law.
Article 18.- Rights and
obligations of the insurance buyers
1. An insurance buyer shall have the following
rights:
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b) To request the insurance enterprise to
explain the insurance conditions and terms and issue the insurance certificate
or insurance policy;
c) To unilaterally suspend the performance of
the insurance contract under the provisions in Clause 3 of Article 19 and
Clause 1 of Article 20 of this Law;
d) To request the insurance enterprise to pay
the insurance money to the beneficiary or the indemnity to the insured as
agreed upon in the insurance contract when the insured event occurs;
e) To transfer the insurance contract as agreed
upon in the insurance contract or under the provisions of law;
f) Other rights prescribed by law.
2. An insurance buyer shall have the following
obligations:
a) To pay premiums fully, according to time
limits and mode agreed upon in the insurance contract;
b) To declare fully and honestly all details
relating to the insurance contract at the request of the insurance enterprise;
c) To notify cases where risks may increase or
the insurance enterprise’s additional liability may arise in the course of
performing the insurance contract to the insurance enterprise at the latter’s
request;
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e) To apply measures to prevent or limit losses
according to the provisions of this Law and other relevant law provisions;
f) Other obligations prescribed by law.
Article 19.-
Responsibility to supply information
1. When entering into insurance contracts, the
insurance enterprises have the responsibility to fully supply information on
the insurance contracts, explain insurance conditions and terms to the insurance
buyers; the insurance buyers have the responsibility to fully supply
information on the objects of insurance to the insurance enterprises. The
parties shall be accountable for the accuracy and truthfulness of such
information. The insurance enterprises shall have to keep confidential the
information supplied by the insurance buyers.
2. Insurance enterprises may unilaterally
suspend the performance of insurance contracts and collect the premiums to the
time of suspending the performance of the insurance contracts when the
insurance buyers commit one of the following acts:
a) Intentionally supplying untruthful
information with a view to entering into insurance contracts in order to be
paid with the insurance money or the indemnities;
b) Failing to fulfill the obligations to supply
information to the insurance enterprises as provided for at Point c, Clause 2,
Article 18 of this Law.
3. Where insurance enterprises intentionally
supply untruthful information with a view to entering into insurance contracts,
the insurance buyers may unilaterally suspend the performance of the insurance
contracts; such insurance enterprises shall have to pay compensation for the
damage caused to the insurance buyers due to the supply of untruthful
information.
Article 20.- Changes in
degrees of insured risks
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2. When there appear changes in the factors used
as basis for premium calculation, thus leading to the increase in the insured
risks, the insurance enterprises may recalculate the premium for the remaining
periods of the insurance contracts. Where the insurance buyers refuse to accept
the premium increase, the insurance enterprises may unilaterally suspend the
performance of the insurance contracts, but shall have to immediately notify
such in writing to the insurance buyers.
Article 21.-
Interpretation of insurance contracts
Where an insurance contract contains ambiguous
clauses, such clauses shall be interpreted in favor of the insurance buyer.
Article 22.- Null and
void insurance contracts
1. An insurance contract shall become null and
void in the following cases:
a) The insurance buyer has no interests which
can be insured;
b) The object of insurance no longer exists at
the time of entering into the insurance contract;
c) The insurance buyer, at the time of entering
into the insurance contract, knows the insured event has already occurred;
d) The insurance buyer or the insurance
enterprise commits acts of deception when entering into the insurance contract;
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2. The handling of null and void insurance contracts
shall comply with the provisions of the Civil Code and other relevant law
provisions.
Article 23.-
Termination of insurance contracts
Apart from cases of contract termination under
the provisions of the Civil Code, an insurance contract shall also be
terminated in the following circumstances:
1. The insurance buyer no longer has the
interests which can be insured;
2. The insurance buyer fails to fully pay the
premium or fails to pay the premium within the time limit agreed upon in the insurance
contract, except otherwise agreed upon by the parties;
3. The insurance buyer fails to fully pay the
premium during the extended time limit for premium payment as agreed upon in
the insurance contract.
Article 24.- Legal
consequences of the termination of insurance contracts
1. In cases where an insurance contract is
terminated under the provisions in Clause 1, Article 23 of this Law, the
insurance enterprise shall have to refund the premium to the insurance buyer
corresponding to the remaining period of the insurance contract for which the
insurance buyer has paid the premium, after subtracting the reasonable expenses
related to the insurance contract.
2. Where an insurance contract is terminated
under the provisions in Clause 2, Article 23 of this Law, the insurance buyer
shall still have to fully pay the premium to the time of terminating the
insurance contract. This provision shall not apply to person insurance
contracts.
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4. The legal consequences of the termination of
insurance contracts in other cases shall comply with the provisions of the
Civil Code and other relevant law provisions.
Article 25.- Amending
and supplementing insurance contracts
1. The insurance buyer and the insurance
enterprise may agree to amend and/or supplement the premium, the insurance
conditions and terms, except otherwise provided for by law.
2. All amendments and supplements to insurance
contracts must be made in writing.
Article 26.- Assignment
of insurance contracts
1. The insurance buyer may assign the insurance
contract as agreed upon in the insurance contract.
2. The assignment of an insurance contract shall
be valid only when the insurance buyer notify the assignment in writing to the
insurance enterprise and the insurance enterprise accepts such assignment in
writing, except where the assignment is effected according to international
practices.
Article 27.- Liability
in case of reinsurance
1. The insurance enterprises shall be
responsible only to the insurance buyers under the insurance contracts,
including cases of reinsurance of the insured liabilities.
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3. The insurance buyers must not demand the
reinsurance enterprises pay the insurance money or indemnities to them, except
otherwise agreed upon in the insurance contracts.
Article 28.- Time limit
for claiming insurance money or indemnities
1. The time limit for claiming the insurance
money or indemnity under insurance contracts shall be one year from the date
the insured event occurs. The time when the force majeure event or other
objective obstacle occurs shall not be counted into the time limit for claiming
the insurance money or indemnities.
2. Where the insurance buyers can prove that
they do not know the time when the insured events occur, the time limit
prescribed in Clause 1 of this Article shall be counted from the date the
insurance buyers know the occurrence of such insured events.
3. Where the third party demands the insurance
buyer compensate for damage covered by the insurance as agreed upon in the
insurance contract, the time limit prescribed in Clause 1 of this Article shall
be counted from the date the third party so demands.
Article 29.- The time
limit for payment of insurance money or indemnities
Upon the occurrence of insured events, insurance
enterprises shall have to pay the insurance money or indemnities within the
time limit already agreed upon in the insurance contracts. In case of the
absence of the agreement on such time limit, the insurance enterprises shall have
to pay the insurance money or indemnities within 15 days from the date of
receiving complete and valid dossiers claiming insurance money or indemnities.
Article 30.- Statute of
limitations for instituting a lawsuit
The statute of limitations for instituting a
lawsuit about an insurance contract shall be three years from the time the
dispute arises.
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Article 31.- Objects of
person insurance contracts
1. The objects of person insurance contracts
shall be the human age, life, health and accidents.
2. The insurance buyers may only buy insurance
for the following persons:
a) The insurance buyers themselves;
b) Their spouses, children and/or parents;
c) Their blood brothers and sisters; person with
ties of fostering and financial support;
d) Other persons, if the insurance buyers have
the interests that can be insured.
Article 32.- Sums of
insurance money
Sums of insurance money or modes of determining
the sums of insurance money shall be agreed upon by the insurance buyers and
the insurance enterprises in the insurance contracts.
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1. In human accident insurance, the insurance
enterprises shall have to pay the insurance money to the beneficiaries within
the limit of the insurance money amount, depending on the actual infirmity
suffered by the insured and the mutual agreement in the insurance contracts.
2. In human health insurance, the insurance
enterprises shall have to pay the insurance money to the insured within the
limit of the insurance money amount, depending on the expenses for medical
examination and treatment, health restoration for the insured as a result of
illness or accident and on the mutual agreement in the insurance contracts.
Article 34.- Disclosure
of age in life insurance
1. The insurance buyers shall be obliged to
disclose the accurate ages of the insured at the time of entering into
insurance contracts for use as basis for calculating the insurance premiums.
2. Where the insurance buyers disclose
inaccurate ages of the insured while the latters accurate ages are not included
in the insurable age groups, the insurance enterprises may cancel the insurance
contracts and refund the already paid insurance premium amounts to the
insurance buyers after subtracting relevant reasonable expenses. Where the
insurance contracts have taken effect for more than two years, the insurance
enterprises shall have to return to the insurance buyers the reimbursed values
of the insurance contracts.
3. Where the insurance buyers disclose
inaccurate ages of the insured, thus reducing the payable insurance premium
amounts, but the accurate ages of the insured persons remain to be in the
insurable age groups, the insurance enterprises shall have the right:
a) To request the insurance buyers to pay
additional insurance premiums corresponding to the insurance money amounts
already agreed upon in the contracts;
b) To reduce the insurance money amounts already
agreed in the insurance contract corresponding to the already paid amount of
insurance premiums.
4. Where the insurance buyers disclose
inaccurate ages of the insured, thus leading to the increase in the payable
insurance premium amounts, but the accurate ages of the insured persons remain
to be in the insurable age groups, the insurance enterprises shall have to
refund to the insurance buyers the overpaid insurance premium amounts or
increase the insurance money amounts already agreed upon in the insurance
contracts corresponding to the paid insurance premium amount.
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1. The insurance buyers may pay the insurance
premiums in lump sum or in installments according to the time limit and mode
agreed upon in the insurance contracts.
2. Where the insurance premiums are paid in
installments and the insurance buyers have already paid the premiums in one or
several installments but cannot further pay the insurance premiums in
subsequent installments, the insurance enterprises may, within 60 days after the
extension of the time limit for premium payment, unilaterally suspend the
performance of the contracts, the insurance buyers shall have no right to
reclaim the already paid insurance premium amount if the duration for which the
insurance premiums have already been paid is under two years, except otherwise
agreed upon by the parties.
3. Where the insurance buyers have already paid
the insurance premiums for two years or more while the insurance enterprises
unilaterally suspend the performance of the contracts as provided for in Clause
2 of this Article, the insurance enterprises shall have to refund to the
insurance buyers the returned values of the insurance contracts, except
otherwise agreed upon by the parties.
4. The parties may agree to restore the effect
of insurance contracts already unilaterally suspended from their performance as
provided for in Clause 2 of this Article within two years from the date the
contracts are suspended and the insurance buyers have already paid the
outstanding insurance premium amounts.
Article 36.- Not
entitled to initiate lawsuits to demand the insurance premium payment
In person insurance, if the insurance buyers
have not paid or have inadequately paid the insurance premiums, the insurance
enterprises are not allowed to initiate lawsuits, demanding the insurance
buyers to pay insurance premiums.
Article 37.- Not
entitled to demand refund by the third party
Where the insured dies, gets disable or sick as
a direct or indirect result of the third party’s
acts, the insurance enterprises shall still be obliged to repay the insurance
money amount but have no right to demand the third party refund the money
amount already paid to the beneficiary. The third party shall have to indemnify
the insured according to the provisions of law.
Article 38.- Entering
into person insurance contracts for case of death
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All cases of change of the beneficiary must be
agreed upon in writing by the insurance buyers.
2. Person insurance contracts for the death of
the following persons must not be entered into:
a) Persons under 18 years of age, except where
it is agreed in writing by the fathers, mothers or guardians of such persons;
b) Persons suffering from mental diseases.
Article 39.- Cases of
non-payment of insurance money
1. Insurance enterprises shall not have to pay
the insurance money in the following cases:
a) The insured dies of suicide within two years
counting from the date the first sum of insurance premium is paid or from the
date the insurance contract continues to be effective;
b) The insured dies or suffers from infirmity
due to the intentional fault of the insurance buyer or the intentional fault of
the beneficiary;
c) The insured dies due to the execution of
death sentence.
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3. For cases prescribed in Clause 1 of this
Article, the insurance enterprises shall have to return to the insurance buyers
the value of the insurance contracts or the entire paid premium amounts after
subtracting the relevant reasonable expenses; if the insurance buyers die, the
returned amount shall be handled according to the legislation on inheritance.
SECTION 3. PROPERTY
INSURANCE CONTRACTS
Article 40.- Subjects
of property insurance contracts
Subjects of property insurance contracts shall
include tangible objects, currency, papers which can be valued in money and
property rights
Article 41.- Insurance
money amounts
The insurance money amount is the sum requested
by the insurance buyer to be insured for such property.
Article 42.- Over-value
property insurance contracts
1. Over-value property insurance contracts mean
contracts in which the insured sums are higher than the market prices of the
insured property at the time of entering into contracts. The insurance
enterprises and the insurance buyers must not enter over-value property
insurance contracts.
2. Where an over-value property insurance
contract is concluded due to unintentional faults of the insurance buyer, the
insurance enterprise shall have to return to the insurance buyer the already
paid insurance premium amount corresponding to the insured sum in excess of the
market price of the insured property, after subtracting relevant reasonable
expenses. In cases where the insured event occurs, the insurance enterprise
shall only have to pay indemnities for the damage not exceeding the market
price of the insured property.
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1. The under-value property insurance contracts
mean contracts in which the insured sums are lower that the market prices of
the insured property at the time of concluding the contracts.
2. Where an under-value property insurance
contract is concluded, the insurance enterprise shall have to pay the
indemnities according to the proportion between the insured sum and the market
price of the insured property at the time of concluding the contract.
Article 44.- Coincident
insurance contracts
1. A coincident insurance contract is the case
where the insurance buyer concludes insurance contracts with two or more
insurance enterprises to insure the same objects, with the same insurance
conditions and insured event.
2. Where parties enter into a coincident
insurance contract, when the insured event occurs, each insurance enterprise
shall only have to make indemnity according to the proportion of the insured
sum agreed upon against the total insured sums of all contracts concluded by
the insurance buyer. The total sum of indemnities of the insurance enterprises
shall not exceed the value of actual damage caused to the property.
Article 45.- Damage due
to natural tear and wear or inherent nature of the property
Insurance enterprises shall not bear
responsibility in cases where the insured property are damaged due to natural
tear and wear or their inherent nature, except otherwise agreed upon in the
insurance contracts.
Article 46.- Bases for
indemnity
1. The indemnity amounts which the insurance
enterprises have to pay to the insured shall be determined on the basis of the
market prices of the insured property at the time when and the place where the
damage is caused and the actual damage extent, except otherwise agreed upon in
the insurance contracts. The expenses for determining the market prices and
damage extent shall be borne by the insurance enterprises.
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3. Apart from the indemnity sums, the insurance
enterprises shall also have to pay to the insured necessary and reasonable
expenses for the loss prevention and limitation as well as arising expenses
incurred by the insured to follow the instructions of the insurance
enterprises.
Article 47.- Forms of
indemnity
1. The insurance buyers and the insurance
enterprises may agree on one of the following indemnity forms:
a) Repairing the damaged property;
b) Replacing the damaged property with other
property;
c) Paying indemnity money.
2. Where the insurance enterprises and the
insurance buyers cannot reach agreement on indemnity forms, the compensation
shall be made in money.
3. Where the indemnity is made according to the
provisions at Points b and c, Clause 1 of this Article, the insurance
enterprises may recover the damaged property after they are replaced or fully
compensated at the market prices.
Article 48.- Expertise
of damage
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2. Where the parties cannot reach agreement on
the cause and extent of the damage, they can invite independent experts, except
otherwise agreed upon in the insurance contracts. Where the parties cannot
reach agreement on inviting independent experts, one of the parties may request
the court in the locality where the damage is caused or where the insured
resides to designate the independent experts. The conclusions made by the
independent experts shall be binding on all parties.
Article 49.- Responsibility
to transfer the right to request refunds
1. Where the third party is at fault in causing
damage to the insured and the insurance enterprise has already paid the
indemnity money to the insured, the insured shall have to transfer the right to
request the third party to refund the indemnity sum he/she has received to the
insurance enterprise.
2. Where the insured refuses to transfer such
right to the insurance enterprise, fail to reserve or give up the right to
request the third party to indemnify, the insurance enterprise may deduct the
indemnity sum depending on the degree of fault committed by the insured.
3. The insurance enterprises must not request
fathers, mothers, spouses, offspring, siblings of the insured to refund the
sums they have paid to the insured, except where these persons intentionally
cause the damage.
Article 50.-
Regulations on safety
1. The insured must abide by the regulations on
fire prevention and fighting, on labor safety, labor hygiene and other relevant
law provisions in order to ensure safety for the insurance objects.
2. The insurance enterprises may inspect the
conditions to ensure safety for insurance objects or propose, request the
insured to apply measures to prevent and limit risks.
3. Where the insured fails to take measures to
ensure safety for the insurance objects, the insurance enterprises may set a
time limit for the insured to apply such measures; if past such time limit the
safety measures are not applied, the insurance enterprises may raise the
insurance premiums or unilaterally suspend the performance of the insurance
contracts.
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Article 51.- Not to
abandon insured property
In cases where damage is caused, the insured
must not abandon the insured property, except otherwise provided for by law or
agreed upon by the parties.
SECTION 4. CIVIL LIABILITY
INSURANCE CONTRACTS
Article 52.- Subject of
civil liability insurance contracts
Subject of civil liability insurance contracts
shall be the insured’s
civil liability toward the third party as prescribed by law.
Article 53.-
Responsibility of insurance enterprises
1. The insurance enterprises’ responsibility shall arise only
if the third party requests the insured to pay compensations for damage caused
to the third party during the insurance time by such persons who are at fault.
2. The third party shall not be entitled to
directly request the insurance enterprises to pay the indemnities, except
otherwise provided for by law.
Article 54.- Insurance
money amounts
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Article 55.- Limits of
insured liability
1. Within the limits of the insurance sums, the
insurance enterprises shall have to pay the insured the amounts which, under
the provisions of law, the insured has to indemnify the third party.
2. Apart from paying the indemnities as provided
for in Clause 1 of this Article, the insurance enterprises shall also have to
pay for expenses related to the settlement of disputes over the liability for
the third party and the interests to be paid to the third party as the insured
defer the payment of damages under the instructions of the insurance
enterprises.
3. The total indemnities of the insurance
enterprises prescribed in Clauses 1 and 2 of this Article shall not exceed the
insurance sums, except otherwise agreed upon in the insurance contracts.
4. Where the insured have to pay deposits or
collateral in order to have the property not kept in custody or to avoid
lawsuits at courts, the insurance enterprises, at the request of the insured,
shall have to provide guarantee or collateral within the limits of the
insurance amounts.
Article 56.- Right to
represent the insured
The insurance enterprises may represent the
insurance buyers in negotiations with the third party on the levels of
compensation for damage, except otherwise agreed upon in the insurance
contracts.
Article 57.- Mode of
indemnification
At the insureds
request, the insurance enterprises may pay indemnities directly to the insured
or the victims being the third party.
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INSURANCE ENTERPRISES
SECTION 1. GRANTING
PERMITS FOR ESTABLISHMENT AND OPERATION
Article 58.-
Establishment and operation of insurance enterprises
The insurance enterprises shall be established
and operate under the provisions of this Law and other relevant law provisions.
Article 59.- Types of
insurance enterprises
Types of insurance enterprise shall include:
1. State-run insurance enterprise;
2. Joint stock insurance company;
3. Mutual support insurance organization;
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5. Insurance enterprises with 100% foreign
investment capital.
Article 60.- Contents
of operation of insurance enterprises
1. The operation of insurance enterprises shall
cover the following contents:
a) Insurance business, re-insurance business;
b) Risk, loss prevention and limitation;
c) Damage expertise;
d) Damage expertise agency, consideration of
indemnity settlement, request for refund by the third party;
e) Fund management and capital investment;
f) Other activities as prescribed by law.
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Article 61.- Contents
of re-insurance business
The re-insurance business shall cover:
1. Transferring part of the insured liability to
one or several other insurance enterprises;
2. Accepting the re-insurance of part or entire
liability already insured by other insurance enterprises.
Article 62.- Competence
to grant establishment and operation licenses
1. The Finance Ministry shall grant
establishment and operation licenses to insurance enterprises according to the
provisions of this Law and other relevant law provisions.
2. The granting of establishment and operation
licenses to insurance enterprises must be in line with the planning and plans
on orientation for the development of insurance market and the financial market
of Vietnam.
Article 63.- Conditions
for being granted the establishment and operation licenses
The conditions for being granted the
establishment and operation licenses include:
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2. Having the dossiers of application for
establishment and operation licenses made according to the provisions in
Article 64 of this Law.
3. Having types of enterprise and charters
compatible with the provisions of this Law and other law provisions;
4. The administrative and executive personnel
have the capabilities for management, insurance profession and operation.
Article 64.- Dossiers
of application for establishment and operation licenses
A dossier of application for an establishment
and operation license shall include:
1. The application for the establishment and
operation license;
2. The draft charter of the enterprise;
3. The plan for operation in the first five
years, clearly stating the modes of deduction for setting up professional
reserves, re-insurance program, capital investment, business efficiency,
solvency of the insurance enterprise and economic benefits of the establishment
of the enterprise;
4. The list, curricula vitae and diplomas
evidencing the capabilities as well as professional qualifications, of the
administrators and executive officials of the enterprise;
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6. Insurance rules, terms, charge and commission
rates of the insurance products planned for implementation.
Article 65.- Licensing
time limit
Within 60 days after the receipt of the full
dossiers of application for an establishment and operation license, the Finance
Ministry shall have to grant or refuse to grant the license. In case of refusal
to grant the license, the Finance Ministry must clearly explain in writing the
reasons therefor.
The establishment and operation licenses shall
also be valid as the business registration certificates.
Article 66.- Licensing
fee
The insurance enterprises which are granted the
establishment and operation licenses shall have to pay the licensing fees
according to the provisions of law.
Article 67.- Disclosure
of operation contents
After being granted the establishment and
operation licenses, the insurance enterprises shall have to make public the business
operation contents according to the provisions of law.
Article 68.- Withdrawal
of establishment and operation licenses
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a) The dossiers of application for establishment
and operation licenses contain intentionally falsified information;
b) Past 12 months after being granted the
establishment and operation licenses the insurance enterprises fail to start
their operation;
c) The enterprises are dissolved according to
the provisions in Article 82 of this Law;
d) The enterprises are divided, separated,
merged, bankrupt, transformed in their types;
e) They operate for the wrong purposes or in
contravention of the contents prescribed in their establishment and operation
licenses;
f) They fail to meet the financial requirements
for the fulfillment of their commitments with the insurance buyers.
2. In case of having their establishment and
operation licenses withdrawn under the provisions at Points a, b, c, e and f,
Clause 1 of this Article, the insurance enterprises shall have to immediately
stop the conclusion of new insurance contracts, but still have the
responsibility to pay the insurance money to the beneficiaries or the
indemnities to the insured and have to perform the insurance contracts
concluded before the withdrawal of their establishment and operation licenses.
Where the establishment and operation licenses
are withdrawn under the provisions at Point d, Clause 1 of this Article, the
rights and obligations of the parties shall comply with the provisions of law.
3. The decisions to withdraw establishment and
operation licenses of insurance enterprises shall be announced by the Finance
Ministry on the mass media.
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1. The insurance enterprises must get the
Finance Ministry’s approval
when changing one of the following contents:
a) The enterprises’
names;
b) The charter capital;
c) Setting up or closing branches and/or
representative offices;
d) Locations of head-offices, branches,
representative offices;
e) Operation contents, scope and duration;
f) Transfer of shares, contributed capital
representing 10% or more of the charter capital;
g) Managing Board chairmen, general directors
(directors);
h) Division, separation, merger, consolidation,
dissolution, transformation of enterprise.
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SECTION 2. MUTUAL SUPPORT
INSURANCE ORGANIZATIONS
Article 70.- Mutual
support insurance organizations
The mutual support insurance organizations are
those having the legal person status, which are established to conduct
insurance business for the purpose of providing mutual support and assistance
among members. The members of mutual support insurance organizations are the
owners and the insurance buyers too.
Article 71.- Members of
mutual support insurance organizations
1. Vietnamese organizations and citizens aged
full 18 years or older, who have full capacity for civil acts, that operate in
the same field, the same occupation and have the demand for insurance may all
join in founding the mutual support insurance organizations in the capacity as
the founding members.
2. Only organizations and individuals that enter
into insurance contracts with mutual support insurance organizations can become
members of the mutual support insurance organizations.
Article 72.- Limit of
liability of the mutual support insurance organizations
The mutual support insurance organizations shall
only be liable to their debts and other property obligations within their
property.
Article 73.-
Establishment, organization and operation of the mutual support insurance
organizations
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SECTION 3. TRANSFER OF
INSURANCE CONTRACTS
Article 74.- Transfer
of insurance contracts
1. The transfer of an entire insurance contract
on one or several insurance operations between insurance enterprises shall be
effected in the following cases:
a) The insurance enterprise is in the danger of
insolvency;
b) The insurance enterprise is split up,
separated, consolidated, merged or dissolved;
c) It is so agreed upon between insurance
enterprises.
2. Where the insurance enterprise is in danger
of insolvency or dissolution and cannot reach agreement on the transfer of
insurance contracts to other insurance enterprise, the Finance Ministry shall
designate the insurance enterprise to be transferee.
Article 75.- Conditions
for transfer of insurance contracts
The transfer of insurance contracts shall be
carried out under the following conditions:
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2. The rights and obligations under the to be-
transferred insurance contracts shall not alter till the expiry of the
insurance contracts;
3. The transfer of insurance contracts must be
made together with the transfer of funds and professional reserves related to
the entire insurance contracts to be transferred.
Article 76.- Procedures
for transfer of insurance contracts
The transfer of insurance contracts shall comply
with the following procedures:
1. The insurance enterprises transferring the
insurance contracts must file their applications proposing the transfer of
insurance contracts to the Finance Ministry, clearly stating the reasons and
plans of transfer, together with the to be- transferred contracts. The transfer
of insurance contracts shall be carried out only after it is approved in
writing by the Finance Ministry;
2. Within 30 days from the date the Finance
Ministry approves the transfer of insurance contracts, the insurance
contract-transferring enterprises must make public the transfer and notify it
in writing to the insurance buyers.
SECTION 4. RESTORATION OF
SOLVENCY, DISSOLUTION AND BANKRUPTCY OF INSURANCE ENTERPRISES
Article 77.- Solvency
1. Insurance enterprises must always maintain
their solvency throughout the process of their insurance business activities.
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3. The solvency amplitude of an insurance
enterprise is the difference between the property value and the payable debts
of that insurance enterprise.
Article 78.- Reporting
on insolvency danger
1. An insurance enterprise is in danger of
insolvency when its solvency amplitude is lower than the minimum solvency
amplitude prescribed by the Government.
2. Where being in the danger of insolvency,
insurance enterprises shall have to immediately report to the Finance Ministry
on their real financial status, the causes leading to the danger of insolvency
and the remedial measures.
Article 79.- Insurance
enterprises’ liability in
case of insolvency danger
In case of being in danger of insolvency, the
insurance enterprises shall have to apply the following measures:
1. Drawing up plans for restoration of their
solvency, consolidation of their organization and operation, reporting them to the
Finance Ministry and implementing the plans already approved by the Finance
Ministry;
2. Meeting the Finance Ministry’s request for restoration of
solvency.
Article 80.- Control
over the insurance enterprises being in danger of insolvency
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2. The solvency control board shall have the
following tasks and powers:
a) To direct and supervise the application of
measures for solvency restoration according to the approved plan;
b) To notify the concerned State bodies of the
application of measures to restore the solvency for coordinated implementation;
c) To restrict the scope and domain of operation
of the insurance enterprise;
d) To suspend the activities which may lead to
the insolvency of the insurance enterprise;
e) To request the insurance enterprise to
transfer the entire insurance contract on one or several insurance operations
to other insurance enterprises;
f) To temporarily suspend the administrative and
executive rights and request the insurance enterprise to replace Managing Board
members, general director (director), deputy general director (deputy director)
if deeming it necessary;
g) To request the Managing Board, the general
director to discharge from position or work persons who commit acts of law
offense, fail to abide by the solvency restoration plan already approved;
h) To propose the Finance Ministry to continue
or terminate the solvency restoration measures;
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3. The solvency control board must bear
responsibility for its decisions as provided for by law in the course of
applying measures to restore the solvency of the insurance enterprise.
4. The insurance enterprise shall have to
implement the requests and decisions of the solvency control board.
Article 81.-
Terminating the application of solvency restoration measures
1. The application of solvency restoration
measures shall terminate in the following cases:
a) The time limit for application of solvency
restoration measures has expired;
b) The insurance enterprise’s operation has returned to
normal;
c) The insurance enterprise has been
consolidated or merged before the expiry of the time limit for application of
solvency restoration measures;
d) The insurance enterprise falls into the state
of bankruptcy.
2. The termination of application of solvency
restoration measures shall comply with the decisions of the Finance Minister.
Such decisions shall be notified to concerned bodies.
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1. An insurance enterprise shall be dissolved in
the following cases:
a) It voluntarily applies for dissolution if it
is solvent;
b) Its operation duration prescribed in the
establishment and operation license has expired without any decision on the
extension thereof;
c) Its establishment and operation license has
been withdrawn under the provisions at Points a, b, e and f, Clause 1, Article
68 of this Law;
d) Other cases prescribed by law.
2. The dissolution of insurance enterprises must
be approved in writing by the Finance Ministry.
Article 83.- Bankruptcy
of insurance enterprises
Where an insurance enterprise is incapable of
paying its due debts and becomes insolvent even after the application of
measures to restore its solvency, the bankruptcy of the insurance enterprise
shall comply with the provisions of the legislation on bankruptcy of
enterprises.
Chapter IV
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SECTION I. INSURANCE AGENTS
Article 84.- Insurance
agents
Insurance agents are organizations and
individuals, that are authorized by insurance enterprises on the basis of
insurance agency contracts to carry out the insurance agency activities
according to the provisions of this Law and other relevant law provisions.
Article 85.- Contents
of insurance agency activities
Insurance agents may be authorized by insurance
enterprises to carry out the following activities:
1. Making introduction, sale offer of insurance;
2. Arranging the conclusion of insurance
contracts;
3. Collecting insurance premiums;
4. Arranging the payment of indemnities,
insurance money when insured events occur;
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Article 86.- Conditions
for insurance agency activities
1. Individuals who conduct insurance agency
activities must fully meet the following conditions:
a) Being Vietnamese citizens permanently
residing in Vietnam;
b) Being full 18 years of age or older, having
full civil act capacity;
c) Having certificates of training in insurance
agency, granted by insurance enterprises or Vietnam Insurance Association.
2. Organizations which conduct insurance agency
activities must fully meet the following conditions:
a) Being organizations lawfully established and
operating;
b) The agency organizations’ personnel directly performing
the insurance agency activities must satisfy all conditions prescribed in
Clause 1 of this Article.
3. Persons who are being examined for penal
liability or serving their imprisonment penalty or being deprived by the court
of the right to professional practice due to their commission of the crimes
prescribed by law are not allowed to sign insurance agency contracts.
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An insurance agency contract must contain the
following major details:
1. The name and address of the insurance agent;
2. The name and address of the insurance
enterprise;
3. The rights and obligations of insurance
enterprise, insurance agent;
4. The contents and scope of operation of the insurance
agent;
5. The insurance agency commission;
6. The term of the contract;
7. The principles for settlement of disputes.
Article 88.-
Responsibility of insurance agents
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SECTION 2. INSURANCE
BROKERAGE ENTERPRISES
Article 89.- Insurance
brokerage enterprises
The insurance brokerage enterprises are those
which perform the insurance brokerage activities under the provisions of this
Law and other relevant law provisions.
Article 90.- Contents
of insurance brokerage activities
The insurance brokerage activities shall cover
the following contents:
1. Providing information on the insurance types,
conditions, terms, premiums and/or insurance enterprises to the insurance
buyers;
2. Advising the insurance buyers on the
evaluation of risks, selection of insurance types, conditions, terms, premium
rate index, insurance enterprises;
3. Negotiating, arranging the conclusion of
insurance contracts between insurance enterprises and insurance buyers;
4. Performing other jobs relating to the
performance of insurance contracts at the request of the insurance buyers.
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1. The insurance brokerage enterprises shall
enjoy insurance brokerage commissions. The insurance brokerage commissions
shall be calculated into the insurance premiums.
2. The insurance brokerage enterprises shall
have the obligations:
a) To conduct brokerage in an honest manner;
b) Not to disclose, supply information, causing
damage to the legitimate rights and interests of the insured;
c) To pay compensations to the insurance buyers
for the damage caused by their brokerage activities.
Article 92.-
Professional liability insurance
The insurance brokerage enterprises shall have
to buy professional liability insurance for their insurance brokerage
activities at insurance enterprises operating in Vietnam.
Article 93.- Granting
of establishment and operation licenses
The granting of licenses for the establishment
and operation of the insurance brokerage enterprises shall comply with the
provisions in Article 62, Article 63, Clauses 1, 2, 3 and 4 of Article 64, and
Articles 65, 66, 67, 68 and 69 of this Law.
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FINANCE, COST ACCOUNTING
AND FINANCIAL REPORT
Article 94.- Legal
capital, charter capital
1. The Government shall stipulate the levels of
legal capital of insurance enterprises and insurance brokerage enterprises.
2. In the course of operation, the insurance enterprises
and the insurance brokerage enterprises must always maintain the contributed
charter capital at the level not lower than the legal capital level.
Article 95.- Escrow
account
1. The insurance enterprises shall have to use
part of their charter capital for escrow account at commercial banks operating
in Vietnam.
2. The Government shall prescribe the escrow
account amounts and the ways of using the escrow account money.
Article 96.-
Professional reserves
1. Professional reserves are the money amounts
which must be set up with deductions by the insurance enterprises for the
purpose of paying for insured liabilities, which have been pre-determined and
arisen from the concluded insurance contracts.
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3. The Finance Ministry shall specify the levels
and methods of deduction for establishment of the professional reserve for each
insurance operation.
Article 97.- Reserve
funds
1. The insurance enterprises and the insurance
brokerage enterprises must set up compulsory reserve funds in order to
supplement their charter capital and ensure their solvency. The level of 5% of
the after-tax profits shall be deducted annually for the compulsory reserve
funds. The maximum level of this fund shall be prescribed by the Government.
2. Apart from the compulsory reserve fund
prescribed in Clause 1 of this Article, the insurance enterprises and the
insurance brokerage enterprises may set up other reserve funds from after-tax
profits of the fiscal year as provided for in the charters of the insurance
enterprises or insurance brokerage enterprises.
Article 98.- Capital
investment
1. The investment of capital by insurance
enterprises must ensure safety and efficiency, and satisfy the requirements of
regular payment for the commitments under the insurance contracts.
2. The insurance enterprises may only use their
idle capital for investment in Vietnam in the following domains:
a) Buying Government bonds;
b) Buying shares, enterprise bonds;
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d) Contributing capital to other enterprises;
e) Providing loans according to the provisions
of the Law on Credit Institutions;
f) Making deposits at credit institutions.
3. The Government shall specify the list of
investment in the domains prescribed in Clause 2 of this Article and the
percentage of idle capital allowed for investment in each list of investment in
order to ensure that the insurance enterprises can always maintain their
solvency.
Article 99.- Financial
revenue, expenditure
1. The financial revenues and expenditures of
insurance enterprises and insurance brokerage enterprises shall comply with the
provisions of law.
2. The Finance Ministry shall guide and inspect
the implementation of the financial regimes by the insurance enterprises and
the insurance brokerage enterprises.
Article 100.- Fiscal
year
The fiscal year of the insurance enterprises and
the insurance brokerage enterprises commences on January 1 and ends on December
31 of the same calendar year. The first fiscal years of the insurance
enterprises and the insurance brokerage enterprises shall start from the dates
they are granted the establishment and operation licenses and end on the last
day of the same year.
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The insurance enterprises and the insurance
brokerage enterprises must observe the financial regimes applicable to the insurance
enterprises according to the provisions of the legislation on accounting.
Article 102.- Auditing
The annual financial reports of the insurance
enterprises and the insurance brokerage enterprises must be certified by independent
auditing organizations.
Article 103.-
Financial report
1. The insurance enterprises and insurance
brokerage enterprises must observe the financial reporting regimes as
prescribed by the legislation on accounting and make periodical reports on their
professional activities as stipulated by the Finance Ministry.
2. Apart from the periodical reports, the
insurance enterprises shall also have to report to the Finance Ministry in the
following cases:
a) When abnormal developments occur in the
enterprises’ business
operations;
b) When they fail to meet the prescribed
financial requirements for the fulfillment of commitments to the insurance
buyers.
Article 104.- Making
public financial reports
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Chapter VI
INSURANCE ENTERPRISES
AND INSURANCE BROKERAGE ENTERPRISES WITH FOREIGN INVESTMENT CAPITAL
Article 105.- Forms of
operation
1. Foreign insurance enterprises and insurance
brokerage enterprises shall be licensed for operation in Vietnam in the
following forms:
a) Joint venture insurance enterprise, joint
venture insurance brokerage enterprise;
b) Insurance enterprise with 100% foreign
investment capital, insurance brokerage enterprise with 100% foreign investment
capital.
2. Foreign insurance enterprises and insurance
brokerage enterprises may set up their representative offices in Vietnam. Such
representative offices are not allowed to conduct insurance business in
Vietnam.
Article 106.-
Conditions for being granted the establishment and operation licenses
The conditions for insurance enterprises and
insurance brokerage enterprises to be granted the establishment and operation
licenses shall include:
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2. The foreign insurance enterprises and
insurance brokerage enterprises are operating lawfully and in the normal
financial state;
3. The foreign insurance enterprises and
insurance brokerage enterprises are permitted by competent bodies of foreign
countries to conduct insurance business or insurance brokerage activities in
the domains planned to be carried out in Vietnam.
Article 107.-
Conditions for being grant licenses to set up representative offices in Vietnam
The conditions for foreign insurance enterprises
and insurance brokerage enterprises to be granted licenses for setting up their
representative offices in Vietnam shall include:
1. The foreign insurance enterprises and
insurance brokerage enterprises have operated for five years or more;
2 The foreign insurance enterprises and
insurance brokerage enterprises have cooperative ties with Vietnamese agencies,
organizations.
Article 108.-
Licensing competence
The Finance Ministry shall grant establishment
and operation licenses to the insurance enterprises and insurance brokerage
enterprises with foreign investment capital; the licenses for setting up
Vietnam-based representative offices of foreign insurance enterprises or
insurance brokerage enterprises.
Article 109.- Dossiers
of application for establishment and operation licenses
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a) The charter, the establishment and operation
licenses of the parties to the joint venture;
b) The joint venture contract;
c) The annual balance sheets and financial
reports, certified by independent auditing organizations about the situation of
operation of the joint venture parties for the three latest years.
2. Apart from the contents prescribed in Article
64 of this Law, the dossier of application for licenses for the establishment
and operation of insurance enterprises and insurance brokerage enterprises with
100% foreign investment capital shall also include:
a) The charter, establishment and operation
license of the foreign insurance enterprise or the foreign insurance brokerage
enterprise in the country where it is headquartered;
b) The letter of authorization for the general
director (director) in Vietnam;
c) The annual balance sheet and financial
report, certified by the independent auditing organization of the situation of
operation of the foreign insurance enterprise or insurance brokerage enterprise
in the country where it is headquartered for the three latest years.
Article 110.- Dossiers
of application for licenses to set up representative offices
The dossier of application for licenses to set
up representative offices shall include:
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2. The establishment and operation license of
the foreign insurance enterprise or foreign insurance brokerage enterprise in
the country where it is headquartered;
3. The annual balance sheet and financial
report, certified by the independent auditing organization of the situation of
operation of the foreign insurance enterprise or the foreign insurance brokerage
enterprise for the three latest years;
4. The full names, curricula vitae of the chiefs
of the representative offices in Vietnam;
5. The written introduction of the foreign
insurance enterprise or insurance brokerage enterprise as well as its cooperation
with Vietnamese agencies and/or organizations.
Article 111.-
Licensing time limits, licensing fees and announcement of operation contents
The licensing time limits, the licensing fees
and the announcement of operation contents for foreign-invested insurance
enterprises and insurance brokerage enterprises, representative offices of
foreign insurance enterprises or insurance brokerage enterprises shall comply
with the provisions in Articles 65, 66 and 67 of this Law.
Article 112.-
Withdrawal of licenses
1. Apart from the provisions in Article 68 of
this Law, foreign-invested insurance enterprises and insurance brokerage
enterprises may have their establishment and operation licenses withdrawn when
the foreign insurance enterprises or insurance brokerage enterprises in the
countries where they are headquartered have their establishment and operation
licenses withdrawn.
2. Representative offices of foreign insurance
enterprises or insurance brokerage enterprises shall have their setting up
licenses withdrawn when the foreign insurance enterprises or insurance
brokerage enterprises in the countries where they are headquartered have their
establishment and operation licenses withdrawn.
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Changes requiring approvals for foreign-invested
insurance enterprises or insurance brokerage enterprises shall comply with the
provisions in Article 69 of this Law.
Article 114.-
Operation contents
The contents of operation of foreign-invested
insurance enterprises or insurance brokerage enterprises, or representative
offices of foreign insurance enterprises or insurance brokerage enterprises
must comply with the provisions of this Law and other provisions of Vietnamese
legislation.
Article 115.- Funds,
reserve funds and financial revenue and expenditure of foreign-invested
insurance enterprises and insurance brokerage enterprises
1. The Government shall prescribe the legal
capital levels for foreign-invested insurance enterprises and insurance
brokerage enterprises.
2. The deductions for setting up compulsory
reserve funds and other reserve funds of foreign-invested enterprises or
insurance brokerage enterprises shall comply with the provisions in Article 97
of this Law.
3. The financial revenues and expenditures of foreign-invested
insurance enterprises and insurance brokerage enterprises shall comply with the
provisions of Vietnamese legislation.
Article 116.-
Solvency, escrow account, professional reserves and capital investment of
foreign-invested insurance enterprises
1. The foreign-invested insurance enterprises
must maintain their solvency as provided for in Article 77 of this Law.
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3. The foreign-invested insurance enterprises
may invest their capital as provided for in Article 98 of this Law.
Article 117.- The
regimes of accounting, auditing and financial reporting
1. The foreign- invested insurance enterprises
and insurance brokerage enterprises must observe the accounting, auditing and
financial-reporting regimes as provided for in Articles 101, 102, 103 and 104
of this Law.
2. Within 180 days after the end of a fiscal
year, the foreign-invested insurance enterprises and insurance brokerage
enterprises as well as representative offices of foreign-invested insurance
enterprises or insurance brokerage enterprises must send the annual financial
reports of the foreign insurance enterprises and insurance brokerage
enterprises to the Finance Ministry.
Article 118.- Transfer
of profits, property abroad
1. The insurance enterprises or insurance
brokerage enterprises with 100% foreign investment capital may transfer abroad
the remaining amounts of profits under their ownership after making deductions
for establishment of funds and fulfilling all financial obligations as provided
for by Vietnamese laws.
2. The foreign parties to the joint-venture
insurance enterprises or insurance brokerage enterprises may transfer abroad
the divided profit amounts after the joint-venture insurance enterprises or
insurance brokerage enterprises have already made deductions for establishment
of funds and fulfilled all the financial obligations as provided for by
Vietnamese laws.
3. The insurance enterprises with 100% foreign
capital and the foreign parties to the joint-venture insurance enterprises; the
insurance brokerage enterprises with 100% foreign capital and the foreign
parties to the joint-venture insurance brokerage enterprises may transfer
abroad the remainder of their property after liquidation, termination of their
operation in Vietnam.
4. The transfer abroad of money and other assets
as provided for in Clauses 1, 2 and 3 of this Article shall comply with the
provisions of Vietnamese laws.
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The Government shall specify the contents,
scopes and areas of operation of foreign-invested insurance enterprises and
insurance brokerage enterprises as well as the Vietnam-based representative
offices of foreign insurance enterprises or insurance brokerage enterprises.
Chapter VII
STATE MANAGEMENT OVER
INSURANCE BUSINESS
Article 120.- Contents
of the State management over insurance business
The contents of the State management over insurance
business shall include:
1. Promulgating and guiding the implementation
of, legal documents on insurance business; elaborating strategies, planning,
plans and policies on development of insurance market in Vietnam;
2. Granting and withdrawing licenses for
establishment and operation of insurance enterprises or insurance brokerage
enterprises; licenses for setting up in Vietnam the representative offices of
foreign insurance enterprises or insurance brokerage enterprises;
3. Promulgating, ratifying, guiding the
implementation of, insurance regulations, terms, premium and commission rate
index;
4. Applying necessary measures so that the
insurance enterprises ensure the financial requirements and fulfill their
commitments to the insurance buyers;
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6. Conducting international cooperation in the
insurance domain;
7. Approving the overseas operations of
insurance enterprises or insurance brokerage enterprises;
8. Managing the operation of the Vietnam-based
representative offices of foreign insurance enterprises or insurance brokerage
enterprises;
9. Organizing the training and building up of
the contingent of managerial and professional insurance personnel;
10. Inspecting and examining the insurance
business activities; settling complaints and denunciations about, and handling
violations of the legislation on, insurance business.
Article 121.- State
management bodies
1. The Government shall exercise the uniform
State management of insurance business.
2. The Finance Ministry shall take
responsibility to the Government for the implementation of State management
over the insurance business.
3. The ministries, ministerial-level agencies
and agencies attached to the Government shall, within the scope of their
respective tasks and powers, exercise the State management over insurance
business according to the provisions of law.
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Article 122.-
Inspecting the insurance business activities
1. The inspection of activities of insurance
enterprises must be carried out in strict accordance with the functions and
competence and in compliance with the law provisions.
The financial inspection shall be carried out
for not more than once a year for an enterprise. The maximum inspection
duration shall not exceed 30 days; for special cases, the inspection duration
may be extended under the decisions of the competent superior bodies, but the
extension shall not exceed 30 days.
The irregular inspection may be conducted only
when there appear grounds of law offenses by enterprises.
2. When conducting inspections there must be the
decisions of competent persons; upon the end of an inspection there must be a
record concluding the inspection. The head of the inspection team shall take
responsibility for the content of the record and the conclusion on inspection.
3. Those who issue decisions on illegal
inspections or take advantage of inspection for self-seeking purposes, harass
or trouble the activities of enterprises shall, depending on the seriousness of
their violations, be disciplined or examined for penal liability; if causing
damage, they must pay compensations to the concerned enterprises according to
the provisions of law.
Chapter VIII
COMMENDATION, REWARD AND
HANDLING OF VIOLATIONS
Article 123.-
Commendation and reward
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Article 124.- Acts of
violating the legislation on insurance business
Acts of violating the legislation on insurance
business shall include:
1. Conducting insurance business without
establishment and operation licenses or in contravention of the contents of the
establishment and operation licenses;
2. Breaching regulations on the granting of
establishment and operation licenses, on inspection, examination and
supervision, by competent State bodies;
3. Illegal competition;
4. Compelling the conclusion of insurance
contracts;
5. Breaching the regulation on compulsory
insurance;
6. Breaching the duty to keep secret insurance
contract-related information supplied by the insurance buyers;
7. Supplying false information, data and/or
report;
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9. Breaching regulations on capital investment;
10. Other acts of violating the legislation on
insurance business.
Article 125.- Handling
of violations
1. Those who breach the provisions of this Law
shall, depending on the nature and seriousness of their violations, be
administratively sanctioned or examined for penal liability; if causing damage,
they must make compensations therefor according to the provisions of law.
2. Those who abuse their positions and powers
and breach the regulations on the granting of establishment and operation
licenses, the licenses for setting up of Vietnam-based representative offices
of foreign insurance enterprises or insurance brokerage enterprises, on the
State management over insurance business and other provisions of this Law,
shall, depending on the nature and seriousness of their violations, be
disciplined or examined for penal liability; if causing damage, they must make
compensations therefor according to the provisions of law.
Article 126.-
Complaints and lawsuits about decisions on sanctioning administrative
violations
1. Organizations and individuals, that are
handled for administrative violations, may complain to competent State bodies
or initiate lawsuits at courts according to the provisions of law.
2. During the period of complaint or lawsuit,
the organizations and individuals, that are handled for administrative
violations, shall still have to execute the decisions on handling the
administrative violations. Where there are complaint-settling decisions of the
competent State bodies or the court’s
judgments or decisions which have already taken effect, the complaint-settling
decisions of the competent State bodies or the court’s
judgments or decisions shall be complied with.
Chapter IX
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Article 127.-
Regulations for insurance enterprises, insurance brokerage enterprises,
representative offices, which have been established and operating; insurance
contracts, which have been concluded, before the effective date of this Law.
1. Insurance enterprises and insurance brokerage
enterprises, which have been established and operating under the establishment
decisions, establishment licenses, investment licenses, certificates of full
eligibility and qualifications for insurance business; and representative
offices of foreign insurance enterprises or insurance brokerage enterprises,
which have operated under the licenses for setting up the representative
offices, granted before the effective date of this Law shall not have to carry
out procedures to apply for re-granting of licenses.
2. The insurance contracts which have been
concluded before this Law takes effect shall continue to be performed in
accordance with the law provisions at the time of concluding the contracts.
Article 128.-
Implementation effect
1. This Law takes effect as from April 1, 2001.
2. The previous regulations contrary to this Law
shall all be annulled.
Article 129.-
Implementation guidance
The Government shall detail and guide the
implementation of this Law.
This Law was passed on December 9, 2000 by the
Xth National Assembly of the Socialist Republic of Vietnam at its 8th session.
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NATIONAL ASSEMBLY CHAIRMAN
Nong Duc Manh