|
MINISTRY
OF FINANCE
-------
|
THE
SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
---------------
|
|
No. 67/2023/TT-BTC
|
Hanoi,
November 2, 2023
|
CIRCULAR
ON
GUIDELINES FOR THE LAW ON INSURANCE BUSINESS AND DECREE NO. 46/2023/ND-CP DATED
JULY 1, 2023 OF THE GOVERNMENT ON ELABORATION OF THE LAW ON INSURANCE BUSINESS
Pursuant to Law on Insurance Business dated June 16, 2022;
Pursuant to Government’s Decree No. 46/2023/ND-CP dated July
1, 2023 on elaboration of the Law on Insurance Business;
Pursuant to Government's Decree No. 14/2023/ND-CP dated April
20, 2023 on functions, tasks, powers, and organizational structure of the
Ministry of Finance;
At the request of Director of Department of Insurance
Management and Supervision,
The Minister of Finance promulgates a Circular on guidelines
for the Law on Insurance Business and Decree No. 46/2023/ND-CP dated July 1,
2023 of the Government on elaboration of the Law on Insurance Business.
Chapter I
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 1. Scope
1. This
Circular elaborates Clause 3 Article 14, Clause 2 Article 17, Clause 4 Article
76, Clause 4 Article 82, Clause 6 Article 87, Clause 5 Article 89, Clause 4
Article 101, Clause 4 Article 105, Clause 3 Article 106, Clause 2 Article 117,
Clause 2 Article 120, Point c Clause 1 and Points dd and k Clause 2 Article
128, Clause 4 Article 129, Point a Clause 1 and Point c Clause 2 Article 137,
Clause 5 Article 138 , Clause 4, Article 145 of the Law on Insurance Business.
2. This
Circular provides guidelines for Clause 6, Article 7, Point c, Clause 2,
Article 32, Article 44, Clause 7, Article 49 of Decree No. 46/2023/ND-CP dated
July 1, 2023 of the Government on elaboration of the Law on Insurance Business
(hereinafter referred to as Decree No. 46/2023/ND-CP), including forms of database
on insurance business; explanatory documents on methods and factors for
calculating premiums; guidance and illustration of methods, formulas, and bases
for establishing technical reserves; time of revenue recognition for each type
of insurance.
Article 2. Regulated entities
1. Non-life
insurers, life insurers, health insurers (hereinafter referred to as insurers),
reinsurers, insurance agents, insurance brokers, corporate and individuals
providers of insurance auxiliary services, mutual microinsurers.
2. Branches
of foreign non-life insurers, branches of foreign reinsurers (hereinafter
referred to as foreign branches in Vietnam).
3. Representative
offices of foreign insurers, foreign reinsurers, foreign insurance brokers,
foreign financial and insurance corporations in Vietnam (hereinafter referred
to as representative offices in Vietnam).
4. Policyholders,
insured persons, beneficiaries.
5. State
regulatory authorities for insurance business affairs.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 3. Providing and updating
information
1. Information
prescribed in Point c, Clause 1, Article 7 of Decree No. 46/2023/ND-CP is
specified in detail in Form No. 1-CSDL, Appendix I issued with this Circular.
2. Information
prescribed in Clause 2, Article 7 of Decree No. 46/2023/ND-CP is specified in
detail as follows:
a) As for life insurance: Form No. 2-CSDL Appendix I issued
with this Circular;
b) As for health insurance: Form
No. 3-CSDL Appendix I issued with this Circular;
c) As for non-life insurance (except compulsory insurance for
civil liability of motor vehicle owners, compulsory fire and explosion
insurance, compulsory insurance in construction and investment activities,
agricultural insurance): Form No. 4-CSDL Appendix I issued with this Circular.
As for compulsory insurance for civil liability of motor
vehicle owners, compulsory fire and explosion insurance, compulsory insurance
in construction and investment activities: Form
No. 1, Form No. 2, Form No. 3 Appendix X Issued together with Decree No.
67/2023/ND-CP dated September 6, 2023 of the Government on compulsory insurance
for civil liability of motor vehicle owners, compulsory fire and explosion
insurance, compulsory insurance in construction and investment activities.
As for agricultural insurance: Form No. 10 is specified in
the Appendix issued with Decree No. 58/2018/ND-CP dated April 18, 2018 of the
Government on agricultural insurance and amended or replaced documents (if
any).
d) As for microinsurance (by mutual microinsurers): Form No. 07 Appendix issued with Decree No. 21/2023/ND-CP
dated May 5, 2023 of the Government on microinsurance products.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
ONLINE INSURANCE
PROVISION
Article 4. Online insurance provision
1. Insurers,
branches of foreign non-life insurers, mutual microinsurers, insurance brokers, and insurance
agents may provide full
or partial insurance process through electronic
means that connect with the
Internet, mobile telecommunications networks, or other open networks through online channels.
2. The
full online insurance process, as outlined in Clause 1 of this Article,
encompasses implementation of all steps in online insurance process, including
introduction, consultation, or provision of services; or consultation,
introduction, offering of insurance products, verification of requested
information, appraisal, confirmation of requests for entering into an insurance
policy, arrangement of insurance policy conclusion, payment, and issuance of an
insurance policy or insurance certificate.
3. Insurers,
branches of foreign non-life insurers, and mutual microinsurers are authorized
to carry out the entire process of providing insurance services and products
online for one or several insurance products as follows:
a) Microinsurance, health insurance, term life insurance with
a term exceeding one year, and other insurance products with a term of one year
or less, for which the insurer, reinsurer, branch, or mutual microinsurer does
not require appraisal or risk assessment prior to entering into an insurance
policy, as specified in Clause 1, Article 5 of this Circular;
b) Health insurance, term life insurance with a term of one
year or less, motor vehicle insurance, trip and tourism insurance that are
provided in any form specified in Article 5 of this Circular.
4. The
partial execution of the insurance service and product provision process online
entails the online execution of certain activities prescribed in Clause 2 of
this Article by an insurer, branch of foreign non-life insurer, mutual
microinsurer, insurance broker, or insurance agent, according to the forms
outlined in Article 5 of this Circular.
In case of partial execution of the insurance service and
product provision process online for products not listed in Clause 3 of this
Article, consulting service must be performed directly or in the form of a
recorded call between an insurer, branch of foreign non-life insurer, mutual
microinsurer, insurance broker, or insurance agent with the policyholder.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Forms of provision of insurance services and products online
include:
1. A
portal/website with registered domain name as per applicable legal regulations,
e-commerce selling website, or networked applications that enable service users
or policyholder to access the portal/website, e-commerce selling website or
applications installed on the portal/website, e-commerce selling website or
e-commerce applications created by insurers, branches of foreign non-life
insurers, and mutual microinsurers for online insurance provision purpose.
2. Portals/websites
with registered domain names as per applicable legal regulations, e-commerce
selling websites, e-commerce service websites, or networked applications that
enable service users or policyholders access the portals/websites, e-commerce
selling websites, or e-commerce service websites that are created by insurance
brokers or insurance agents for providing online insurance. E-commerce service websites include the following types:
a) E-commerce trading floor;
b) Other types of websites prescribed by the Ministry of
Industry and Trade.
Article 6. Notification of online
insurance provision
1. Insurers,
branches of foreign non-life insurers, mutual microinsurers, and insurance
brokers must notify the Ministry of Finance of the commencement of online
insurance services within 7 working days of their implementation. This
notification must encompass details pertaining to their business, offered
services, insurance products, provision methods, and other relevant information
related to online insurance provision, adhering to the form outlined in
Appendix II of this Circular.
2. If
insurers, branches of foreign non-life insurers, mutual microinsurers,
insurance brokers have provided online insurance services and products before
the effective date of this Circular, they must notify the Ministry of Finance
of their current online insurance provision within 90 days after the effective
date of this Circular, using the form specified in Appendix II.
Article 7. Regulations on services,
techniques, security, and data storage
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. Develop
and promulgate regulations governing online insurance provision, including the
following key information:
description of
transaction process; risk control and information security; rights and
obligations of related parties; complaint and dispute resolution mechanism;
personal information protection policy; troubleshooting solutions, backup
systems; storage and measures for non-compliance with operating regulations.
2. Ensuring
the online insurance provision in an open, fair, transparent, safe, and
effective manner for service users or policyholders when using the same type of
service, product.
3. Make
readily available on their websites with registered domain names all
applications and forms used for online insurance provision, adhering to current
legal regulations governing online insurance services.
4. Websites
of insurers, branches of foreign non-life insurers and systems of online
insurance provision need to be authenticated in accordance with the law on
electronic transactions.
5. The
online provision of insurance products, as outlined in Clause 2, Article 4 of
this Circular, must be explicitly detailed in the insurance policy signed
between the policyholder and the insurer, branch of a foreign non-life insurer,
or mutual microinsurer. This policy must specify the form of online
transactions, potential risks associated with online insurance purchases,
compensation responsibilities of each party in the event of risks, and any
other relevant information pertaining to the online provision of insurance
products. This regulation applies to insurance
policies concluded from January 1, 2024.
6. Data
on online insurance provision shall be stored according to current law
regulations.
7. Determine
the level of information system security and corresponding safeguarding plans
in accordance with the law on network information security, information system
security by level and electronic transactions in financial activities.
Article 8. Responsibilities of
insurers, branches of foreign non-life insurers, mutual microinsurers, and
insurance brokers
1. Notify
the Ministry of Finance of the information stated in Article 6 of this
Circular.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. Develop
and make public the following information on their website:
a) List of online insurance services and products, and forms
of provision;
b) A description of the insurance provision process via the
website/e-commerce selling website (full/partial process); the insurance
provision process via e-commerce trading floor (partial process); the insurance
provision process through networked applications (full/partial process);
personal information protection and dispute resolution policy.
4. Ensure
availability of technical infrastructure and personnel for online insurance
provision.
5. Ensure
compliance with legal regulations on insurance business, legal regulations on
electronic transactions and relevant legal regulations.
6. Insurers,
branches of foreign non-life insurers, and mutual microinsurers shall manage
the online insurance services and products offered by insurance agents into
which they have entered an insurance agent contract.
7. Promptly
provide complete information, data, and documents related to their online
insurance provision when requested by competent authorities.
8. In
case of contracting with a third-party provider that provides IT infrastructure
services to provide online insurance services and products, they must sign a
contract and maintain the cooperation with this third party in complying with
this Circular and regulations on electronic transactions in financial
activities and other relevant legal regulations.
Chapter III
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 9. The policyholder, insured
person, beneficiary of a life insurance policy, health insurance policy
1. The
policyholder of a life insurance policy or health insurance policy must meet
the following requirements:
a) Be an organization legally established and operating in
Vietnam, or an individual in Vietnam aged 18 years or older with active legal
capacity at the time of entering into the insurance policy;
b) Meet the eligibility criteria for buying insurance
according to given insurance terms, conditions, and clauses.
2. The
insured person of a life insurance policy or health insurance policy is the
person whose life, health, and lifespan are covered under the insurance policy.
3. The
policyholder must have insurable interests for the insured person as prescribed
in Article 34 of the Law on Insurance Business.
4. The
beneficiary of a life insurance policy or health insurance policy is the person
designated by the policyholder to receive the insurance proceeds as agreed in
the personal insurance policy, or the insured in the group insurance policy who
is designated to receive insurance proceeds as agreed in the group insurance
policy. The designation to change the
beneficiary in a life insurance policy or health insurance policy must comply
with Article 41 and Article 42 of the Law on Insurance Business.
Article 10. Sum insured
1. The
sum insured or method of determining the sum insured is agreed upon by the
policyholder and the insurer in the insurance policy.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 11. Insurance benefits and
insurance coverage
1. Insurance
benefits, insurance coverage, and exclusion clauses must be clearly stated in
the insurance rules, conditions, and terms. Insurance
benefits, insurance coverage, and exclusion clauses must be clearly stated in
the insurance rules, conditions, and terms. If an insurer, or branch of a
foreign non-life insurer provides conditional insurance (providing a
substandard insurance in which the insured does not meet all of the standards
required by the insurer), these conditions need to be clearly stated in the
insurance policy.
2. Guaranteed
insurance benefits and non-guaranteed benefits (if any) must be clearly stated
in insurance policies.
3. The
insurance benefits for risks, the method for determining investment benefits,
and the minimum guaranteed interest rate (for universal life insurance, retirement
insurance products) must be clearly stated in insurance policies under the
types of unit-linked insurance and retirement insurance.
Article 12. Insurance rules,
conditions, and terms
Insurance rules, conditions, and terms are an integral part
of an insurance policy. Insurance rules, conditions, and
terms must comply with Article 87, Clause 2 of the Insurance Business Law, and
the following provisions:
1. In
the case of insurance rules, conditions, and terms that provide for a total and
permanent disability benefit, the following must be ensured:
a) A total and permanent disability benefit shall be
considered payable in the event of any of the following:
- The
insured person loses, is completely paralyzed, and cannot recover the function
of: both hands; or both legs; or one hand
and one leg; or both eyes; or one hand and one eye; or one leg and one eye. In this case, complete loss, complete paralysis, and
irrecoverable function of the hand is counted from the wrist upwards; complete
loss, complete paralysis, and irreversible loss of leg function from the ankle
up; complete and irreversible loss of eye function is understood as complete
loss or complete blindness;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Certification that the insured person has completely lost
body parts (hands, legs, or eyes) may be made immediately after the insurance
event occurs or after the end of treatment.
Certification of complete paralysis and the inability to
recover the function of the body parts or total blindness or physical injury of
81% or more shall be made no earlier than 180 days from the date of the
insurance event or from the date the pathology is diagnosed.
c) Insurers and branches of foreign non-life insurers may add
provisions for other cases to increase the total and permanent disability
benefit for the insured person beyond the cases specified in points a and b of
this clause.
2. In
the case of insurance rules, conditions, and terms that provide for a waiting
period (a period of time during which insurance events that occur will not be
paid by the insurer or foreign non-life insurance branch for certain health
insurance benefits), the following must be ensured:
a) The waiting period shall be calculated from the start date
of the insurance term or the date of the most recent contract reinstatement.
b) No waiting period shall be applied in the case of
accidents.
c) As for the case of diseases, the maximum waiting
period is 90 days.
As for the case where
the insurer agrees to insure for pre-existing diseases, the maximum
waiting period is 1 year;
d) As for maternity benefits, the maximum waiting period
is 270 days;
dd) In the case of products with a waiting period outside the
waiting period specified in points c and d of this clause, the insurer or
branch of a foreign non-life insurer shall provide a clear explanation in the
documentation explaining methods and factors for calculating premiums.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) A pre-existing disease is a medical condition or injury of
the insured person that has been diagnosed or treated before the effective date
or the date of the most recent reinstatement (nearest) of the insurance policy. In case an insurer or branch of a foreign non-life insurer adds
additional symptoms or signs, only symptoms or signs that occurred within
36 months before the effective date or the date of the most recent
reinstatement (nearest) of the insurance policy shall be considered. If
the insurer or branch of a foreign non-life insurer knew of these symptoms or
signs, it would not accept the insurance, would not accept the
reinstatement of the insurance policy, or would accept the insurance with
conditions, would accept the reinstatement of the insurance contract with
conditions;
b) The determination of a pre-existing disease shall be based
on medical records stored at hospitals or legally established medical
facilities, medical documents issued by the Ministry of Health and
competent authorities, or information provided by the policyholder, the
insured person on the insurance claim or the supplementary information form.
4. In
the case of insurance rules, conditions, and terms of a life insurance policy
that provide for withdrawals from the cash surrender value, withdrawals from
the cash surrender value must comply with the following provisions:
a) The interest rate for the withdrawal portion of the cash
surrender value shall not exceed the cumulative interest rate announced by the
insurer to customers plus 2%. In
the case of no cumulative interest rate being announced, the withdrawal
interest rate shall not exceed the investment rate of the policyholder fund
that does not participate in the profit sharing in the previous financial year
plus 2%.
b) If the insurance rules, conditions, and terms allow the
policyholder to stop paying premiums and use the surrender value to maintain
the validity of the policy, then they must comply with Article 37.4 of the Law
on Insurance Business.
c) Withdrawals from surrender value do not apply to
investment-linked and retirement products.
5. The
insurance rules, conditions, and terms of investment-linked insurance policies
and retirement insurance policies must clearly state the following:
a) Investment policy; investment objectives; asset allocation
of the universal life fund (for universal life products), the voluntary
retirement fund (for retirement insurance products); investment limits for each
investment portfolio of each unit-linked fund (for unit-linked insurance
products);
b) Purchase and sale transactions of unit-linked fund units
and periodic valuation of unit-linked fund units (for unit-linked insurance
products);
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) Cases where the insurer may apply measures to protect and
increase the benefits of the policyholder, including: closing a unit-linked fund to transfer assets to another
unit-linked fund with the same investment objectives; changing the name of the
unit-linked fund; splitting or merging existing unit-linked fund units;
suspending the valuation of unit-linked fund units and transactions related to
the insurance policy in the event that the stock exchange where the unit-linked
fund is investing is temporarily suspended from trading; other measures at the
request of competent authorities and legal regulations.
Insurers are responsible for notifying customers before
applying these measures.
6. If
the insurance rules, conditions, and terms provide for reinstatement of the
policy, they must comply with the following provisions:
a) The rules, conditions, and terms must clearly state the
conditions for reinstatement of the contract, the period, the documents, and
the time of reinstatement of the policy;
b) The reinstatement of a life insurance policy must comply
with Article 37.3 of the Law on Insurance Business.
7. As
for the insurance rules, conditions, and terms of insurance products specified
in point a of clause 6 of Article 32 of Decree No. 46/2023/ND-CP, insurers are
responsible for reviewing and revising to comply with this Article from July 1,
2025.
Article 13. Rights and obligations of
the life insurance policyholder and health insurance policyholder
1. The
regulations on the rights and obligations of the policyholder must be
consistent with Article 21 of the Law on Insurance Business.
2. As
for investment-linked insurance policies, in addition to the rights and
obligations set forth in Clause 1 of this Article, the policyholder also has
the following rights and obligations:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) The policyholder is obliged to sign the documents provided
by the insurer in accordance with Articles 29 and 30 of this Circular.
3. As
for retirement insurance policies, in addition to the rights and obligations
specified in Clause 1 of this Article, the policyholder also has the following
rights:
a) The right to choose and change the sum insured during the
validity of the insurance policy;
b) Temporarily close the retirement insurance account in case
of inability to pay insurance premiums as prescribed in Article 121 of Decree
No. 46/2023/ND-CP.
Article 14. Rights and obligations of
insurers and branches of foreign non-life insurers
1. The
provisions on the rights and obligations of insurers and branches of foreign
non-life insurers must be consistent with Article 20 of the Law on Insurance
Business.
2. As
for investment-linked insurance policies and retirement insurance policies, in
addition to the rights and obligations set forth in Clause 1 of this Article,
the life insurer also has the following rights and obligations:
a) The right to collect fees charged to the policyholder as
agreed in the insurance policy;
b) The obligation to notify the policyholder about the status
of the insurance policy when the account value is insufficient to pay for the
risk fee, policy management fee for the next month, leading to the
risk of the contract becoming invalid; the obligation to advise and provide
information to new policyholders about the risks of unit-linked insurance
policy in the event of policy transfer;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 15. Insurance period
1. The
insurance period is calculated from the time the insurer or branch of a foreign
non-life insurer begins to accept insurance to the date the insurance ends. The insurance period must be specified in the insurance
policy.
2. As
for retirement insurance policies, it must clearly state the accumulation
premium period and the time for receiving retirement insurance benefits.
Article 16. Effective date of the
insurance policy
1. The
insurer, branch of a foreign non-life insurer and the policyholder agree on the
effective date of the insurance policy in accordance with Clause 2 of this
Article.
2. The
effective date of the insurance policy is one of the following cases:
a) If the policyholder and the insured are still alive at the
time the insurance claim is approved by the life insurer, the effective date of
the contract is the date the policyholder submits the complete insurance claim
has paid the full insurance premium (provisional) of the insurance policy;
b) If the policyholder and the insured are still alive at the
time the life insurer issues the insurance certificate, the effective date
of the policy is the date the life insurer issues the insurance certificate,
and the policyholder has paid the full insurance premium;
c) It is the time when the insurance policy is concluded
between the non-life insurer or the branch of foreign non-life
insurer and the policyholder.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. The
insurance policy must clearly state the insurance premium amount, the premium
payment period, the premium payment frequency, the premium payment method, the
due date for payment, the extension period for payment, and the suspension of
payment (if any), the mandatory premium payment period (if any).
2. In
addition to meeting the provisions of Clause 1 of this Article, the
investment-linked insurance policy and retirement insurance policy must also clearly
state the method of allocating insurance premiums and the fees charged to the
policyholder. The fees charged to policyholder must
be in accordance with the provisions of Article 99 of Decree No. 46/2023/ND-CP.
In the event of adjusting the fees
charged to policyholder, the insurer is responsible for notifying customers
within 3 months before applying the new rate.
Article 18. Insurance payouts
1. The
deadline for submitting the insurance claim and the deadline for claim payout
must be in accordance with Articles 30 and 31 of the Law on Insurance Business.
If the insurer or branch of foreign
non-life insurer refuses to pay the insurance benefits, it must state the
reason for the refusal in writing to the claimant for insurance benefits.
2. The
insurance policy must clearly state the documents that the policyholder or
branch of foreign non-life insurer needs to provide when claiming the insurance
benefits. Insurers are not allowed to request
evidence of the insurance event that the policyholder cannot access or collect
in accordance with the relevant laws.
3. In
case an insurer or branch of a foreign non-life insurer needs to collect
additional documents to serve the claim adjudication in addition to the
documents specified in Clause 2 of Article, the cost of collecting documents
shall be borne by the insurer or branch of foreign non-life insurer.
Article 19. Dispute resolution
methods
The regulations on dispute resolution are set out in Article
32 of the Law on Insurance Business.
Chapter IV
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Section 1. APPOINTED ACTUARIES
Article 20. Duties of actuaries of
insurers, reinsurers, and foreign branches in Vietnam
1. To
ensure financial stability, insurers, reinsurers, and foreign branches in
Vietnam must use qualified actuaries who meet the conditions and standards set
out in Article 29 and Article 30 of Decree No. 46/2023/ND-CP to perform the
following tasks:
a) Calculate insurance premiums and participate in the
development of rules, conditions, and terms of insurance and reinsurance
products; confirm insurance premiums and other fees charged to policyholders
(for linked investment and retirement products) are based on statistical data
ensure the economic and technical feasibility of the product, comply with legal
regulations and ensure the claim paying ability of insurers, reinsurers, and
foreign branches in Vietnam; annually assess the difference between the presumptive
costs and actual costs of each product;
b) Calculate technical reserves in accordance with legal
regulations;
c) On a monthly basis (for life insurers, health insurers),
quarterly and annually (for non-life insurers, reinsurers, and foreign branches
in Vietnam), assess the claim paying ability of insurers, reinsurers, and
foreign branches in Vietnam and confirm in the claim paying ability report
submitted to the Ministry of Finance in accordance with legal regulations;
d) Report promptly in writing to the General Director
(Director), the Board of Directors (Board of Members) about any abnormal issues
that could adversely affect the financial situation of the company and branch
and propose remedial measures.
In serious cases that
could affect the claim paying ability of insurers, reinsurers, and foreign
branches in Vietnam, within 5 working days from the date of detection, the
actuary must report in writing to the Ministry of Finance;
dd) Evaluate the reinsurance program before submitting it to
the General Director (Director) and Board of Directors (Board of Members) for
approval;
e) Confirming the transfer of material insurance risks in
reinsurance policies;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
h) Collaborate with the risk management department to
identify risk assessment and measurement models and prepare stress test reports
and reports on the risk management situation of insurers, reinsurers, and
foreign branches in Vietnam;
i) Other tasks to ensure financial stability for companies
and branches.
2. In
addition to the tasks specified in Clause 1 of this Article, actuaries of life
insurers must perform the following tasks:
a) Re-evaluate the illustrative interest rates used in sales
illustrations, product brochures at least annually and make adjustments if
necessary;
b) Participate in the separation of owner’s fund and policyholders’
fund (premium source), and calculate the annual distribution of surplus of the
policyholder fund on the basis of fairness, rationality, and compliance with
the law. At the end of the financial year, the
actuary shall prepare a written report on the financial performance, including
a separate report on the separation of owner’s fund and policyholders’ fund, a
surplus distribution report, and a proposal for the amount of interest to be
paid to each policyholder for the competent authority of the company to decide;
c) Annually, evaluate the compliance with legal regulations
on the implementation of investment-linked insurance products and retirement
insurance of insurers;
d) Quarterly and annually, report in writing to the Board of
Directors (Board of Members) and the General Director (Director) on the current
financial situation and Members), the General Director (Director) on the actual
financial situation, forecast of future financial situation of the company,
branch; the investment activities of the company, branch, in which the risks
arising are stated and proposals on investment assets, investment term of each
type of asset to ensure that the investment term of the investment asset is
commensurate with the term of the investment asset and responsibility that has
been committed under the insurance contract.#
3. In
addition to the tasks specified in Clause 1 of this Article, actuaries of
non-life insurers, health insurers, reinsurers, and foreign branches in Vietnam
must perform following tasks:
a) Participate in separating owner’s fund and policyholders’
fund in accordance with legal regulations;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Quarterly and annually, report in writing to the Board of
Directors (Board of Members), the General Director (Director) on the actual
financial situation, forecast of future financial situation of the company,
branch; the investment activities of the company, branch, in which the risks
arising are stated and proposals on investment assets, investment term of each
type of asset to ensure that the investment term of the investment asset is
commensurate with the term of the investment asset and the responsibility that has
been committed under the insurance contract; the situation and forecast of the
future situation of losses, reserves, and insurance business efficiency.#
4. Annually,
no later than 90 days after the end of the financial year, actuaries report to
the Ministry of Finance on issues related to their duties according to Report
Form No. 13 -NT Appendix VIII (for life insurers), Report Form No. 10-SK
Appendix IX (for health insurers); Report form No. 14-PNT Appendix VI (for
non-life insurers, reinsurers, foreign branches in Vietnam) issued together
with this Circular.
Section 2. PROFESSIONAL PRACTICES
Article 21. Methods for calculating
premiums for life insurance and health insurance products (including micro
insurance products) of insurers and branches of foreign non-life insurers
1. Insurers
and branches of foreign non-life insurers are allowed to use any methods to
calculate insurance premiums for insurance products, subject to meeting the
following requirements:
a) Insurance premiums for insurance products and fees charged
to policyholders for insurance products of investment-linked insurance and
retirement insurance must be calculated based on statistical data, in
accordance with the provisions of law and ensuring the financial safety and
solvency of insurers and branches of foreign non-life insurers and must
correspond to the insurance conditions and responsibilities, honoring the
policyholder’s benefits;
b) Insurance premiums and fees must be fair and reasonable to
policyholders;
c) Insurance premiums must be determined based on age,
gender, health status and other characteristics of the insured, consistent with
the characteristics of each product. In
case a standard fee is applied to a group of insurance customers or to a group
insurance policy, the insurer or branch of a foreign non-life insurer must
clearly state the principles and methods used to determine that standard fee;
d) In the event of an increase or decrease in insurance
premiums based on the group size, sum insured, or changes to the factors for
calculating premiums leading to changes to the underlying risk; the principles and basis for the increase or decrease in
premiums must be stated in the methods and factors for calculating premiums. The premiums after the decrease must be no lower than the net
insurance premiums of the product. In
the case of a premium reduction due to direct sales, where the insurer does not
have to pay insurance commissions to insurance agents or insurance brokers, the
maximum premium reduction shall not exceed the insurance commission ratio of
the product as prescribed in Articles 51 and clause 3 Article 55 of this
Circular;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2. Within
6 months from the date of signing this circular, insurers and branches of
foreign non-life insurers shall be responsible for establishing internal
processes for developing and pricing of insurance products, which shall clearly
show the criteria for each product line, the risk assessment process and risk
mitigation methods for each product line, the product discontinuation and
re-pricing process. The internal procedures for product
development and pricing must be approved by the Board of Directors (Board of
Members) or the General Director (Director). Compliance
with the internal procedures for product development and pricing must be
reviewed annually by internal audit.
3. Documentation
explaining methods and factors for calculating premiums is set out in Appendix
III attached to this Circular (for life insurer, health insurers) and Appendix
IV attached to this Circular (for non-life insurers and branches of foreign non-life
insurers).
Article 22. Factors for calculating
premiums for life insurance and health insurance products (including micro
insurance products) of insurers and branches of foreign non-life insurers
Factors for calculating premiums for life insurance and
health insurance products (including micro insurance products):
1. Insurance
risk rates:
a) As for mortality risk rate, insurers and branches of
foreign non-life insurers can use one of the following sources:
- The
CSO 1980 mortality table specified in Appendix V of this Circular; adjusted
rates based on this CSO 1980 mortality table;
- A
mortality table built on the basis of actual data from the insurer or branch of
foreign non-life insurer for a minimum period of 10 years;
- Mortality
tables provided by the parent company of the insurer, branch of foreign
non-life insurer, reinsurance company/reinsurance organization;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) As for other risk rates other than the mortality rate
(such as hospitalization rate, disability rate, accident rate, medical expense
rate, critical illness rate...), insurers and branches of foreign non-life
insurers can use one of the following sources:
- Risk
rates published by competent authorities;
- Risk
rates built on the basis of actual data from the insurers and branches of
foreign non-life insurers for a minimum period of 5 consecutive years;
- Risk
rates provided by the parent company of the insurer, branch of a foreign
non-life insurer, reinsurance company/reinsurance organization. In this
case, the reinsurance company/reinsurance organization must meet the
rating requirements specified in Article 33 of Decree 46/2023/ND-CP in the most
recent financial year before the date of providing the reinsurance risk rate
and must have experience in reinsurance for this type of risk in the Vietnamese
or Asian market.
case of adjusting the risk rate, the insurer or branch of a
foreign non-life insurer must provide an explanation for the reason. The use of risk rates provided by the reinsurance
company/reinsurance organization must be consistent with the insurance benefits
in the rules, conditions, and terms of the insurance product.
2. Assumptions
about product implementation costs and profits of insurers and branches of
foreign non-life insurers:
a) The assumptions about product implementation costs (fixed
costs and variable costs) are determined based on statistical data and business
plans of insurers and branches of foreign non-life insurers;
b) As for insurance products with a term of 1 year or less
(including product contracts with a term of 1 year and annual renewal): insurers, branches of non-life insurers Foreign countries
must ensure that assumptions about costs and profits included in insurance
premiums do not exceed 60% of the total insurance premium;
c) As for health insurance products with a term of more than
1 year, insurers must ensure that the present value of the assumptions about
costs and profits used in the calculation does not exceed 55% of the total
insurance premium.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) Initial fees of investment-linked insurance products do
not exceed the fees in the following regulations:
Initial fees of investment-linked insurance products paid in
installments:
Payment year
Year 1
Year 2
Year 3 to year 5
Year 6 to year 10
From year 11 onwards
Initial fee/annual basic premium
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
30%
20%
2%
0%
Initial fees of investment-linked insurance products paid in
a lump sum: 10% of the lump-sum fee.
Initial fee for additional fee: 1.5%
of the additional fee of each contract year and within the first 10 years of
the insurance policy.
b) The initial fee of the retirement insurance product does
not exceed 5% of the total insurance premium collected in the fiscal year. The initial fee for the additional fee paid does not exceed
1.5% of the additional fee of each contract year and within the first 10 years
of the insurance policy;
c) The risk insurance premium for death and total permanent
disability benefits of investment-linked insurance or retirement insurance
products do not exceed 80% of the mortality rate according to the CSO 1980
mortality rate table specified in Appendix V issued with this Circular
multiplied by the sum insured.
In case an insurer
applies a mortality rate higher than 80% of the CSO 1980 mortality rate table,
it must explain the reasonableness and characteristics of the customer group;
for which the higher rate is applied;
d) Fund management fees for universal life funds and
voluntary retirement funds do not exceed 2%/year. As for unit-linked funds, the maximum fund management fee is
based on the investment policy of each unit-linked fund and does not exceed
2.5%/year for a fund with investment proportion not less than 70% in stocks,
1.5%/year for a fund with investment proportion not less than 70% in bonds and
1%/year for a fund with investment proportion not less than 70% in deposits and
other fixed income assets.
As for unit-linked funds
with other investment proportions, the maximum fund management fee is
calculated as the weighted average of the investment assets in the fund with
the maximum level of the funds mentioned above.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5. In
case of amendments to the factors for calculating premiums of life insurance
and health insurance products approved by the Ministry of Finance before this
Circular comes into force, the amendments related to the factors for
calculating premiums at the request of the company must be in accordance with
this Circular.
Article 23. Methods and factors for
calculating micro insurance premiums of mutual microinsurers
1. Mutual
microinsurers are allowed to use any methods to calculate premiums for members,
subject to meeting the following requirements:
a) The premium must be based on statistical data, in
accordance with the laws and regulations, and ensure the financial stability of
the mutual microinsurer and must be commensurate with the terms and benefits
provided for microinsurance participants;
b) The premium must ensure reasonableness and fairness to microinsurance
participants;
c) As for life and health insurance benefits, insurance premiums
must be determined based on age, gender, health status and other
characteristics of the microinsurance participants, consistent with the
characteristics of each product. In
case of applying a standard premium for all microinsurance participants, the mutual
microinsurer must clearly state the principles and methods for determining that
standard premium;
d) Mutual microinsurers must register with the Ministry of
Finance the principles of increasing and reducing premiums for participants
based on the performance of microinsurance activities and in accordance with
the organization's charter.
2. The
net premium of a microinsurance product is determined on the basis of insurance
risk rates from one of the following sources:
a) The CSO 1980 mortality table issued together with Appendix
V of this Circular or other mortality rates that are appropriate to the
characteristics of the product;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Information and data published by competent authorities;
d) Other reference sources including: risk rates of insurance markets similar to the Vietnamese
insurance market; rates provided by reinsurance companies/reinsurance
organizations; adjusted rates from the rates provided by reinsurance
companies/reinsurance organizations in line with the Vietnamese insurance
market. In this case, the mutual
microinsurer is responsible for proving the suitability and rationality of
using these reference sources.
3. The
mutual microinsurer shall determine the insurance cost ratio in the gross
premium based on statistical data on the costs of implementing microinsurance
and the product implementation plan. In
case there is no statistical data, the mutual microinsurer is allowed to apply
a maximum cost ratio not more than 60% of the gross premium.
4. In
case of amendments to the factors for calculating premiums for microinsurance
products that have been registered with the Ministry of Finance, the mutual
microinsurer must demonstrate the suitability of the amendments based on
statistical data during the product implementation period and have the
confirmation of a microinsurance actuary.
Article 24. Methods and factors for
calculating premiums for microinsurance products that prevent property risks of
insurers and branches of foreign non-life insurers
1. Insurers
and branches of foreign non-life insurers may apply any method for calculating premiums
for microinsurance products that prevent risks to their property, subject to
meeting the following requirements:
a) The premium is built to comply with point d clause 2
Article 87, clause 3 Article 144 of the Law on Insurance Business and Clause 3,
Article 3 of Decree No. 21/2023/ND-CP dated May 5 2023 of the Government on
microinsurance and in accordance with the claim paying ability and basic
protection needs of the policyholder;
b) The premium includes net premium, product implementation
costs, and expected profit. Net premium, product implementation
costs, and expected profit shall be built in accordance with clauses 2 and 3 of
this Article;
c) Register the methods and factors for calculating premiums corresponding
to the benefits to meet the basic protection needs of the policyholder against
property risks. Premium increases must be based on
factors that increase the insured risks. Premium
reductions must ensure that the premium after the reduction is not less than
the net premium in any case and is based on one or more factors that reduce,
disperse, share risk, or reduce product implementation costs. In case of
premium reduction due to direct sales, the amount of premium reduction shall
not exceed the insurance agent commission rate as prescribed in Article 51 of
this Circular.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) The net premium is determined based on the actual
statistical data of the non-life insurer or branch of foreign non-life insurer,
ensuring scale and continuity over a minimum time series of 3 consecutive
years.
b) In case the statistical data does not meet the scale and
continuity requirements as prescribed in point a of this clause, the non-life
insurer or branch of foreign non-life insurer may use the following sources to
determine the net premium:
- Net
premium published by competent authorities;
- Public
and official statistical data published by competent domestic organizations to
determine net insurance premiums;
- Net
premium provided by the parent company or foreign reinsurance
company/reinsurance organization. In this case, the reinsurer must be rated at
least "BBB" according to Standard & Poor's or Fitch,
"B++" according to A.M.Best, "Baal" according to Moody's or
equivalent ratings from other organizations with the function and experience of
rating at the latest financial year compared to the time of submitting the
application for registration of methods and factors for calculating premiums and
must have experience in reinsurance for this type of risk in the Vietnamese or
Asian market. In case of adjusting the net premium
of the reinsurance company/reinsurance organization (increase or decrease), the
insurer or branch of a foreign non-life insurer must provide an explanation for
the reason. The use of net premium provided by
the reinsurance company/reinsurance organization must be consistent with the
insurance benefits that the insurer or branch of foreign non-life insurer plans
to provide in the rules and terms of the insurance product.
3. Short-term
net premium (insurance period of less than 1 year) or long-term net premium
(insurance period of more than 1 year and not more than 5 years) shall be
determined on the basis of the net premium for a one-year insurance period and
must have an explanation of the assumptions for allocating risk corresponding
to the insurance period.
4. Non-life
insurers and branches of foreign non-life insurers in Vietnam must clearly
explain the basis and method of building assumptions about costs and profits
included in the premium.
5. Documentation
explaining the methods and factors for calculating premiums is set out in
Appendix IV issued with this Circular.
Article 25. Methods and factors for
calculating insurance premiums for motor vehicle insurance
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) The premium shall comply with Point d, Clause
2, Article 87 of the Law on Insurance Business;
b) The premium includes net premium, product implementation
costs, and expected profit. Net premium, product implementation
costs, and expected profit shall be built in accordance with clauses 2, 3, 4 of
this Article;
c) The following risk-related elements shall be used as the
factors for calculating insurance premiums: Vehicle
type as defined by the law on road traffic; business purpose (business
vehicle, non-business vehicle); vehicle use purpose (passenger
vehicle, cargo vehicle, special-purpose vehicle); vehicle production
year. In case of applying additional
risk-related elements in addition to the elements mentioned
above, non-life insurers and branches of foreign non-life insurers shall
ensure that they have data in accordance with Point a, Clause
2, Article 25 of this Circular;
d) The specific cases and grounds for increasing or
decreasing the premium shall be registered.
Premium increases must be based on factors that increase the
insured risks.
Premium reductions must ensure that the premium after the
reduction is not less than the net premium in any case and is based on one or
more factors that reduce, disperse, share risk, or reduce product implementation
costs of motor vehicle products, including the number of vehicles insured, the
choice of deductible, deductible amount, the claims history, the distribution
method for the product, and other factors (if any).In case of premium reduction
due to direct sales, the amount of premium reduction shall not exceed the
insurance agent commission rate as prescribed in Article 51 of this Circular;
dd) The premium of additional insurance clauses shall be
commensurate with the insurance conditions and liabilities; in case the
additional clause expands the coverage of insurance, the premium shall be
increased; in case the additional clause narrows the coverage of
insurance, the premium shall be reduced but in no case shall it be reduced
to less than the net premium.
2. Net
premium is the premium amount that is intended to ensure the fulfillment of
obligations that have been committed to the policyholder, corresponding to the
insurance terms and conditions.
Non-life insurers and
branches of foreign non-life insurers may build net premiums for a one-year
insurance period of motor vehicle products, subject to meeting the following
requirements:
a) The net premium is determined based on the actual
statistical data of the non-life insurer or branch of foreign non-life insurer,
ensuring scale and continuity over a minimum time series of 5 consecutive
years.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Net
premium published by competent authorities;
- Public
and official statistical data published by competent domestic organizations to
determine net insurance premiums;
- Net
premium provided by the parent company or foreign reinsurance
company/reinsurance organization. In this case, the reinsurer must be rated at
least "BBB" according to Standard & Poor's or Fitch,
"B++" according to A.M.Best, "Baal" according to Moody's or
equivalent ratings from other organizations with the function and experience of
rating at the latest financial year compared to the time of submitting the
application for registration of premium-charging methods and bases and must
have experience in reinsurance for this type of risk in the Vietnamese or Asian
market. Imp case of adjusting the net premium
of the reinsurance company/reinsurance organization (increase or decrease), the
insurer or branch of a foreign non-life insurer must provide an explanation for
the reason. The use of net premium provided by
the reinsurance company/reinsurance organization must be consistent with the
insurance benefits that the non-life insurer or branch of foreign non-life
insurer plans to provide in the rules and terms of the insurance product.
b) Net premium is determined specifically for each risk or
for a number of the following risks: collision,
collision (including collision with other objects); overturn, fall, sink, fall;
being hit by other objects; fire, explosion; natural disasters; theft; and
other risks (if any).
3. Short-term
net premium (insurance period of less than 1 year) or long-term net premium
(insurance period of more than 1 year) shall be determined on the basis of the
net premium for a one-year insurance period and must have an explanation of the
assumptions for allocating risk corresponding to the insurance period.
4. Non-life
insurers, branches of foreign non-life insurers must ensure that assumptions
about costs and profits included in insurance premiums do not exceed 50% of the
total insurance premium.
5. Documentation
explaining the methods and factors for calculating premiums is set out in
Appendix IV issued with this Circular.
Article 26. Payment of insurance
premiums by non-life insurers and branches of foreign non-life insurers
1. The
policyholder shall pay the insurance premium when entering into an insurance
policy with a non-life insurer or branch of a foreign non-life insurer.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) In case of payment of insurance premiums in lump sum: The premium payment period must not exceed 30 days from the
start date of the insurance period. In
case the insurance period is less than 30 days, the premium payment period does
not exceed the insurance period.
b) In case of payment of insurance premiums in installments: The premium payment period of the first installment shall not
exceed 30 days from the start date of the insurance period under the insurance
policy. The subsequent installments shall be
paid in accordance with the agreement between the insurer, the branch of the
foreign non-life insurer and the policyholder of the initially signed insurance
policy. insurer/branch of foreign non-life
insurer and policyholder are not allowed to agree to change the premium payment
period during the entire policy implementation process. In all cases, the premium payment period does not exceed the
insurance period under the insurance policy.
c) In case of cargo insurance for customers with multiple
insured shipments in the year or insurance for customers with many the insured
trips in the year, if the non-life insurer/branch of foreign non-life insurer
and the policyholder have signed a principle insurance policy (or open policy)
on the way to participate in insurance and payment methods, then the premium
payment periods for insurance policies with an insurance term starting in this
month must not be later than the 25th of the following month.
3. When
the insurance policy has been concluded and the non-life insurer or branch of
the foreign non-life insurer has an agreement to give the policyholder a grace
period to pay the insurance premium, the premium payment extension must be
specified in the insurance policy and is only applicable when the policyholder
has collateral or guarantees to pay the insurance premium.
Article 27. Provision of insurance
products
1. Insurers
and branches of foreign non-life insurers may only provide insurance products
in accordance with the content and scope of operations specified in their
license.
2. The
provision of insurance products through bidding must comply with the law on
insurance business and the law on bidding.
3. When
entering into an insurance policy, the insurer or branch of foreign non-life
insurer is responsible for providing the policyholder with the following
documents:
a) Insurance rules, conditions, and terms;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Sales illustration materials for life insurance products;
d) Insurance certificate or insurance policy application or
other forms as prescribed by law;
dd) Insurance application form, questionnaire related to
the insured risks, insured subject matters.
4. The
documents specified in Clause 3 of this Article are part of the insurance
policy. Insurers and foreign branches are
responsible for ensuring the consistency of the information stated in the
documents specified in Points a, b, c and d, Clause 3 of this Article.
5. As
for insurance products in investment-linked insurance, endowment insurance,
pure endowment insurance, annuities, retirement insurance:
a) Life insurers are responsible for providing the documents
specified in Points b, c and d, Clause 3 of this Article in paper copy to the
policyholder. The consideration period for
participating in insurance is calculated from the date on which the
policyholder confirms that they have received the hard copy of the above
documents.
b) The provision of the documents specified in Points a and d
of Clause 3 of this Article shall be carried out in the forms agreed upon in
the insurance policy. The insurer is responsible for
providing paper copies to the policyholder in case the policyholder requests
them.
6. As
for life insurance and health insurance products other than the insurance
products specified in Clause 5 of this Article, the provision of documents
specified in Clause 3 of this Article is carried out in the forms agreed upon
in the insurance policy.
The insurer is
responsible for providing paper copies to the policyholder in case the
policyholder requests them.
7. Insurers
and branches of foreign non-life insurers must meet the requirements specified
in Point b, Clause 3, and Clause 5 of this Article from July 1, 2024.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Summary of insurance rules, conditions, and terms shall at
least contain the following:
1. The
benefits of the insurance product, the conditions for receiving the
benefits (if any);
2. Insurance
liability exclusion clauses;
3. Contract
term, premium payment period;
4. Clearly
state the obligation to declare truthful information and legal consequences in
case the policyholder does not declare truthful information;
5. Consideration
period for participating in insurance (for policies with a term of more than 1
year);
6. Fees
charged to policyholders for investment-linked insurance and retirement
insurance products;
7. Investment
benefits and investment risks that policyholders may encounter when
participating in investment-linked insurance products;
8. Benefits
received in the event of early termination of the insurance policy, early
termination fees (if any);
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
10. Other
notes on insurance rules, conditions, and terms (if any).
Article 29. Sales illustration
materials for life insurance products
1. Sales
illustration materials for life insurance products developed by insurers must
ensure:
a) The assumptions used to calculate the illustrated benefits
have the approval of a qualified actuary before being provided to the
policyholder. These assumptions must be reviewed by
the actuary at least annually to reflect the current interest rates, investment
activities of the company, and macroeconomic trends;
b) As for products with cash surrender values, the sales
illustration materials must clearly state the conditions for receiving the cash
surrender value according to the policy terms and conditions, and the benefits,
including the specific amount that the policyholder will receive when receiving
the cash surrender value, and whether these benefits are guaranteed or not;
c) The font used in sales illustration materials is Times New
Roman, with a minimum font size of 12 or another font with an equivalent size;
d) There is an information section to remind the policyholder
about compliance with the provisions of the insurance policy to ensure their
rights and interests when participating in insurance, especially the obligation
to pay premiums and declare information. As
for insurance policies with a term greater than 1 year, the sales illustration
materials need to clearly inform the policyholder that entering into a policy
is a long-term commitment, and that canceling the policy may result in the
policyholder not receiving a value equivalent to the premiums paid.
dd) The presentation is clear, easy to understand, and avoids
creating unrealistic expectations in the policyholder about the amount of money
they may receive.
2. Sales
illustration materials for investment-linked insurance products are set out in
Form 22-NT (for unit-linked life insurance products), Form 23-NT (for
unit-linked variable life insurance products) in Appendix VIII to this
Circular. Sales illustration materials for
retirement insurance products are set out in Form 24-NT in Appendix VIII to
this Circular.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) The name and address of the insurance agent;
b) Authorized agent activities under the insurance agent
contract;
c) If an insurance agent carries out all insurance agency
activities as prescribed in Clause 5, Article 4 of the Law on Insurance
Business: sales illustration materials must
show the names and insurance agent license numbers of the employees in that
organization;
d) If an insurance agent carries out one or several insurance
agency activities as prescribed in Clause 5, Article 4 of the Law on Insurance
Business and the insurer signs an additional individual agent contract to
perform agency activities for the same insurance policy: Sales illustration materials must show the names and
insurance agent certificate numbers of the employees in that organization and
insurance agency certificates of individual agents of insurers.
4. Sales
illustration materials must have the policyholder's confirmation that they have
been fully consulted and clearly understand the contents of the sales
illustrations materials.
Article 30. Insurance application
form, questionnaires related to the insured risks, insured subject matters of
life insurance and health insurance products
1. The
insurance application form must include a confirmation section from the
policyholder that they have been clearly and fully explained about the benefits
of the insurance product and are aware of the characteristics of the product
they have chosen. For cases of participating in
insurance through an agent who is a credit institution, a foreign bank branch,
the confirmation section must also include the content that the policyholder
participates in insurance on a voluntary basis, not under duress.
2. Questionnaires
related to the insured risks and insurance subject matters include:
a) Health declaration questionnaire of the insured (for
insurance products requiring health declaration) declared and confirmed by the
policyholder;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. The
insured's health declaration questionnaire must ensure:
a) Questions about health and medical terms must be clear so
that the policyholder or the insured can clearly understand and declare fully
and accurately. In case an insurer or branch of a
foreign non-life insurer raises unclear questions or does not specify the time
or duration of the request for information, the policyholder's failure to
answer these questions correctly will not be considered a violation of the
obligation to provide information;
b) The declaration of medical history, information about
signs and symptoms related to illness does not exceed 3 years. cases where there are questions requiring the declaration of
information exceeding 3 years, the insurance company must clearly specify the
diseases that need to be declared and clearly instruct the policyholder or the
insured person about the information that needs to be declared.
4. The
questionnaire to assess the policyholder's financial capacity must ensure:
a) Include at least the following: total income (for individual policyholders), expected premium
payment and expected premium payment period;
b) These questions must have specific criteria and standards
to be able to assess the level of suitability of the insurance product that the
policyholder plans to participate in with the policyholder's financial
capacity. Insurance agents are only allowed to
advise insurance products that are suitable for the policyholder's financial
capacity within the scope of the standards set by the insurer.
5. The
questionnaire to assess the level of risk acceptance in investment must ensure:
a) Include at least the following: assessment of the policyholder's risk appetite, investment
experience;
b) These questions must be clear and specific to be able to
determine the level of risk acceptance of the policyholder, at least
detailed according to five (5) groups: Conservative
investors; moderate investors; balanced investors; low-risk investors;
high-risk investors.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
7. Insurers
and branches of foreign non-life insurers must meet the requirements specified
in this Article from July 1, 2024.
Article 31. Brochures for life
insurance and health insurance products
1. Brochures
of an insurance product must meet the following requirements:
a) Introduce basic features of the insurance product;
b) Honestly reflect basic information in the rules,
conditions, and terms of insurance products, clearly state insurance benefits
and exclusions of insurance liability, and not provide unclear information that
may mislead the policyholder about the benefits of the product;
c) If provided through an insurance agent or insurance
broker, the brochure must clearly state that this is an insurance product
provided by an insurer, a branch of a foreign non-life insurer, and not a
product of the insurance agent or insurance broker; participation in the
insurance product is not a mandatory requirement to perform or enjoy any other
service of the insurance agent or insurance broker.
d) The font used in brochure is Times New Roman, with a
minimum font size of 12 or another font with an equivalent size.
2. Brochure
for investment-linked insurance must meet the requirements of Clause 1 of this
Article and include the following:
a) Investment policies, investment objectives, asset
investment structure, committed minimum investment interest rate of the
universal life fund (for universal life insurance products); types of existing
unit-linked funds, investment policies, types of investment assets, investment
asset allocation ratio of each fund (for unit-linked insurance products);
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Clear information that the policyholder will enjoy the
entire return on the investment and will bear the full investment risk from the
unit-linked funds they have chosen (for unit-linked fund products), the
investment-linked insurance policy is a long-term commitment and the
policyholder should not cancel the policy because the fees charged to the
policyholder may be very high in the early stages of the policy;
d) Performance results of the existing unit-linked funds in
the most recent 5 fiscal years, or the entire period that the fund has been
established and operating if it is less than 5 years (for unit-linked fund
products). The insurer must clearly state that
this information is historical performance for reference purposes and is not a
guarantee of the future performance of unit-linked funds. Past investment results used as a reference must be
consistent with the unit-linked product and the unit-linked funds being
introduced.
3. Brochure
for retirement insurance must meet the requirements of Clause 1 of this Article
and include the following:
a) Investment policies, objectives and asset investment
structure of the voluntary retirement fund, minimum investment interest rate
committed to the policyholder for the premium allocated to the retirement
insurance account;
b) Rates and maximum amounts of fees charged to the
policyholder;
c) Clear information for the policyholder to know that
entering into a retirement insurance policy is a long-term commitment and the
retirement insurance account cannot be withdrawn early except in the cases
specified in Article 119 of Decree No. 46/2023/ND-CP;
d) As for insurance products that do not belong to the
retirement insurance as prescribed in Section 3, Chapter VII of Decree No.
46/2023/ND-CP, in the brochure, the insurer may not use the trade name as
retirement insurance or other names that may mislead the policyholder that
these products provide additional income for the insured when they reach the
end of their working age.
Article 32. Information and
advertising on life insurance products
1. Information
and advertising about life insurance products must comply with law. Insurers shall be liable for their advertising information
about insurance products.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) They must be presented in Vietnamese, in a clear and
easy-to-understand manner that is unambiguous and does not mislead. The
information must be accurate, objective, up-to-date, and relevant to the
current situation. Special concepts and terms must be
fully explained;
b) Insurers are not allowed to use the names, information,
symbols, images, status, reputation, correspondence of government agencies,
government officials, or other government agencies to advertise, promote, or
solicit the purchase of life insurance products.
3. Advertising
materials for unit-linked insurance products must ensure:
a) They must meet the requirements of Clause 2 of this
Article.
b) The content must be clear and unambiguous, and must not
mislead consumers into thinking that unit-linked funds are fixed-income or
guaranteed-return investments;
c) The advertising materials must not contain any statements
that could mislead consumers into thinking that the value of their investment
will always increase or is guaranteed to be profitable; insurers may not make
any guarantees or assurances about the future performance of unit-linked funds;
d) When using third-party reviews and comments or voting
results or performance rankings to advertise or introduce unit-linked insurance
products, insurers and relevant organizations and individuals must use
information that is reliable, objective, based on comparisons, real data, and
events. The information must be publicly announced or made publicly available
by a recognized financial and statistical information provider; clearly state
the reference source including the document name, name of the publishing
organization and time of publication;
dd) The advertising materials must not imply that the
government guarantees the content of the advertising, marketing, investment
strategy, or investment objectives of the unit-linked fund, or guarantees the
assets of the unit-linked fund, the unit fund value, the profitability, or the
risk of the unit-linked fund;
e) The advertising materials must not contain any information
that could lead consumers to misunderstand the profitability of the unit-linked
fund or the benefits of the unit-linked insurance product;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Customers
should carefully read the brochure, sales materials, summary of insurance
terms, and important notes in the product policy before purchasing a
unit-linked insurance product, paying attention to the fees associated
with the product;
- Unit-linked
insurance products are different from traditional insurance products, customers
must bear all investment risks corresponding to the premium paid according to
the type of risk of the unit-linked fund they have chosen;
- The
value of the customer's insurance policy account may fluctuate depending on
market conditions, and the customer may suffer losses on the premiums paid
in the event of investment losses;
- Information
about the performance of unit-linked funds in the past (if any) is for
reference purposes only and does not mean that these funds will be profitable
for customers in the future;
- Illustrative
interest rates at unit-linked funds are for reference only and may increase or
decrease depending on the actual investment performance of the unit-linked
fund. It does not mean that this interest rate is guaranteed for customers
in the future.
4. Annually,
insurers are required to inform policyholders about the status of their
endowment insurance policies with profit sharing, investment-linked insurance
policies, and retirement insurance policies. The
information on investment-linked insurance and retirement insurance policies
must be provided in accordance with Forms 25-NT (for universal insurance
policies), form No. 26-NT (for unit-linked insurance policies), form No. 27-NT
(for retirement insurance policies) of Appendix VIII issued with this Circular.
Insurers must send policyholders a
report on performance of the universal insurance fund, unit-linked fund, and
voluntary retirement fund in accordance with Forms 14-NT, 15-NT, and 16-NT in
Appendix VIII to this Circular.
Article 33. Reinsurance and retrocession
1. Insurers,
reinsurers, and foreign branches in Vietnam may reinsure or retrocede part of
their insurance liability, but they may not reinsure or retrocede all of their
insurance liability in a single insurance policy or reinsurance policy to one
or multiple insurers, reinsurers, foreign insurance organizations that accept
reinsurance, or foreign branches in Vietnam.
2. Insurers,
reinsurers, and foreign branches in Vietnam must calculate the retention limit
for each type of insurance and for each type of risk; the retention limit per
risk or per individual loss. The retention limit of insurers,
reinsurers, and foreign branches in Vietnam must meet the requirements of
Clauses 4 and 5 of this Article.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) Legal regulations on solvency;
b) Exploitation capacity;
c) Financial ability;
d) The risk acceptance levels of insurers, reinsurers, and
foreign branches in Vietnam;
dd) Arrangements for protection against major risks and
catastrophic risks;
e) The balance of financial performance;
g) The components of the insurance policy portfolio;
h) Developments in the domestic and international reinsurance
market.
4. The
maximum retention limit per risk or per individual loss shall not exceed 10% of
equity.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) The insured designates one or more specific foreign
insurers or organizations to accept reinsurance and requires the insurer,
reinsurer, or foreign branch in Vietnam to reinsure to one or more of those
designated foreign insurers or organizations;
b) The insured designates one or more specific insurance
brokers and requires the insurer, reinsurer, or foreign branch in Vietnam to
arrange reinsurance through one or more of those designated insurance brokers.
In the case of reinsurance on the instruction of the insured,
the foreign insurers, or organizations to accept reinsurance on the instruction
of the insured must meet the requirements of Article 33 of Decree No.
46/2023/ND-CP.
6. Insurers,
reinsurers, and foreign branches in Vietnam may accept reinsurance of the
liability that other insurers, reinsurers, or foreign branches in Vietnam have
insured. When accepting reinsurance, insurers,
reinsurers, and foreign branches in Vietnam must assess the risk to ensure that
it is appropriate for the solvency of the insurers, reinsurers, and foreign
branches in Vietnam and that it does not accept reinsurance for the same risks
that have been retroceded.
7. As
for finite reinsurance, within 7 days from the date of signing the reinsurance
policy, the insurer, reinsurer, or foreign branch in Vietnam must submit a
written notification signed by the legal representative to the Ministry of
Finance. The notification includes the main
contents of the reinsurance policy, the purpose of signing the contract, and
the commitment to comply with the laws and regulations on insurance business
and the accounting system applicable to insurers, reinsurers, and foreign
branches in Vietnam.
Article 34. Management of reinsurance
and retrocession program
1. Approval
of reinsurance and retrocession program:
a) To ensure safety and efficiency in reinsurance business
activities, the Board of Directors (Board of Members) or General Director
(Director) of the insurer, reinsurer, the Director of the foreign branch in
Vietnam is responsible for approving the reinsurance and retrocession program
in accordance with the financial capacity, business scale of the company,
branch and current legal regulations; review, evaluate, and adjust the
reinsurance and reinsurance program on an annual basis or when market
conditions change;
b) The reinsurance and retrocession program shall at least
contain:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Determining
an appropriate retention limit for accepted insurance risks, including retention
limit per unit of risk and maximum coverage from the foreign reinsurance
company/organization;
- Identifying
the types and methods of reinsurance most suitable for managing accepted risks;
- Methods,
standards, and procedures for selecting a foreign reinsurance
company/organization, including how to assess the level of risk and financial
safety of that foreign reinsurance company/organization;
- A
list of expected foreign reinsurance companies/organizations, taking into
account diversification and the ranking of these reinsurers;
- Method
of using the deposit of the foreign reinsurance company/organization (if any);
- Managing
accumulation risk for certain sectors, geographic regions, and specialized
products;
- Methods
of controlling the reinsurance and retrocession program, including reporting
and internal control systems.
2. Implementation
of reinsurance and retrocession program:
Based on the approved reinsurance and retrocession program,
the General Director (Director) of the insurer, reinsurer, and Director of
foreign branch in Vietnam is responsible for promulgating internal processes
and instructions on reinsurance business activities, including:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Developing standards for facultative reinsurance
contracts;
c) Compare the rules, conditions, and terms of the original
insurance policy with the terms of the reinsurance policy to ensure that each
risk is reinsured.
3. Insurers,
reinsurers, and foreign branches in Vietnam are responsible for regularly
updating the list of foreign reinsurance companies/organizations, along with
information on the level of risk, ability, and willingness to pay compensation
corresponding to the liability that has been accepted for reinsurance; deposit
requirements corresponding to the level of risk and credit rating of each
foreign reinsurance company/organization (if any).
Section 3. TECHNICAL RESERVES
Article 35. Methods, formulas, bases
for establishing unearned premium reserves for health insurance and life
insurance with a term of 1 year or less, non-life insurance
1. Establishment
method based on a fixed percentage of the total insurance premium of : insurance and reinsurance policies with a term of 1 year or
less:
a) As for cargo insurance business transported by road, sea,
inland waterway, railway, and air: 25%
of the total insurance premium for the financial year of this insurance type,
regardless of whether the policy is still in force or not.
b) As for other insurance types: 50% of the total insurance premium for the financial year of
this insurance type, regardless of whether the policy is still in force or not.
2. Establishment
method based on the coefficient of the insurance policy term:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Unearned
premium reserve
=
Premium
×
Unearned
premium ratio
For example:
The method of
calculating the unearned premium reserve on December 31, 2023 is as follows:
As for insurance and reinsurance policies with a term of 1
year and still in force on December 31, 2023:
Expiration date of the insurance
policy
Unearned premium ratio
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Quarter
2024
I
1/8
II
3/8
III
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
IV
7/8
As for insurance and reinsurance policies with a term more
than 1 year: The unearned premium ratio according
to the above formula will have a denominator equal to the term of the insurance
policy (in years) multiplied by 8. Unearned premium reserve on December 31,
2023 of an insurance policy with a term of 2 years and still valid on December
31, 2023 is calculated as follows:
Expiration date of the insurance
policy
Unearned premium ratio
Year
Quarter
2024
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1/16
II
3/16
III
5/16
IV
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2025
I
9/16
II
11/16
III
13/16
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
IV
15/16
b) The Twenty-fourths Method 1(1/24): This method relies on
the basis that premiums of insurance policies, reinsurance policies issued
within a month of the insurer/foreign branch in Vietnam/reinsurer are evenly
allocated within that month, or in other words, all insurance and reinsurance
policies of a specific quarter are assumed to take effect in the middle of that
month. Unearned premium reserve is
calculated as follows:
Unearned
premium reserve
=
Premium
×
Unearned
premium ratio
For example:
The method of
calculating the unearned premium reserve on December 31, 2023 is as follows:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Expiration date of the insurance
policy
Unearned premium ratio
Year
Month
2024
01
1/24
02
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
03
5/24
04
7/24
05
9/24
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
06
11/24
07
13/24
08
15/24
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
17/24
10
19/24
11
21/24
12
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
As for insurance and reinsurance policies with a term of more
than 1 year: The unearned premium ratio according
to the above formula will have a denominator equal to the term of the insurance
policy (in years) multiplied by 24. Unearned premium reserve on December 31,
2023 of an insurance policy with a term of 2 years and still valid on December
31, 2023 is calculated as follows:
Expiration date of the insurance
policy
Unearned premium ratio
Year
Month
2024
01
1/48
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3/48
03
5/48
04
7/48
05
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
06
11/48
07
13/48
08
15/48
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
09
17/48
10
19/48
11
21/48
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
23/48
2025
01
25/48
02
27/48
03
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
04
31/48
05
33/48
06
35/48
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
07
37/48
08
39/48
09
41/48
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
43/48
11
45/48
12
47/48
c) Daily pro-rata method: This
method may be employed for calculating the unearned premium reserve for
insurance/reinsurance policies of different terms according to the following
formula:
Unearned
premium reserve
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Premium
x Number of remaining days of the insurance/reinsurance policy
Total
number of days covered under insurance/reinsurance policy
Article 36. Methods, formulas, and
bases for establishing claim reserves
1. Method
of establishing claim reserves according to
statistics on claim records:
Under this method,
insurers, foreign branches in Vietnam, and reinsurers must establish 2 types of
reserves:
a) Claim reserve for incurred but not settled (IBNS) losses
(by the end of the fiscal year):
As for non-life insurance: claim
reserve is established for each insurance type based on the estimated claim
amount for each loss that has been reported but has not been settled by the end
of the fiscal year.
As for life insurance and health insurance: claim reserve is established for each claim application with
the reserve amount on the basis of statistics on the sum insured that may have
to be paid for each reported claim application but has not been settled by the
end of the fiscal year.
b) Claim reserve for incurred but not reported (IBNR) losses
is establish according to the following formula for each insurance type:
Claim
reserve for incurred but not reported (IBNR) loss in current fiscal year
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Total
claim amount for IBNR losses incurred in 3 consecutive previous fiscal years
x
Claim
amount incurred in current fiscal year
x
Net
revenue of insurance business in current fiscal year
x
Average
delay in claim reporting in current fiscal year
Total
claim amount incurred in 3 consecutive fiscal years
Net
revenue of insurance business in previous fiscal year
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Where:
The claim amount incurred in a fiscal year includes the
actual claim amount paid in the year plus the increase/decrease in the claim
reserve for losses that have incurred under the insurance liability but have
not been settled by the end of the fiscal year.
Average delay in claim reporting is the average time from the
time a loss incurs until the insurer, foreign branch in Vietnam, or reinsurer
receives the loss notice or claim application (calculated in number of days).
In case an insurer, foreign branch in Vietnam, or a reinsurer
does not have sufficient statistical data to establish reserves for incurred
but not reported losses according to the prescribed formula, the company,
branch must establish reserves a rate of 3% to 5% of the insurance premium for
each insurance types.
The provision at this point does not apply to life insurance
for more than 1 year.
2. Method
of establishing claim reserves according to the claims incidence rate:
This method is applied to establish claim reserves for each
insurance type based on the principle of using past claim data to calculate
claims incidence rate to predict the claim amount the insurer, foreign branch
in Vietnam, or reinsurer must pay in the future. To
calculate claim reserves using this method, insurers, foreign branches in
Vietnam, and reinsurers need to analyze past data to ensure that claim payments
over the years follow stable rules and there are no abnormalities.
For example:
Calculating claim
reserves using the claims incidence rate method for a certain insurance type on
December 31, 2023:
- Step
1: Compile all actual claims payments paid until December
31, 2023, classified by year of loss and year of payment according to
the following table (data is for illustrative purposes only):
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Year of loss
Year of claims payment
1
2
3
4
5
6
7
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2016
5.445
3.157
2.450
1.412
600
352
431
185
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5.847
3.486
1.366
848
1.045
1.054
369
2018
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
4.854
1.948
2.554
1.680
489
2019
7.835
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3.888
3.335
2.088
2020
9.763
6.517
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3.984
2021
10.745
6.184
4.549
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2022
14.137
8.116
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2023
15.162
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
According to the above claims statistics table (year 2016
line):
The amount of actual claims paid in 2016 (first payment year)
for losses incurring in 2016 is VND 5.445 million.
The amount of actual claims paid in 2017 (second payment
year) for losses incurring in 2016 is VND 3.157 million.
The amount of actual claims paid in 2018 (third payment year)
for losses incurring in 2016 is VND 2.450 million.
…………………..
The compilation of the amount of claims in subsequent years
for losses incurred in 2016 is carried out in a similar manner until no further
compensation is incurred.
In this example, after
2023 (the eighth payment year), there are no more claims to be paid for losses
incurring in 2016.
The compilation of the amount of claims for losses incurring
in the years from 2017 to 2023 is carried out in a similar manner to 2016. The
number of past years required to compile claims data will depend on the length
of time from when the loss is incurred to when the loss is fully compensated. In general, liability insurance types require more years of
past claims data to be compiled than other insurance operations.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Unit: million dong
Year of loss
Year of claims payment
1
2
3
4
5
6
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
8
2016
5.445
8.602
11.052
12.464
13.064
13.416
13.847
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2017
5.847
9.333
10.699
11.547
12.592
13.646
14.015
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5.981
10.835
12.783
15.337
17.017
17.506
2019
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
12.288
16.176
19.511
21.599
2020
9.763
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
19 843
23.827
2021
10.745
16.929
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2022
14.137
22.253
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2023
15.162
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
According to the above table of cumulative claims data (year
2016 line):
The cumulative claims amount for 2016 (first payment year)
for losses incurring in 2016 is VND 5.445 million.
The cumulative claims amount for 2017 (second payment year)
for losses incurring in 2016 is VND 3.157 million + VND 5.445 million = VND
8.602 million.
The cumulative claims amount for 2018 (third payment year)
for losses incurring in 2016 is VND 2.450 million + VND 8.602 million = VND
11.052 million.
……………………
Step 3: Calculate the claims incidence rate over the years by
dividing the cumulative claims data for the subsequent year by the previous
year.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Claims incidence rate
2/1
3/2
4/3
5/4
6/5
7/6
8/7
2016
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1,285
1,128
1,048
1,027
1,032
1,013
2017
1,596
1,146
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1,090
1,084
1,027
2018
1,812
1,180
1,200
1,110
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2019
1,568
1,316
1,206
1,107
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2020
1,668
1,219
1,201
2021
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1,269
2022
1,574
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Average claims incidence rate
1,625
1,236
1,163
1,089
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1,030
1,013
Then, calculate the average claims incidence rate from year 1
to year 2, from year 2 to year 3, from year 3 to year 4, etc., by calculating
the mean value of the claims incidence rates of each column in the table above.
- Step
4: Use the average claims incidence rate calculated in step 3 to estimate the
cumulative claims amount for each year for losses incurring in the years from
2016 to 2023 (bolded section in the table below):
Unit: million dong
Year of loss
Year of claims payment
1
2
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
4
5
6
7
8
2016
5.445
8.602
11.052
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
13.064
13.416
13.847
14.032
2017
5.847
9.333
10.699
11.547
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
13.646
14.015
14.197
2018
5.981
10.835
12.783
15.337
17.017
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
18.031
18.266
2019
7.835
12.288
16.176
19.511
21.599
22.614
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
23.595
2020
9.763
16.280
19.843
23.827
25.948
27.167
27.982
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2021
10.745
16.929
21.478
24.979
27.202
28.481
29.335
29.716
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
14.137
22.253
27.505
31.988
34.835
36.472
37.566
38.055
2023
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
24.638
30.453
35.417
38.569
40.382
41.593
42.134
According to the table above (year 2023 line):
The cumulative claims amount for 2024 (second payment year)
for losses incurring in 2023 is VND 15.162 million x 1.625 = VND 24.638 million
(1.625 is the average claims incidence rate from year 1 to year 2).
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
The cumulative claims amount for 2026 (fourth payment year)
for losses incurring in 2023 is VND 30.453 million x 1.163 = VND 35.417 million
(1.163 is the average claims incidence rate from year 3 to year 4).
……………………..
The cumulative claims amount for each year for losses
incurring in the years 2022, 2021, ..., 2016 are calculated similarly to 2023.
- Step
5: Estimate the claim reserve:
The claim reserve at the end of 2023 is estimated by
subtracting the total amount of claims already paid for those losses on
December 31, 2023 from the total amount of claims estimated to be paid for
losses incurring in the years from 2016 to 2023, where:
The total amount of claims estimated to be paid for losses incurred
in the years from 2016 to 2023 is the cumulative claims amount in the eighth
payment year of the table above.
The total amount of claims already paid for losses incurring
in the years 2016, 2017, ..., 2023 as of December 31, 2023
is the cumulative claims amount lying along the diagonal of the table above:
Unit: million dong
Year of loss
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Estimated claim reserves on
December 31, 2023
1
2
3
4
5
6
7
8
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Total claim amount already paid until
December 31, 2023
Estimated claim reserves
2016
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
14.032
14.032
14.032
0
2017
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
14.015
14.197
14.197
14.015
182
2018
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
17.506
18.266
18.266
17.506
760
2019
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
21.599
23.595
23.595
21.599
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2020
23.827
28.346
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
23.827
4.519
2021
21.478
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
29.716
29.716
21.478
8.238
2022
22.253
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
38.055
38.055
22.253
15.802
2023
15.162
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
42.134
42.134
15.162
26.972
TOTAL
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
149.872
58.469
Thus, with the above claim statistics, the estimated claim
reserves of insurance on December 31, 2023 is VND 58,469 million.
Article 37. Claim reserves for major
losses for non-life insurance
1. Establishing
claim reserves for major losses
a) Every year, non-life insurers, foreign branches in
Vietnam, and reinsurers that provide non-life insurance must establish a
reserve for major losses, even if the company or branch uses (or does not use)
this reserve to compensate for major losses in the fiscal year;
b) The maximum annual establishment is 1% to 3% of the
retained premiums by each insurance type;
c) The claim reserve shall be established until the amount of
this reserve is equal to 100% of the retained premiums in the fiscal year of
the non-life insurer, foreign branch in Vietnam, and reinsurer that provides
non-life insurance.
2. Using
claim reserves for major losses:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
An insurance type is considered to have major losses when the
total retained premiums in the fiscal year of the insurance type after establishing
unearned claim reserves and claim reserves for unsettled claims are not enough
to pay compensation for the retained liability of the company or branch for
that insurance type.
b) The maximum amount that can be used from the reserves for
major losses is calculated for each insurance type according to the following
formula:
Amount
used from reserve for major losses in the current fiscal year
=
Claim
amount to be retained in the current fiscal year
-
Total
insurance premium retained in the current fiscal year
-
Unearned
premium reserve corresponding to the liability retained must be establish in
the current fiscal year
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Claim
reserve corresponding to the retained liability in the current fiscal year
Article 38. Methods, formulas, bases
for establishing mathematical reserves for health insurance with a term more
than 1 year, and certain types of non-life insurance
1. For
health insurance policies with a term of more than 1 year, non-life insurers
and health insurers can choose the following methods to establish mathematical
reserves: The gross premium valuation, the net
premium valuation, premium reserve method based on the contract term factor, or
other methods in accordance with international practice.
In all cases, life insurers and health insurers must ensure
that the reserve amount is not lower than that established by 1/8th
method as specified in Point a, Clause 2 Article 35 of this Circular on the
basis of gross premiums.
2. As
for term life insurance, pure endowment insurance, endowment insurance, whole
life insurance, and annuities, life insurers and reinsurers that provide life
insurance business can choose the method to establish mathematical reserves for
policies with a term of more than 1 year to ensure future insurance liabilities,
such as: the gross premium valuation, the net
premium valuation, Zillmer adjustment, or other methods in accordance with
international practice.
In all cases, the mathematical reserve is now lower than the
reserve calculated using any method and basis below:
a) Establishment methods:
For policies with a term of 5 years or less: Net premium method.
For policies of pure endowment insurance, whole life
insurance, endowment insurance, annuities with a term of more than 5 years: 3% Zillmer adjustment. The
adjusted net premium used to calculate the reserve must not be higher than 100%
of the actual collected premiums.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Bases for establishment:
- 100%
of the CSO 1980 mortality table and other technical bases suitable for the
insurance benefits that the insurer commits to customers with the insurance
product. In all cases, the mortality rate
and other risk rates applied in the establishment of reserves must not be lower
than the mortality rate and risk rates that the insurer uses to calculate
premiums for the insurance product.
- The
maximum technical interest rate does not exceed 80% of the average interest
rate of government bonds with a term of 10 years or more issued in the 24
months immediately preceding the date of establishment of reserves. The technical interest rate used to establish reserves must
not exceed the average investment rate of the insurer in the previous 4 (four)
quarters and the premium interest rate of each insurance product.
The mathematical reserve is considered to be zero (0) in case
the result of calculating the mathematical reserve is negative.
For example:
In the 24 months
immediately preceding the date of reserve establishment, Government bonds with
a maturity of 10 years or more include 10-year, 15-year, 20-year, and 30-year
terms, the maximum technical interest rate is calculated as follows:
; Average
investment rate of the insurer in the previous 4 (four) quarters
; Premium
interest rate of each product)
Where:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
LS(TB)n: average interest rate of Government bonds with a
term of n years issued in the 24 months immediately preceding the date of
reserve establishment, as determined as follows:
LS(i): winning Government bond interest rate at the (i)th
auction;
k: number of winning bids for Government bonds corresponding
to a term of n years;
3. Insurance
loss reserve for universal life insurance, unit-linked insurance, and
retirement insurance products:
is the greater of the
reserve calculated using the unearned premium method or the reserve calculated
using the cash flow method to meet all future insurance benefit payment costs
throughout the contract term.
In particular, the reserve calculated according to the
unearned premium method is equal to 100% of the risk fee collected during the
period of the universal life insurance policy, unit-linked insurance policy or
retirement insurance policy.
Article 39. Methods, formulas, and
bases for establishing dividend reserve for participating life insurance
products
1. Reserve
for published dividends:
For policies with dividends paid in cash:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
=
Total
value of cash dividends announced to be paid to policyholders in the current
fiscal year
+
Accumulated
value of cash dividends announced to be paid to policyholders in previous
fiscal years but not yet paid
For policies with dividends paid in the form of accumulated
dividends:
Dividend
reserve
=
Present
value of total accumulated dividends announced to be paid to policyholders
until the current fiscal year
The basis for establishing dividend reserve is similar to the
basis for establishing mathematical reserve. The
actuary is responsible for ensuring that the establishment of the dividend
reserve meets the obligations committed in the insurance policy and legal
regulations.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
The reserve for undeclared dividends is the value of the
dividends that will be paid to policyholders in the future in order to ensure
the regulations under Article 48 of this Circular. It is calculated as the
assets of the policyholder fund with dividends minus the fund's liabilities, the
capital support from the owner, and the dividends that have been allocated in
the current year. The establishment of this reserve
must ensure the following principles:
The annual establishment amount of this reserve shall not
exceed 10% of the total surplus of the policyholder fund generated in that
year;
The total value of the reserve for undeclared dividends at
any time shall not exceed 0.5% multiplied by the average remaining term of the
policies with dividends multiplied by the total liability of the policyholder
fund at that time.
Article 40. Methods, formulas, and
bases for establishing equalization reserve for health insurance and life
insurance
1. As
for life insurance and health insurance: The
annual establishment rate is 1% of the pre-tax profit of the insurer, which is
established annually until the amount of this reserve is equal to 5% of the
insurance premiums collected in the fiscal year of the company.
2. As
for reinsurers and branches of reinsurers providing life insurance: The annual establishment rate is 1% of the pre-tax profit of
the company, which is established until the amount of this reserve is equal to
5% of the life reinsurance premiums received in the fiscal year of the company.
3. As
for non-life insurers, branches of foreign non-life insurers, and reinsurers
providing health insurance: The annual establishment rate is as
prescribed at point b, clause 1, Article 37 of this Circular. This reserve is used to pay claims when there is a large
fluctuation in the risk rate leading to the total retained insurance premiums
in the fiscal year after establishing the unearned premium reserve and the
reserve for claims that have not been settled not being enough to pay the
claims under the responsibility of the non-life insurer, foreign branch in
Vietnam, reinsurer. The maximum amount that can be used is calculated according
to the following formula:
Amount
used in the current fiscal year
=
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
-
Total
insurance premium retained in the current fiscal year
-
Unearned
premium reserve corresponding to the liability retained must be set aside in
the current fiscal year
-
Claim
reserve corresponding to the retained liability in the current fiscal year
SECTION 4. TIME TO RECOGNIZE REVENUE
Article 41. Time to recognize revenues
from non-life insurance, life insurance, and health insurance
1. Insurers
and foreign branches of non-life insurers in Vietnam shall record gross
premiums as revenues from insurance business as follows:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) There is evidence that the insurance policy has been
concluded and the policyholder has fully paid the premium;
c) When the insurance policy has been concluded and the
insurer or foreign branch of non-life insurer has an agreement with the
policyholder on the premium payment period as prescribed in points a and
c, clause 2, Article 26 of this Circular, the insurer or foreign
branch of non-life insurer shall record revenues from the premium that the
policyholder must pay according to the agreement in the insurance policy at the
beginning of the insurance period;
d) When the insurance policy has been concluded and there is
an agreement for the policyholder to pay the premium in installments under the
insurance policy, the insurer or foreign branch of non-life insurer shall
record revenues from the premium corresponding to the period or periods of
premium that have incurred, and shall not record revenues from the premium that
has not yet come due for the policyholder to pay according to the agreement
under the insurance policy.
2. Time
to recognize revenues in the case of co-insurance: non-life insurers and branches of foreign non-life insurers
shall record revenues from the original premium collected according to the
coinsurance ratio as prescribed in Clause 1 of this Article.
3. Time
to recognize revenues in the case of reinsurance: insurers,
foreign branches in Vietnam, reinsurers shall record revenues from reinsurance
premiums and other income arising from reinsurance activities according to the
reinsurance payment statement that has been confirmed.
4. Time
to recognize revenues in the case of retrocession: insurers, foreign branches in Vietnam, reinsurers shall
record retrocession fees, retrocession commissions and other revenues arising
from retrocession activities in the same period as the quarterly accounting
period in which the original premium or corresponding reinsurance premium is
recorded as a revenue.
5. As
for the remaining revenues: insurers, foreign branches in
Vietnam, reinsurers shall record into revenues immediately when a transaction
is completed, with evidence of payment approval from the parties, regardless of
whether the money has been received or not.
6. As
for expenses recorded as decreases in revenue: insurers,
foreign branches in Vietnam, reinsurers shall record a decease in revenue
immediately when a transaction is completed, with evidence of approval from the
parties, regardless of whether the money has been received or not.
7. Revenue
from providing insurance auxiliary services: insurers,
reinsurers, foreign branches in Vietnam shall record into revenue when the
services are completed or when a part of the services are completed, regardless
of whether the money has been received or not.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 42. Separation of owner’s
fund and policyholders’ fund of non-life insurers, health insurers, reinsurers,
foreign branches in Vietnam
1. Non-life
insurers, health insurers, reinsurers, foreign branches in Vietnam must
separate owner’s fund and policyholders’ fund according to Article 101 of the
Law on Insurance Business and meet the following requirements:
a) All transactions relating to assets, capital, revenues,
and expenses that are directly related to a particular source shall be recorded
separately for that source;
b) Revenues and expenses from insurance business shall be
tracked separately by type of insurance;
c) Revenues and expenses from insurance business within and
outside the territory of Vietnam shall be tracked separately;
d) Investment assets from owner’s fund and investment assets
from idle capital from technical reserves shall be recorded and tracked
separately;
dd) Revenues and expenses that are directly related to a
particular activity of a non-life insurer, health insurer, or foreign branch
shall be recorded directly for that activity. Common
revenue and expenses shall be allocated on a reasonable and consistent basis.
c) Actuaries are responsible for ensuring that transactions
involving multiple sources and insurance types must be gathered and allocated
to each source and insurance type on a fair, reasonable, and consistent basis. At the end of the year, the actuary shall determine and
adjust the allocation ratio of transactions related to many sources and
insurance types to ensure that they meet the requirements in this Circular, in
accordance with the principles registered with the Ministry of Finance and
actual implementation of business.
2. The
legal representative, actuary, and chief accountant of a non-life insurer,
health insurer, reinsurer, or foreign branch in Vietnam shall be responsible
for developing the principles for allocating revenues and expenses in
accordance with this Circular and completing the registration procedures with
the Ministry of Finance, separating the owner’s fund and policyholders’ fund,
and accurately calculating the figures for the owner’s fund and policyholders’
fund. The Board of Directors, Board of
Members of a non-life insurer, health insurer, reinsurer, or competent
authority of a foreign branch in Vietnam shall be responsible for approving the
principles for allocating revenues and expenses and supervising the
implementation of these allocation principles after they are approved by the
Ministry of Finance.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
4. On
an annual basis, a non-life insurer, health insurer, reinsurer, or foreign
branch in Vietnam shall be responsible for reporting the separation of the owner’s
fund and policyholders’ fund using the form specified by the Ministry of
Finance and with the confirmation of an independent auditor.
5. In
case the reinsurer or foreign reinsurer branch does not have an agreement to
collect premiums and pay insurance benefits directly to the policyholder, the
reinsurer or the foreign branch of a reinsurer shall not be required to
separate the owner’s fund and policyholders’ fund in accordance with this
Circular.
Article 43. Allocation of
transactions relating to assets, capital, revenues, and expenses related to
multiple sources of non-life insurers, health insurers, reinsurers, and foreign
branches in Vietnam
1. Determination
of assets belonging to owner’s fund and policyholders’ fund is done as follows:
a) Assets belonging to the policyholders’ fund include assets
formed from technical reserves and assets corresponding to accounts payable
allocated to policyholders’ fund (excluding internal accounts payable between
funds);
b) Assets belonging to owner’s fund include fixed assets,
construction works in progress, investment real estate and other assets formed
from owner’s fund and accounts payable allocated to owner’s fund.
2. Determination
of owner’s fund and policyholders’ fund is done as follows:
a) Capital sources belonging to policyholders’ fund include:
Technical reserves;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Capital sources belonging to owner’s fund include:
Owner’s fund;
Debts which are directly related to the owner’s fund or
allocated to the owner’s fund on the basis of corresponding allocation
criteria.
3. Revenues
from policyholders’ fund include:
a) Revenue from insurance business;
b) Revenue from investment of policyholders’ fund;
c) Other income which are directly related to the policyholders’
fund or allocated to the policyholders’ fund on the basis of corresponding
allocation criteria.
4. Revenues
from owner’s fund include:
a) Revenue from investment of owner’s fund;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Other income which are directly related to the owner’s
fund or allocated to the owner’s fund on the basis of corresponding allocation
criteria.
5. Costs
of the policyholders’ fund:
a) Insurance claims costs after deducting reinsurance claim
proceeds, technical reserves, insurance agent commission costs, insurance agent
management costs; insurance agent rewards, support, and other benefits from
insurance agent activities under the insurance agent contract;
b) Loss assessment costs, contract management costs by the
leading insurer in the case of co-insurance, costs of preventing, limiting
risk, loss, risk assessment costs of the insured subject matter, costs of
settling 100% compensation for goods;
c) Costs for investment of policyholders’ fund;
d) Other costs directly related to policyholders’ fund or
costs allocated to policyholders’ fund;
dd) Costs of using insurance auxiliary services directly
related to policyholders’ fund;
e) General costs including management costs of the company
and other costs allocated to policyholders’ fund on the basis of the allocation
principle registered with the Ministry of Finance;
g) Other costs and deductions as prescribed by law.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) General costs including management costs of the company
and other costs allocated to the owner’s fund on the basis of the allocation
principle registered with the Ministry of Finance;
b) Costs for agent services;
c) Costs for investment of owner’s fund;
d) Costs of using insurance auxiliary services directly
related to owner’s fund;
dd) Costs of providing insurance auxiliary services;
e) Other costs which are directly related to the owner’s fund
or allocated to the owner’s fund on the basis of corresponding allocation
criteria.
7. Criteria
for allocating some general operating costs:
a) Criteria for allocating some general operating costs
between policyholders’ fund and owner’s fund:
Management costs: are
allocated to policyholders’ fund and owner’s fund on the basis of statistics on
the time served for each source;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Criteria for allocating some general operating costs
between insurance types in the policyholders’ fund:
Management costs: are
allocated on the basis of the proportion of total premium income of each
insurance type;
Financial operating costs: are
allocated on the basis of the proportion of invested assets of each insurance
type;
Sales costs are allocated on the basis of the proportion of
total premium income of each insurance type;
Direct operating costs of insurance business: Costs of appraising and issuing contracts are allocated
according to premium income; Loss assessment costs are allocated according
to the original amount of insurance claims.
c) In case non-life insurers, health insurers, reinsurers,
and foreign branches in Vietnam use allocation criteria for general costs other
than the criteria specified at points a and b of this clause, they must ensure
fairness between the sources and be consistent with the actual operations of
the company or branch.
Article 44. Transfer of assets and
compensation for deficit of the policyholders’ fund of non-life insurers,
health insurers, reinsurers, foreign branches in Vietnam
1. If
the policyholders’ fund is in deficit (i.e., the value of assets is lower than
the amount of liabilities), the non-life insurer, health insurer, reinsurer, or
foreign branch in Vietnam must make up the deficit using cash or deposits from
the owner’s fund. If the policyholders’ fund has a surplus (i.e., the value of
assets is higher than the amount of liabilities), the company or branch is
entitled to a partial or full refund of the previously contributed amount, but
without interest on the policyholders’ fund, provided that the refund does not
make the policyholders' fund in deficit.
2. Non-life
insurers, health insurers, reinsurers, foreign branches in Vietnam must record
in writing all transactions related to the deficit compensation from the owner’s
fund and the reimbursement from the policyholders’ fund to the owner’s fund. These transactions must be reflected on the policyholders’
fund and owner’s fund separation report with the confirmation of the actuary
and the chief accountant of the company or branch.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. Life
insurers must separate, record, manage, and track the policyholders' fund and
owner’s fund in accordance with Article 101 of the Law on Insurance Business. The policyholders' fund may be further separated, depending
on the actual implementation of the life insurer’s activities and relevant
legal regulations.
2. Separation
and accounting of assets, capital, revenues, expenses, and financial
performance of each fund must meet the following requirements:
a) All transactions relating to assets, capital, revenue, and
expenses that are directly related to a particular fund shall be recorded
separately for that fund;
b) Assets formed from a policyholders' fund shall be used to
meet the liabilities and costs associated with that policyholders' fund's
business transactions. Insurers are not allowed to use the
assets of the policyholder fund to pay fines imposed on their violations or
make advertisements unrelated to insurance products, or give charitable
donations;
c) Revenues and expenses from insurance business within and
outside the territory of Vietnam shall be tracked separately;
d) Actuaries are responsible for ensuring that transactions
involving multiple funds must be gathered and allocated to each fund on a fair
and reasonable basis. At the end of the year, the actuary
shall determine and adjust the allocation ratio of transactions related to
multiple funds to ensure that they meet the requirements in Article 46 of this
Circular and actual implementation of business.
3. The
legal representative, actuary, and chief accountant of the life insurer are
responsible for the implementation of the fund separation and the accurate
calculation of the data of the policyholders’ fund and owner’s fund.
4. Every
year, life insurers shall submit a policyholders' fund and owner’s fund
separation report in accordance with Form 08-NT in Appendix VIII of this
Circular and with the confirmation of an independent auditor.
Article 46. Allocation of
transactions relating to assets, capital, revenues, and expenses related to
multiple funds of life insurers
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) Assets of policyholders' fund shall include: assets formed
from insurance technical reserves and assets corresponding to liabilities
allocated to the policyholders' fund (excluding internal liabilities between
funds); for policyholders' fund of universal life insurance, unit-linked
universal life insurance, and retirement insurance, the assets of
these policyholders' funds shall at least include assets formed from customer account
values and assets corresponding to liabilities allocated to policyholders' fund
excluding internal liabilities between funds except for internal liabilities
for the initial contribution of the owner when establishing the fund);
b) Assets of owner’s fund shall include: assets formed from
owner’s fund, prepaid expenses, fixed assets, unfinished construction
works, and surpluses belonging to the owner at policyholders’ funds as
prescribed by law.
2. Determination
of capital of the policyholder fund or owner fund is done as follows:
a) Capital of policyholders' fund shall include:
- Insurance
technical reserves, excluding equalization reserve;
- Liabilities
directly related to policyholders' fund or allocated to policyholders' fund on
a corresponding basis.
b) Capital sources belonging to owner’s fund include:
- Owner’s
equity;
- Debts
which are directly related to the owner’s fund or allocated to the owner’s fund
on the basis of corresponding allocation criteria;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. Revenues
of policyholders' fund shall include:
a) Revenue from insurance business;
b) Revenue from investment of the policyholders’ fund;
c) Other income directly related to policyholders' fund or
allocated to policyholders' fund on a corresponding basis.
4. Revenues
of the owner’s fund include:
a) Revenue from investment of the owner’s equity;
b) Revenue from providing insurance auxiliary services;
c) Other income which are directly related to the owner’s
fund or allocated to the owner’s fund on the basis of corresponding allocation
criteria.
5. Expenses
of the policyholders’ fund:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Loss assessment costs, insurance agent management costs;
insurance agent bonuses, support, and other benefits from insurance agent
activities under the agreement in the insurance agent contract, prevention and
limitation of losses, risk assessment costs of the insured subject matter;
c) Costs for the policyholders’ fund's investment ;
d) Costs of using insurance auxiliary services directly
related to each policyholders’ fund;
dd) Other costs directly related to the policyholders’ fund;
e) General costs allocated to the policyholders’ fund under
the fund separation principle registered with the Ministry of Finance;
g) Other costs and deductions as prescribed by law.
6. Expenses
of the owner’s fund include:
a) General operating costs allocated to the owner's fund on
the basis of corresponding allocation criteria, including salary and
salary-related expenses, advertising costs, tax costs, fixed asset depreciation
costs, office rental costs, office supplies costs, and other costs;
b) Costs for equalization reserve;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) Costs of using insurance auxiliary services directly
related to owner’s fund;
dd) Other costs directly related to the owner’s fund or other
general costs allocated to the owner’s fund under the fund separation principle
registered with the Ministry of Finance.
7. Criteria
for allocating some general operating costs:
a) Criteria for allocating some general operating costs
between the policyholders’ fund and the owner’s fund:
- Management
costs: are allocated to the policyholders’
fund and the owner’s fund based on statistics on the time served for each fund;
each year, the life insurer is responsible for re-evaluating the
allocation ratio based on the time served for each fund in the current financial
year and deciding the cost allocation ratio applicable for the following
financial year on the basis of ensuring fairness between funds and being
consistent with the actual operating conditions of the company;
- Financial
operating costs: are allocated on the basis of the
proportion of invested assets of each fund.
b) Criteria for allocating some general operating costs
between the policyholders’ funds:
- Management
costs: are allocated between the
policyholders’ funds based on the proportion of total premium revenue of each
policyholders’ fund;
- Financial
operating costs: are allocated on the basis of the
proportion of invested assets of each policyholders’ fund;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Direct
operating costs of insurance business:
Costs of appraising and issuing contracts are allocated based
on new premium revenue;
Costs of assessing and paying insurance benefits are
allocated based on the amount of original insurance payment.
c) In case life insurers use allocation criteria for general
costs other than the criteria specified at points a and b of this clause, they
must ensure fairness between the funds and be consistent with the actual
operations of the company.
Article 47. Transfer of assets and
compensation for deficits of the policyholders' fund of life insurers
1. In
case the policyholders' fund is in deficit (the value of assets is less than
the total technical reserves and liabilities allocated to that policyholders'
fund), the life insurer must be responsible for making up it with cash or
deposits at financial institutions from the owner’s fund to that policyholders'
fund at least by the deficit amount within a period of at least 3 months from
the time of determining the deficit. When
that policyholders' fund has a surplus, the company may be reimbursed in part
or in full for the amount previously made up but may not earn interest on the
policyholders' fund, provided that the reimbursement does not make the
policyholders' fund deficit.
2. Life
insurers shall not transfer assets or capital from the policyholders' fund to
the owner’s fund, except in the following cases: Reimbursement of investment
contributions to form the linked fund, voluntary retirement fund and corresponding
interest (if any) in accordance with the Government's regulations;
reimbursement of the amount that has been transferred from the owner’s fund to
the policyholders' fund to compensate for the deficit in accordance with Clause
1 of this Article or transfer of surplus.
3. In
case of maintaining multiple policyholders' funds, life insurers shall not
transfer assets or capital between policyholders' funds, except for the
allocation of fees for investment-linked insurance products and retirement
insurance products. Life insurers shall not use the
assets of one policyholders' fund to make up another policyholders' fund in
deficit.
4. Life
insurers must record in writing all transactions related to the compensation
for deficits from the owner’s fund to the policyholders' fund and reimbursement
from the policyholders' fund to the owner’s fund. These
transactions must be reflected in the periodic report on policyholders’ fund
and owner’s fund separation with the confirmation of the actuary and the chief
accountant of the company.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. At
the end of each fiscal year, life insurers may use all or part of the surplus
of the policyholders' fund of life insurance policies with profit sharing to
distribute to policyholders and owners. In
all cases, life insurers shall be responsible for ensuring that all
policyholders receive not less than 70% of the surplus of the total interest
earned or the surplus difference between the actual and the assumed used in the
premium calculation method and factors, including: assumptions about the risk rate related to insurance
benefits, assumptions about investment rates, and assumptions about costs,
whichever is greater. The determination of the surplus
difference between the actual and the assumed used in the insurance premium
calculation method and factors at this point does not apply to fiscal years
prior to 2023.
2. Life
insurers must be approved by the Ministry of Finance for the application or
change of the method of distributing the surplus of the policyholders' fund
with profit sharing before applying, except for the case of changing the risk
rate assumption specified in Clause 1 of this Article. Life insurers are free to choose the method for determining
and distributing surplus, but must ensure that the results of distributing
surplus to policyholders are not less than the amounts as prescribed in Clause
1 of this Article. Surplus distribution report shall be
made in accordance with the regulations of Form 8-NT Appendix VIII attached to
this Circular.
SECTION 6. INFORMATION DISCLOSURE
Article 49. Publication of
information
Insurers, reinsurers, and foreign branches in Vietnam are
responsible for publishing, preserving, and maintaining the following regular,
ongoing, and extraordinary public information:
1. The
language of the information published on the websites of insurers, reinsurers,
and foreign branches in Vietnam is Vietnamese and other foreign languages (if
any).
2. Regular,
ongoing, and extraordinary public information is published on the websites of
insurers, reinsurers, and foreign branches in Vietnam.
3. The
public information on the websites of insurers, reinsurers, and foreign
branches in Vietnam must display the time the information was published, and
must ensure that users can search for and access the data on these websites.
4. Regular
public information and extraordinary public information must be retained in the
form of written documents (if any) and electronic data and accessible on the
website of insurers, reinsurers, and foreign branches in Vietnam for at least 5
years from the date the information is published.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
6. In
case the obligation to disclose information arises on a day off or public
holiday according to the law, the insurer, reinsurer, or foreign branch in
Vietnam shall fully fulfill the obligation to disclose information according to
legal regulations on the first working day following the day off or holiday.
Article 50. Content of extraordinary
public information
1. The
value of additional declared interest or additional accumulated dividends in
the fiscal year to ensure compliance with the surplus distribution principles
under the law.
2. The
adjustment of the declared investment rate of the universal linked fund, the
voluntary retirement fund, or the adjustment of the unit fund price of the
unit-linked funds that are mispriced.
3. Finite
reinsurance activities.
4. Unusual
developments that affect the solvency and reputation of the company in
insurance business activities as prescribed in Point a, Clause 2, Article 106
of the Law on Insurance Business.
Chapter V
INSURANCE AGENTS AND
INSURANCE BROKERS
SECTION 1. INSURANCE AGENTS
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. An
insurer or branch of foreign non-life insurer shall pay insurance agent
commissions to the insurance agent in accordance with Clause 3 of this Article
after the insurance agent provides services to the insurer or foreign non-life
insurance branch.
2. Insurers
and branches of foreign non-life insurers, based on Clause 3 of this Article
and their specific conditions and characteristics, develop regulations for
paying insurance agent commissions for uniform and public application.
3. The
maximum insurance agent commission rate payable on the actual insurance premium
collected from each insurance policy that the insurer or foreign non-life
insurance branch pays to the insurance agent is implemented as follows (except
for cases stipulated in Clause 3.4 of this Clause):
3.1. Maximum insurance agent commission rates for non-life
insurance policies:
No.
Insurance type
Maximum insurance agent commission
rate (%)
1
Property insurance
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2
Cargo insurance
10
3
Hull and liability insurance of shipowners for seagoing
vessels
5
4
Hull and liability insurance of shipowners (except seagoing
vessels
15
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Liability insurance
5
6
Aviation insurance
0,5
7
Motor vehicle insurance (excluding motor vehicle liability
insurance)
10
8
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
10
9
Credit and financial risk insurance
10
10
Other damage insurance
10
11
Agricultural insurance
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
12
Guarantee insurance
10
Maximum insurance agent commission rate for compulsory
insurance:
No.
Compulsory insurance
Maximum insurance agent commission
rate (%)
1
Compulsory liability insurance of motor vehicle owners
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2
Compulsory liability insurance of motorcycle and moped
owners
20
3
Compulsory fire insurance
5
4
Compulsory construction insurance during construction
5
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Compulsory professional liability insurance of construction
consultancy
5
6
Compulsory third-party liability insurance of construction
activities
5
7
Compulsory insurance for construction workers working on
construction sites
5
- The
insurance agent commissions for full coverage insurance policies are calculated
by the total insurance agent commissions of each insurance type in the full
coverage insurance policies.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) As for individual life insurance policies:
The maximum insurance agent commission rates are applied to
the following insurance types:
- For
insurance policies issued before July 1, 2024, the maximum insurance
agent commission rates are as follows:
Insurance type
Maximum insurance agent commission
rate (%)
Payment in installments
Payment in lump sum
Policy first year
Policy second year
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. Term
life insurance
40
20
15
15
2. Pure
endowment insurance
- Term
of insurance from 10 years or less
15
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
10
10
5
5
5
5
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. Endowment
insurance:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
25
40
7
10
5
10
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5
7
- Term
of insurance over 10 years
4. Whole
life insurance
30
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
15
10
5. Annuities
25
10
7
7
6. Universal
life insurance
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
10 years or less
25
7
5
5
Over 10 years
40
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
10
7
7. Unit-linked
insurance
40
10
10
7
- For
insurance policies issued before July 1, 2024, the maximum insurance
agent commission rates are as follows:
+ For insurance policies with a term of 1 year or less and 1
year of annual renewal: 20%
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Insurance type
Maximum insurance agent commission
rate (%)
Payment in installments
Payment in lump sum
Policy first year
Policy second year
Policy following years
1. Term
life insurance, whole life insurance
40
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
15
15
2. Pure
endowment insurance, annuities, endowment insurance:
- Term
of insurance from 10 years or less
25
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5
5
- Term
of insurance over 10 years
30
20
10
7
3. Universal
life insurance, unit-link insurance
30
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
10
7
b) Insurance agent commission for retirement insurance
policies: 3% of total insurance premium;
c) As for group life insurance policies: The maximum insurance agent commission rate is equal to 50%
of the corresponding rates applicable to individual life insurance policies of
the same type.
3.3. Maximum insurance agent commission rates for health
insurance policies:
20%.
3.4. As for insurance products that have separate written
instructions, follow that separate written instructions.
4. In
case a mutual microinsurer provides microinsurance to its members through a
microinsurance agent, the maximum insurance agent commission rate is 10% of the
actual premium collected for each insurance policy.
Article 52. Bonuses and support for
insurance agents and other benefits as agreed in the insurance agent contract
1. Bonuses
and support for insurance agents and other benefits as agreed in the agency
contracts of non-life insurers and branches of foreign non-life insurers are
provided as follows:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) As for non-life insurance: Total
bonuses, support, and other benefits of insurance agents do not exceed 50% of
the insurance agent commission of all non-life insurance policies marketed in
the fiscal year.
2. Bonuses
and support for insurance agents and other benefits as agreed in the agent
contracts of life insurers and health insurers are provided as follows:
a) For agents who market new insurance policies: Total bonuses, support, and other benefits of insurance
agents in each fiscal year do not exceed 20% of the actual insurance premium
collected from insurance policies with a term of 1 year or less and renewable
annually, and 30% of the actual first-year insurance premium collected
from insurance policies with a term of more than 1 year.
b) For agents who service renewed insurance policies with a
term of more than 1 year:
Total bonuses, support,
and other benefits of insurance agents in each fiscal year do not exceed 7% of
the actual renewed insurance premium collected in the fiscal year.
3. Life
insurers that currently pay agent commissions, support, and other benefits to
agents at a rate higher than the rate prescribed in Clause 2 of this Article
shall be responsible for reviewing, building a roadmap, and implementing a plan
to reduce the rate of payment of the above-mentioned amounts in each fiscal
year and completing the implementation of the plan by no later than December
31, 2025.
4. The
Board of Directors (Board of Members) of the life insurer shall be responsible
for approving the plan prescribed in Clause 3 of this Article before December
31, 2023, and for monitoring and supervising the roadmap and plan.
Article 53. Provision of insurance
products through insurance agents
1. During
the process of advising on insurance products, insurance agents or employees of
a corporate insurance agent must provide the policyholder with all accurate
information about the insurance product, using the materials provided by the
insurer or foreign non-life insurance branch. Insurance
agents or employees of a corporate insurance agent may not build their own
product brochures or sales illustrations, or arbitrarily change the content of
the product brochures or sales illustrations provided by the insurer or foreign
non-life insurance branch.
2. When
providing investment-linked insurance products, individual insurance agents or
employees of a corporate insurance agent must comply with the following
regulations:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Inform the policyholder of the calculation tool that
allows the policyholder to build their own insurance plan and the terms and
conditions of the insurance product they plan to participate on the website of
the insurer specified in clause 4 of Article 97 of Decree
No. 46/2023/ND-CP; analyze customer information, including the needs
and financial capabilities of the policyholder; survey the policyholder's risk
appetite to advise the policyholder to participate in the appropriate unit fund
(for unit-linked insurance products);
c) Clearly explain to the policyholder about the benefits and
the specific risks of the product, and require the policyholder to confirm
in the documents specified in Article 30 of this Circular;
d) May not compare or guarantee that the investment
performance of one unit fund is better than that of another unit fund or of
another insurer;
dd) Record some of the contents related to the product
consultation process at the time the policyholder signs the insurance
application form. The recording content must ensure at
least the following information:
- Name
and certificate number of the insurance agent;
- Name,
age, address, and phone number of the policyholder;
- The
content of the consultation of the agent or employee of the corporate insurance
agent on insurance benefits, investment benefits, and investment
risks that the policyholder may encounter when participating in the unit-linked
insurance product, information on the fees charged by the insurer to the
policyholder and the conditions for receiving the benefits agreed upon in the
insurance policy;
- Notification
of the insurance premiums and fees and payment terms selected by the
policyholder to confirm their financial capacity compliance;
- Notification
to the policyholder of the time to consider participating in
insurance, the rights and obligations of the policyholder, including
the obligation to honestly declare, the main contents of the benefits
agreed upon in the insurance policy and the conditions for receiving those
benefits;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
In case there are other related information and this
information relates to private life and personal privacy, the recording
must be approved by the policyholder to record the content of that information.
Insurers must ensure compliance with this regulation no later
than 1 year after the effective date of this Circular.
3. The
corporate insurance agent must comply with the following regulations:
a) Explain to policyholders that insurance products
distributed through the corporate insurance agent are insurance products. Participation in insurance is not a prerequisite for using
other products or services offered by the corporate insurance agent;
b) The corporate insurance agent must reconcile the data on
new insurance contracts, insurance premium revenue, and effective insurance
contracts they executed with the insurer on a monthly basis;
c) Credit institutions and foreign bank branches that are
acting as insurance agents are prohibited from advising, introducing, offering,
or arranging for the conclusion of investment-linked insurance policies for
customers within 60 days before and 60 days after the full disbursement of the
loan.
4. As
for the provision of insurance products through a corporate insurance agent, an
insurer or branch of foreign non-life insurer must comply with the following
regulations:
a) Conduct periodic monitoring and inspection to ensure the
quality of the product introduction and consulting activities of the employees
of that corporate insurance agent; and promptly coordinate with the corporate
insurance agent to inspect, review, and handle customer complaints
related to the consulting activities of the employees of the corporate
insurance agent and take actions against violations (if any);
b) May not sign additional individual agent contracts with
employees of the corporate insurance agent to market the same insurance policy. If the insurer or branch of foreign non-life insurer has
signed an individual insurance agent with an employee of the corporate
insurance agent to deal with the same insurance policy before the effective
date of this Circular must review and ensure compliance with this regulation
before July 1, 2024.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) Conduct independent inspection of the content of product
consulting by agents.
If provided through a
corporate insurance agent, the inspection shall be carried out before the
decision to issue the contract.
The content of the
inspection shall be aimed at assessing whether the policyholder participates in
insurance on a voluntary basis and whether the products advised are suitable
for the financial needs of the policyholder;
b) May not issue an insurance policy in case the recording
content as prescribed in Point dd, Clause 2 of this Article does not contain
the policyholder's confirmation of participating in insurance on a voluntary
and appropriate basis, and in line with the financial capacity, and
insurance needs of the policyholder;
c) Store and keep confidential all documents and recording
data under Clause d, Article 2 of this Circular for at least 5 years from
the effective date of the insurance policy. The
insurer may only use this information for the purpose of evaluating the quality
of insurance agent activities, resolving complaints related to insurance
agent activities and anti-fraud activities in the field of insurance
business, or providing them for competent authorities upon request.
6. In
case an insurer or branch of a foreign non-life insurer signs multiple agent
contracts to market the same insurance policy, content of authorized insurance
agent activities as the basis for payment of agent commissions, bonuses,
support, and other benefits as agreed in the agent contract. In all cases, the total amount of commissions paid shall not
exceed the maximum commission rate prescribed in Article 51 of this Circular.
SECTION 2. INSURANCE BROKERAGE
ACTIVITIES
Article 54. Provision of insurance
products through insurance brokers
1. Insurance
brokers must enter into a written agreement with customers when providing
insurance brokerage services.
The agreement must
specify the content of the insurance brokerage activities, the term of the
agreement, the rights, and obligations of each party.
2. In
case an insurance broker is authorized by an insurer or foreign non-life
insurance branch to collect insurance premiums, pay insurance benefits or
insurance payouts, the authorization must comply with the following principles:
a) The authorization must be made in writing, clearly stating
the duration and scope of authorized activities, rights, and obligations of
each party;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- The
policyholder's responsibility to pay insurance premiums is fulfilled when the
policyholder has paid the insurance premiums agreed upon in the insurance
policy to the insurance broker;
- When
the policyholder has paid the insurance premium, the insurance broker is
responsible for paying the above-mentioned insurance premium to the insurer or
foreign non-life insurance branch within the agreed period between the insurer
or foreign non-life insurance branch and the insurance broker, but no more
than 30 days from the date of receipt of the insurance premium.
c) In case an insurance broker is authorized by an insurer or
foreign non-life insurance branch to pay insurance benefits or insurance
payouts:
- The
insurer or foreign non-life insurance branch is still responsible to the
insured person or beneficiary for the sum insured that the insurer or foreign
non-life insurance branch is obliged to pay to the insured person or
beneficiary;
- The
insurance broker enterprise is responsible for paying the sum insured to the
insured or beneficiary within no more than 5 working days from the date of
receiving the sum insured from the insurer or branch of a foreign non-life
insurer and not more than the payment period for insurance benefit or insurance
payout as prescribed by law.
Insurance brokers may only carry out the authorized activities
specified in points b and c of this paragraph if the authorized activities are
related to insurance policies arranged by the insurance brokers. Insurance brokers are not allowed to receive remuneration
from insurers or foreign non-life insurance branches to carry out the
authorized activities specified in points b and c of this clause.
3. Insurance
brokers are allowed to cooperate with other insurance brokers that are allowed
to operate in Vietnam to carry out original insurance brokerage activities. This cooperation must be agreed in writing, specifying the
obligations, rights and interests and the ratio of sharing insurance brokerage
commissions of each party.
Article 55. Insurance brokerage
commission
1. Insurance
brokers are entitled to receive original insurance brokerage commission from
insurance premiums.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
When the policyholder has paid the insurance
premium, the insurer or foreign non-life insurance branch is responsible
for paying the above-mentioned original insurance brokerage commission from the
insurance premium received within the agreed period, but no more than 30 days
from the date of receipt of the insurance premium.
3. In
all cases, the original insurance brokerage commission shall not exceed 15% of
the insurance premiums actually collected by the insurer, foreign non-life
insurance branch of each insurance transaction within each insurance policy
arranged through the insurance broker.
4. Reinsurance
brokerage commission shall be agreed by the parties in accordance with
international practice.
Article 56. Information disclosure
1. Insurance
brokers are responsible for posting information in accordance with Article 49
of this Circular for the contents that must be publicly disclosed in accordance
with Clause 8, Article 138 of the Law on Insurance Business.
2. Before
providing advice to customers, an insurance broker must disclose to customers
in writing information about the tasks that the insurance broker is authorized
by the insurer, reinsurer, or foreign branch in Vietnam, the relationship with
the insurer, reinsurer, or foreign branch in Vietnam and other information that
may cause conflicts of interest.
Chapter VI
REPORTING BY INSURERS,
RE-INSURERS, FOREIGN BRANCHES IN VIETNAM, MUTUAL MICROINSURERS, INSURANCE
BROKERS, FOREIGN REPRESENTATIVE OFFICES IN VIETNAM
Article 57. Responsibility for
preparing and sending reports
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2. Insurers, foreign
branches in Vietnam, reinsurers, and insurance brokers are
responsible for the accuracy and authenticity of financial
statements, statistical reports, operational reports, and other
additional reports as required by law.
Article 58. Report content
1. Financial
statements:
a) Insurers, foreign branches in
Vietnam, reinsurers, and insurance brokers shall carry out financial
settlement and comply fully with the regulations on financial
reporting, prepare and submit financial statements to the Ministry of
Finance as per applicable law;
b) Insurers, foreign branches in
Vietnam, reinsurers, and insurance brokers must prepare and submit
quarterly financial statements, semi-annual financial statements, and
annual financial statements to the Ministry of Finance;
c) As for annual financial statements: they shall be implemented in accordance with the regulations
of the law on accounting and must be audited by an independent audit organization
approved to audit public interest entities in Vietnam. The opinion of the independent audit organization must
include at least the following material financial matters:
- As
for insurers, foreign branches in Vietnam, reinsurers: Reinsurance and retrocession, establishment of technical
reserves, solvency, commissions, revenues, expenses, profits and profit
distribution, investments from equity, investments from technical reserves,
fixed assets and depreciation, receivables, liabilities, equity, construction
in progress costs.
- As
for insurance brokers: Revenues, expenses, profits
and profit distribution, investments, fixed assets and
depreciation, receivables, payables, and equity.
2. Owner’s
fund and policyholders’ fund separation report:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) The confirmation of the independent auditor for the
owner’s fund and policyholders’ fund separation report must include at least
the following material matters:
The surplus distribution
between the policyholder's fund and the policyholders’ fund; the compensation
for deficit between the owner’s fund and the policyholders’ fund; the amount
transferred from the policyholders’ fund to the owner’s fund in the period;
c) The confirmation of the independent auditor for the
owner’s fund and policyholders’ fund separation report of the non-life insurer,
foreign branch in Vietnam, or reinsurer must include at least the following
material matters:
- Investment
assets and investment performance results of the annual report on investment
activities from owner’s equity and the annual report on investment activities
from idle capital from technical reserves; allocation of revenues, expenses and
financial performance of each insurance type of the annual report on separate
monitoring of revenues and expenses from insurance business activities by each
type.
- The
separation, recording, and separation tracking of owner’s fund and
policyholders’ fund are done in accordance with the regulations of the law.
3. Report
on performance of universal life fund, unit linked fund, and voluntary
retirement fund:
a) Every year, life insurers shall prepare a report on
performance of universal life fund, unit-linked fund, and voluntary retirement
fund and have confirmation from an independent auditor that the report on
performance of universal life fund, unit-linked fund, and voluntary retirement
fund are established and presented in accordance with law;
b) The confirmation of the independent audit organization must
include at least the following material financial matters: the initial investment capital contribution to form the fund
and the interests generated; the difference arising between the assets at the
general life fund, unit-linked fund, and voluntary retirement fund and owner’s
fund and policyholders’ fund separation report (if any);
c) The report on performance of the universal insurance fund,
unit-linked fund, and voluntary retirement fund must include at least the
information in Forms 14-NT, 15-NT, and 16-NT in Appendix VIII to this Circular.
4. Operational
reports: insurers, foreign branches in
Vietnam, reinsurers, and insurance brokers shall prepare and submit
to the Ministry of Finance the operational reports on the monthly, quarterly,
and annual basis, and with the electronic version as follows:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Monthly
report on performance: Form No. 1-PNT
- Quarterly/annual
report on insurance premium revenue: Form
No. 2-PNT
- Quarterly/annual
report on revenues and claims by distribution channels: Form No. 3-PNT
- Quarterly/annual
report on claims: Form No. 4-PNT
- Quarterly/annual
report on technical reserves:
+ Detailed report on establishment of technical reserves: Form No. 5A-PNT
+ Summary report on establishment of technical reserves: Form No. 5B-PNT
- Quarterly/annual
report on investment:
+ Report on investment activities from equity: Form No. 6A-PNT
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Quarterly/annual
report on solvency: Form No. 7-PNT
- Annual
ASEAN Report: Form No. 8-PNT
- Annual
report on participation in cross-border insurance service provision Form No. 9-PNT
- Quarterly/annual
separate monitoring report of revenues and expenses from insurance business for
each type: Form No. 10A-PNT
- Quarterly/annual
separate monitoring report of revenues and expenses from mandatory insurance
business: Form No. 10B-PNT
- Quarterly/annual
report on financial performance of motor vehicle physical insurance: Form No. 11-PNT
- Owner’s
fund and policyholders’ fund separation report: Form
No. 12-PNT
b) As for reinsurers and branches of foreign non-life
insurers, the report forms are set out in Appendix VII issued with this
Circular:
- Quarterly/annual
report on reinsurance revenues: Form
No. 1-TBH.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Quarterly/annual
technical reserve report:
using the same forms as
non-life insurers (for non-life reinsurance and health reinsurance), using the
same forms as life insurers (for life reinsurance).
- Quarterly/annual
report on investment:
+ Report on investment activities from equity: Form No. 6A-PNT.
+ Report on investment from idle capital from technical
reserves: using the same forms as non-life
insurers (for non-life reinsurance and health reinsurance), using the same
forms as life insurers (for life reinsurance).
- Quarterly/annual
report on solvency: Form No. 3-TBH.
- Owner’s
fund and policyholders’ fund separation report: Form
No. 12-PNT
c) As for life insurers, the report forms are set out in
Appendix VIII issued with this Circular:
- Monthly
report on performance: Form No. 1-NT
- Quarterly/annual
report on number of policies and sum insured: Form
No. 2-NT
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Monthly
report on unit-linked insurance product provision: Form No. 17PNT
- Quarterly/annual
report on establishment of technical reserves:
+ Report on establishment of mathematical reserves: Form No. 4-PNT
+ Report on establishment of unearned premium reserves: Form No. 4-PNT
+ Report on establishment of claim reserves: Form No. 4-PNT
+ Report on establishment of dividend reserves: Form No. 4-PNT
+ Report on establishment of guaranteed interest rate
reserves: Form No. 4-PNT
+ Report on establishment of equalization reserves: Form No. 4-PNT
+ Quarterly/annual report on establishment of technical
reserves for unit-linked insurance: Form
No. 18PNT
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Monthly/quarterly/annual
report on solvency: Form No. 6-NT
- Annual
ASEAN Report: Form No. 7-NT
- Owner’s
fund and policyholders’ fund separation report: Form
No. 8-NT
- Quarterly/annual
report on distribution channel scale: Form
No. 9-NT
- Quarterly/annual
report on revenues by distribution channels: Form
No. 10PNT
- Quarterly/annual
report on branches, representative offices, and customer service centers: Form No. 11PNT
- Annual
report on bonuses, support, and other benefits for insurance agents: Form No. 19PNT
- Quarterly/annual
report on rates of cancellation and termination of policies by distribution channels:
Form No. 21PNT
d) As for health insurers, the report forms are set out in
Appendix IX issued with this Circular:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Quarterly/annual
report on number of policies and sum insured: Form
No. 2-SK
- Quarterly/annual
report on cancellation of health insurance policies: Form No. 3-SK
- Quarterly/annual
report on establishment of technical reserves:
+ Report on establishment of mathematical reserves for health
insurance: Form No. 4-PNT
+ Report on establishment of unearned premium reserves for
health insurance: Form No. 4-PNT
+ Report on establishment of claim reserves: Form No. 4-PNT
+ Report on establishment of equalization reserves: Form No. 4-PNT
- Quarterly/annual
report on investment: Form No. 5-SK
- Monthly/quarterly/annual
report on solvency: Form No. 6-SK
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Separate
monitoring report of revenues and expenses from insurance business for each
type: Form No. 8-SK
- Quarterly/annual
report on revenues by distribution channels: Form
No. 11PNT
dd) As for insurance brokers, the report forms are set out in
Appendix IX issued with this Circular:
- Quarterly/annual
report on insurance brokerage: Form No. 1-MGBH
- Quarterly/annual
report on insurance broker performance: Form
No. 2-MGBH
- Quarterly/annual
report on participation in cross-border insurance service provision: Form No. 3-MGBH
- Annual
report on online insurance provision: Form
No. 4-MGBH
5. Report
on insurance agent activities:
Insurers, foreign
branches of non-life insurers, and mutual microinsurers shall prepare and
submit quarterly and annual reports to the Ministry of Finance, along with an
electronic version, in accordance with Appendix XI attached to this Circular:
a) Report on the list of agents who violate legal regulations
and have had their agent contracts terminated by insurers, branches of foreign
non-life insurers, and mutual microinsurers using the Form No. 1 - DLBH. This report must be simultaneously sent to the Vietnam
Insurance Association to notify other insurers, branches of foreign non-life
insurers, and mutual microinsurers;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Report on insurance agent training activities using the
Form No. 03-DLBH;
d) Report on the list of insurance agents using the Form No.
04-DLBH.
6. Report
on insurance products: Within the first 15 days of each
month, insurers and branches of foreign non-life insurers shall report to the
Ministry of Finance the list of new products that have been implemented or
discontinued in the previous month (if any).
a) Non-life insurers, branches of foreign non-life insurers: Form No. 13CSDL, Appendix I issued with this Circular;
b) Life insurers: Form
No. 12-NT, Appendix VIII issued with this Circular;
c) Health insurers: Form
No. 9-SK Appendix IX issued with this Circular.
7. Report
on unexpected developments:
Within 7 days of the
occurrence of unexpected developments or non-compliance with financial
requirements or other regulatory requirements, insurers, reinsurers, and
foreign branches in Vietnam are required to report to the Ministry of Finance
on the developments, their qualitative and quantitative impact on the company's
or branch's solvency, financial condition, and reputation, and any proposed
solutions or recommendations to the Ministry of Finance (if any).
8. In
addition to the financial statements, statistical reports, and operational
reports required under Articles 1, 2, and 3 of this Regulation, the Ministry of
Finance may request insurers, foreign branches in Vietnam, reinsurers, and
insurance brokers to submit additional reports on the company's or branch's
operating and financial condition for statistical and market analysis purposes.
Article 59. Data cutoff time,
reporting deadlines, reporting methods
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) Data cutoff time is from the 1st to the last day of
the reporting month;
b) Reporting deadline is no later than 15 days after the
end of the month;
c) Reporting methods: In
person, by post, by email, or via an application developed by the Ministry of
Finance.
2. Quarterly
reports:
a) Data cutoff time is from the 1st day of the first
month of the quarter to the 30th or 31st day of the last month of the reporting
quarter.
b) Reporting deadline is no later than 30 days after the
end of the quarter.
c) Reporting methods: In
person, by post, by email, or via an application developed by the Ministry of
Finance.
3. Semi-annual
reports:
a) Data cutoff time is from January 1 to June 30 of the
reporting year.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Reporting methods: In
person, by post, by email, or via an application developed by the Ministry of
Finance.
4. Annual
reports:
a) Data cutoff time is from January 1 to December 31 of
the reporting year.
b) Reporting deadline is no later than March 31 of the
following fiscal year.
c) Reporting methods: In
person, by post, by email, or via an application developed by the Ministry of
Finance. From July 1, 2024, the application
used is the Insurance Business Supervision and Management Information System of
the Ministry of Finance.
Article 60. Report on performance of
foreign representative offices in Vietnam
1. Foreign
representative offices in Vietnam must report to the Ministry of Finance on
their performance every 6 months and annually using the form specified in
Appendix XII of this Circular, in specific:
a) Data cutoff time for the first 6 months is from
January 1 to June 30 of the reporting year. Data
cutoff time for the year is from January 1 to December 31 of the reporting
year;
b) Reporting deadline is no later than July 30 for the
first six months of the year, March 31 of the following fiscal year for
the year;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2. In
addition to the regular reports mentioned above, where necessary, the Ministry
of Finance may request foreign insurance representative offices in Vietnam to
provide reports, documents, or explanations related to their activities.
Article 61. Notice of changes and
information disclosure of foreign representative offices in Vietnam
1. Within
30 days from the date of issuance or amendment or supplementation of the
representative office license, the foreign representative office in Vietnam
must publish the following information in a Vietnamese newspaper or on a
Vietnamese electronic newspaper:
a) Name, country of origin, and address of the foreign
insurer, foreign reinsurer, foreign financial conglomerate, or foreign
insurance broker;
b) Name and location of the representative office;
c) Scope and duration of the representative office's
activities.
2. Within
30 days of any change, the foreign insurer, foreign reinsurer, foreign
financial conglomerate, or foreign insurance broker (in the case of a change in
the head of the representative office) or the foreign insurance representative
office in Vietnam (in the case of a change in the location of the
representative office or the personnel of the representative office) must
notify the Ministry of Finance. The
notification must include the following:
a) Written notice according to the form specified in Appendix
XIII of this Circular;
b) Curriculum vitae, copy of 12-digit or 9-digit ID card, or
passport or other legal personal identification documents as prescribed by law
in case of changing the head of representative office and personnel of the
foreign representative office in Vietnam;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Chapter VII
IMPLEMENTATION
Article 62. Entry into force of
Circular
1. This
Circular shall come into force on the date of signing, except for the cases
specified in Clauses 2 and 3 of this Article.
2. Points
a, b, c, d, dd, i Clause 1, Points b, d Clause 2, Points a, b Clause 3 Article
20, Points a, b Clause 1 Article 29, Articles 33, 34, 45, 46, 47, 48, 51,
Clause 1, Article 52, Article 55, Section 3, and Section 4 Chapter IV of this
Circular come into force as of January 1, 2023.
3. Clause
2 and Clause 3, Article 29 of this Circular come into force as of July 1, 2024,
sales illustration documents of universal linked products must at least have
the information in the Appendix I to Circular No. 52/2016/TT-BTC; sales
illustration documents of unit linked products must at least have the information
in the Appendix II to Circular No. 135/2012/TT-BTC; sales illustration
documents of retirement insurance products must at least have the information
in the Appendix IV to Circular No. 115/2013/TT-BTC.
4. This
Circular supersedes the following Circulars:
a) Circular No. 50/2017/TT-BTC dated May 15, 2017 of the
Minister of Finance on guidelines for Decree No. 73/2016/ND-CP dated July 1,
2017 of the Government on elaboration of the Law on Insurance Business and the
Law on amendments to the Law on Insurance Business, except Article 20 and
Chapter VI. Article 20 and Chapter VI of Circular
No. 50/2017/TT-BTC come into force until December 31, 2027;
b) Circular No. 01/2019/TT-BTC dated January 2, 2019 of the
Ministry of Finance on amendments to Circular No. 50/2017/TT-BTC dated May 15,
2017 of the Ministry of Finance on guidelines for Decree No. 73/2016/ND-CP
dated July 1, 2016 of the Government on elaboration of the Law on Insurance
Business and the Law on amendments to the Law on Insurance Business, except for
Clause 2, Article 1 of Circular No. 01/2019/TT-BTC, effective until December
31, 2027;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) Article 1 Circular No. 14/2022/TT-BTC dated February 28,
2022 of the Ministry of Finance on amendments to Circular No. 50/2017/TT-BTC
dated May 15, 2017 of the Ministry of Finance on guidelines for Decree No.
73/2016/ND-CP dated July 1, 2016 of the Government on elaboration of the Law on
Insurance Business and the Law on amendments to the Law Insurance business and
Circular No. 04/2021/TT-BTC dated January 15, 2021 of the Ministry of Finance
on elaboration of Decree No. 03/2021/ND-CP dated January 15, 2021 of Government
on compulsory insurance for civil liability of motor vehicle owners;
dd) Circular No. 135/2012/TT-BTC dated August 15, 2012 of the
Ministry of Finance on guidelines for unit-linked insurance products except
Appendix II. Appendix II issued with Circular No.
135/2012/TT-BTC comes into force until June 30, 2024;
e) Circular No. 115/2013/TT-BTC dated August 20, 2013 of the
Ministry of Finance guiding retirement insurance and voluntary retirement funds
except Appendix IV. Appendix IV issued with Circular No.
115/2013/TT-BTC comes into force until June 30, 2024;
g) Circular No. 130/2015/TT-BTC dated August 25, 2015 of the
Ministry of Finance on amendments to Circular No. 115/2013/TT-BTC dated August
20, 2013 of the Ministry of Finance guiding insurance retirement insurance and
voluntary retirement funds;
h) Circular No. 52/2016/TT-BTC dated March 21, 2016 of the
Ministry of Finance guiding the implementation of universal life insurance
products except Appendix I. Appendix I issued together with Circular No. 52/
2016/TT-BTC comes into force until June 30, 2024.
5. In
the course of implementation, if the relevant documents cited in this Circular
are amended, supplemented, or replaced, follow the new document that has been
amended, supplemented, or replaced.
6. Difficulties
that arise during the implementation of this Circular should be reported to the
Ministry of Finance for consideration./.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.