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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
155/2007/TT-BTC
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Hanoi,
December 20, 2007
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CIRCULAR
GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE NO.
45/2007/ND-CP DATED MARCH 27, 2007, DETAILING THE IMPLEMENTATION OF A NUMBER OF
ARTICLES OF THE LAWON INSURANCE BUSINESS
Pursuant to Law No. 24/2000/QH10 dated
December 9, 2000, on insurance business;
Pursuant to the Governments Decree No. 45/2007/ND-CP dated March 27, 2007,
detailing the implementation of a number of articles of the Law on Insurance
Business;
Pursuant to the Governments Decree No. 77/2003/ND-CP dated July l, 2003,
defining the functions, tasks, powers and organizational structure of the
Ministry of Finance;
The Ministry of Finance provides specific guidance as follows:
I. GENERAL PROVISIONS
1. This Circular guides the implementation of
the Government’s Decree No. 45/2007/ND-CP dated March 27, 2007, detailing the
implementation of a number of the Law on Insurance Business regarding insurance
business, re-insurance, insurance brokerage and insurance agents' activities
carried out by insurance enterprises, insurance brokerage enterprises and
insurance agents; the establishment and operation of Vietnam-based
representative offices of foreign insurance enterprises and insurance brokerage
enterprises.
2. Insurance enterprises, insurance brokerage
enterprises, insurance agents and concerned organizations and individuals shall
abide by the provisions of this Circular and relevant law; ensure cooperation,
fair competition and anti-monopoly in insurance business activities.
3. The Vietnam Insurers Association shall
enhance its self-management role and boost cooperation and fair
competition among insurance enterprises and insurance brokerage
enterprises for the sake of lawful rights and interests of organizations and
individuals participating in insurance.
4. The Ministry of Finance shall create favorable
conditions for insurance enterprises and brokerage enterprises to conduct
business activities on an equal footing; protect lawful rights and interests of
organizations and individuals participating in insurance and take measures to
strictly handle violations of the law on insurance business.
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1. Licensing procedures.
1.1. The Ministry of Finance shall grant
establishment and operation licenses (referred to as licenses for short) to
insurance enterprises and insurance brokerage enterprises which satisfy the
conditions specified in Article 6 and file dossiers of application for licenses
as prescribed in Article 7 of the Government's Decree No. 45/2007/ND-CP dated
March 27, 2007, detailing the implementation of a number of articles of the Law
on Insurance Business (referred to as Decree No. 45/2007/ND-CP). Applications
for licenses shall be made according to the form prescribed in Appendix l to
this Circular (not printed herein).
1.2. Within 60 days after receiving a valid and
complete dossier as prescribed, the Ministry of Finance shall grant a license
or issue a written reply on its refusal to grant a license to an insurance
enterprise or insurance brokerage enterprise. Licenses shall be made according
to the form prescribed in Appendix 2 to this Circular (not printed herein)
2. Contents of appraisal of dossiers of
application for licenses
2.1. Appraisal of the legal status
2.1.1. For investors being legal persons
a/ Notarized copies of the establishment
decision, establishment and operation license and business registration
certificate of the organization. For dossiers of application for licenses to
establish foreign-invested enterprises, notarized copies of the establishment
decision, establishment and operation license and business registration
certificate of the insurance brokerage enterprise in the foreign country in
which it is headquartered are required (the copy of the business registration
certificate must be authenticated by the agency with which the organization has
made registration within three months before the date of submission of the
dossier application for a license);
b/ Organization and operation charters of
organizations that contribute capital to establishing an insurance enterprise
or insurance brokerage enterprise.
c/ The Investors’ paper of authorization to the
representative (if any). For dossiers of application for licenses to establish
enterprises with 100% foreign capital, the paper of authorization to the person
expected to be appointed as general director (director) in Vietnam is required.
The authorized person shall submit notarized copies of his/her personal
certification papers as prescribed in Article 18 of the Government’s Decree No.
88/2006/ND-CP dated August 29, 2006, on business registration;
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e/ The document of a competent authority of the
country in which the enterprise is headquartered certifying that the foreign
investor is permitted to conduct the forms of insurance business proposed to be
carried out in Vietnam, for dossiers of application for the establishment of
foreign-invested enterprises;
f/ The joint-venture contract with principal
contents specified in the Investment Law and its guiding documents, for
dossiers of application for licenses to establish joint-venture enterprises;
g/ Minutes of investors' meetings agreeing on
the establishment of an insurance enterprise or insurance brokerage enterprise,
for dossiers of application for licenses to establish joint-venture enterprises
or joint-stock enterprises;
h/ A document signed by investors being founding
shareholders (members) authorizing a representative to:
- Finalize and submit the dossier of application
for a license; sign the application for a license to establish an insurance
enterprise or insurance brokerage enterprise;
- Sign documents to complete the dossier of
application for an establishment and operation license of an insurance
enterprise or enterprise brokerage enterprise until a license is granted by the
Ministry of Finance;
- Sign documents requesting approval of the
titles of chairman of the board of management, chairman of the members'
council, company president (collectively referred to as president), and general
director (director) of the insurance enterprise or insurance brokerage enterprise
before it officially commences its operation;
- Open a frozen account at a commercial bank
lawfully set up and operating in Vietnam and request investors to deposit money
into this account according to the registered list and collect the bank's certifications
of deposit amounts paid by investors;
- Convene and chair the first shareholders' or
members' general meeting.
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2.1.2. For individual investors:
a/ Notarized copies of their lawful personal certification
papers as prescribed in Article 18 of the Government’s Decree No. 88/2006/ND-CP
dated August 29, 2006, on business registration;
b/ Judicial records, made according to the form
prescribed in Circular No. 07/1999/TTLT-BTP-BCA of February 8, 1999, dated the
Ministry of Justice and the Ministry of Public Security providing for the grant
of judicial records to investors being founding shareholders (or members).
2.2. Appraisal of financial capacity
2.2.l. A list of organizations and
individuals that contribute capital to establishing an insurance enterprise or
insurance brokerage enterprise, specifying organizations and individuals being
founding shareholders (members); levels of contributed capital; number and
types of shares (for dossiers of application for licenses to establish
joint-stock enterprises); modes of capital contribution; and corresponding time
limit for capital contribution;
2.2.2. Founding shareholders shall jointly hold
at least 50% of the insurance enterprise or insurance brokerage enterprise for
at least three years (for dossiers of application for licenses to establish
joint-stock enterprises);
2.2.3. The document of a competent authority of
the country in which the enterprise is headquartered certifying that the
foreign investor has a sound financial status and fully meets management
requirements in its country by the end of the financial year preceding the year
of application for a license;
2.2.4. Structure of capital contributed to
establishing an insurance enterprise or insurance brokerage enterprise in
accordance with the Government’s Decree No. 46/2007/ND-CP dated March 27, 2007,
providing for the financial regimes applicable to insurance enterprises and
insurance brokerage enterprises (referred to as Decree No. 46/2007/ND-CP for
short) and its guiding document.
2.2.5. Proofs evidencing investors' capacity
to remit adequate capital as registered for the establishment of an
insurance enterprise or insurance brokerage enterprise:
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b/ Capital contributed to establishing an
insurance enterprise or insurance brokerage enterprise must come from lawful
sources; it is not permitted borrowed capital or entrusted investment capital
in any forms as capital contributed to establishing an insurance enterprise or
insurance brokerage enterprise;
c/ The bank's certification of the charter
capital amount already remitted into the frozen account by each organization
and individual according to the registered list in the dossier of application
for a license.
2.3. Appraisal of the feasibility of the
business plan for the first five years
2.3.1. General assessment of the
insurance enterprise or insurance brokerage enterprise’s business plan in light
of general market circumstances, including potential challenges and prospects;
2.3.2. Assessment of the to be-established
insurance enterprise or insurance brokerage enterprise’s competitiveness,
proving its advantages when participating in the market;
2.3.3. Analysis of insurance operations, clients
and networks to be established;
2.3.4. The insurance enterprise or insurance
brokerage enterprise's strategy on the development and expansion of its
operational network;
2.3.5. The accounting balance sheet and report
on business results, turnover and indemnity of each insurance operation, plan
on financial investment from own capital and operational reserves. Projected
figures must based on grounded assumptions;
2.3.6. Draft processes of underwriting, survey,
compensation, internal control, financial management and investment, and
management of re-insurance programs;
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2.3.8. The expected solvency margin as guided in
Decree No. 46/2007/ND-CP and its guiding document; plan on supplementation of
capital in case the solvency margin is insufficient as prescribed by law;
2.3.9. Information technology: The estimated
financial investment in information technology; the capacity of information
technology application, stating the expected time of technology application;
types of to be-applied technologies; to be-appointed employees and their
capabilities for information technology application;
2.3.10. Conditions for performance of insurance
operations, for operations subject to conditional performance;
2.3.11. Model organization, operational
functions, structure and number of employees of each section; and the
enterprise's plan on initial training and regular training.
2.4. Appraisal of the administration capacity of
managers and executives of the insurance enterprise or insurance brokerage
enterprise
2.4.l. The list of managers and executives of
the insurance enterprise or insurance brokerage enterprise, their curricula
vitae, judicial records and notarized copies of their diplomas evidencing their
professional capacity and qualifications in conformity with Clause 1, Section
IV, of this Circular.
2.4.2. Written commitments of individuals who
will work as managers and executives if the insurance enterprise or insurance
brokerage enterprise is licensed.
2.5. Appraisal of rules and terms of insurance
operations proposed to be proposed to be performed.
Rules, terms and premium tariffs must be
elaborated in accordance with Article 20 of Decree No. 45/2007/ND-CP.
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3. Procedures to be carried out before the insurance
enterprise or insurance brokerage enterprise officially commences its operation
3.l. Within 12 months after being licensed, the insurance enterprise or
insurance brokerage enterprise shall complete the following procedures in order
to officially conduct insurance business activities:
3.1.1. To remit into the state budget licensing
fees as prescribed by law;
3.1.2. To fully pay a deposit at a commercial
bank lawfully set up and operating in Vietnam as prescribed in Article 6 of
Decree No. 46/2007/ND-CP.
3.l.3. To convene a meeting to elect the Board
of Management, president and general director (director) as prescribed in its
charter in accordance with law; and to complete procedures of application for
approval of the president and general director (director);
3.l.4. To have a seal carved, register
for a tax identification number and open a transaction account at a bank as
prescribed by law;
3.l.5. To register with the Ministry of
Finance the method of deduction for setting up operational reserves as
prescribed by law. Life insurance enterprises shall send relevant dossiers to
the Ministry of Finance for the latter to approve their insurance products to
be provided and their actuaries. These provisions do not apply to insurance
brokerage enterprises;
3.l.6. To announce its operation in
accordance with Clause 1, Article 9, of Decree No. 45/2007/ND-CP.
3.2. The insurance enterprise or insurance
brokerage enterprise may only use the capital amount already remitted into the
frozen account as its charter capital after being officially licensed by the
Ministry of Finance.
III. MODIFICATION AND
SUPPLEMENTATION OF LICENSES
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1. Change of an enterprise's name
An insurance enterprise or insurance brokerage
enterprise that wishes to change its name shall send to the Ministry of finance
the following documents:
1.1. A written request for approval for renaming
of the enterprise, made according to Appendix 3 to this Circular (not
printed herein);
1.2. The written approval of a competent
authority, as prescribed in its charter for renaming of the enterprise.
2. Increase or decrease of an insurance
enterprise or insurance brokerage enterprise's charter capital level.
An insurance enterprise or insurance brokerage
enterprise that wishes to change its charter capital level shall send to the
Ministry of Finance the following documents;
2.1. A Written request for approval for change
of the charter capital level, made according to the form prescribed in Appendix
3 to this Circular (not printed herein);
2.2. The written approval of a competent
authority, as prescribed in the enterprise’s charter for change of the charter
capital level;
2.3. The plan on the increase of the insurance
enterprise or insurance brokerage enterprise’s charter capital, clearly
determining:
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2.3.2. Business efficiency on the basis of the
new charter capital: the estimated after-tax profit-to-own capital ratio after
the increase of capital; the dividend level in the year right before the
increase of capital; profit-to-capital and profit-to-total asset ratios; and
solvency of the insurance enterprise. These figures must be estimated on the
basis of grounded assumptions.
2.3.3. The enterprise’s administration,
management and supervision capacity corresponding to its increased capital
amount and expanded scope of operation;
2.3.4. The feasibility of the plan on capital
increase: the total charter capital to be increased and modes of capital
mobilization.
All cases of increasing charter capital by
offering of securities to the public must comply with the law on securities and
securities market. The State Securities Commission shall grant licenses for
offering securities to the public on the basis of the Ministry of Finance’s
approval.
2.4. The plan on the decrease of an insurance
enterprise or insurance brokerage enterprise’s charter capital must prove the
enterprise’s capacity to pay all its debts and other asset liabilities after
its charter capital level is decreased. One-member limited liability companies
may not decrease their charter capital.
3. Opening or termination of operation of
branches or representative offices.
3.1. An insurance enterprise or insurance
brokerage enterprise that wishes to open branches or representative offices
must meet conditions specified in Article 11 dated Decree No. 46/2007/ND-CP and
the following specific conditions:
3.1.1. Satisfying conditions on actual charter
capital prescribed in Decree No. 46/2007/ND-CP and its guiding documents;
3.1.2. Having paid fines, if any, not exceeding
VND 15 million for administrative violation of regulations on insurance
business over the three last years up to the time of submission of the
application for approval for opening of a branch or representative office.
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3.2.2. The written approval of a competent
authority as prescribed in the enterprise's charter for the opening of branches
or representative offices;
3.2.3. The judicial record and diplomas
evidencing the qualifications of the person to be appointed as head of the
branch or representative office;
3.2.4. The regulation on organization and
operation of the branch or representative office, covering the following
principal contents:
a/ Specific regulations on the function and
tasks assigned by the enterprise to the branch, including the function of
authorized representation and responsibilities of the branch's head before
clients and law;
b/ Specific regulations on the contents of
authorized representation functions of the enterprise's representative office;
c/ Specific regulations on the supply of
information, reporting, finance and accounting of operations of the branch or
representative office to ensure that the enterprise's head office is capable of
controlling all operational risks of its branch or representative office;
d/ Other regulations according to supervision
and management requirements of each insurance enterprise or insurance brokerage
enterprise.
3.2.5. Proofs on the right to use the venue
where the branch or representative office is located (rented or owned).
3.3. The branch and representative office of an
insurance enterprise or insurance brokerage enterprise must officially commence
its operation within six (6) months after its opening is approved by the
Ministry of Finance.
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3.4.l. An application for approval for
termination of the operation of a branch or representative office, made
according to the form prescribed in Appendix 3 to this Circular (not printed
herein);
3.4.2. The written approval of a competent
authority, as prescribed in the enterprise's charter for termination of the
operation of branches or representative offices;
3.4.3. The report on the operation of the branch
or representative office over the last three years. If the branch or
representative office has been operating for less than three years, a report on
operation since opening is required;
3.4.4. Responsibilities and matters arising from
the termination of the operation of the branch or representative office and
plan to handle them.
3.5. A dossier of application for approval for
opening of an overseas branch or representative office of an insurance
enterprise or insurance brokerage enterprise complies with the law on offshore
investment.
4. Relocation of head offices, branches or
representative offices of insurance enterprises or insurance brokerage
enterprises
An insurance enterprise or insurance brokerage
enterprise that wishes to relocate its head office, branches or representative
offices shall send to the Ministry of Finance the following documents:
4.1. An application for approval for relocation
of the enterprise's head office, branch or representative office, made
according to the form prescribed in Appendix 3 to this Circular (not printed
herein);
4.2. The written approval of a competent
authority, as prescribed in the enterprise's charter for relocation of head
offices, branches or representative offices;
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5. Change of contents, scope or duration of
operation
5. 1. An insurance enterprise or insurance brokerage
enterprise that wishes to extend the contents, scope or duration of its
operation must meet the conditions specified in Article 12 of Decree No.
45/2007/ND-CP and the following specific guidance.
5.1.1 The actual charter capital meets
the conditions specified in Decree No. 46/2007/ND-CP and guiding documents in
case of expansion of the domains and scope of operation of the insurance
enterprise;
5.1.2. Having paid fines, if any, not exceeding
VND 15 million for administrative violations in the insurance business domain
over the past three consecutive years up to the time of submission of the
dossier of application for approval for expansion of the domains, scope and
duration of operation;
5.l.3. In case of expansion of the
domains and scope of operation, the insurance enterprise must have at least
three staff members expected to work newly set up section. The head of that
section must satisfy the criteria for managers or executives specified at Point
1.6, Clause 1, Section IV of this Circular;
5.2. A dossier of application for approval for
modification of the domains, scope and duration of operation of an insurance
enterprise or insurance brokerage enterprise complies with Article 12 of Decree
No. 45/2007/ND-CP, and the following specific guidance:
5.2.l. A written application for approval for
expansion (or downscale) of the contents, scope and duration of the
enterprise's operation, made according to the form in Appendix 3 to this
Circular (not printed herein).
5.2.2. A competent authority's written approval,
as prescribed in the enterprise's charter for such expansion or downscale;
5.2.3. Diplomas or certificates evidencing the
capacity and qualifications of the head of the section expected to be set up, in
case of application for approval for expansion of the contents of operation.
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The split, consolidation, merger,
transformation, or transfer of contributed capital portions, of insurance
enterprises or insurance brokerage enterprises prescribed in Article 16 dated
Decree No. 45/2007/ND-CP are specified as follows:
6.l. Split, consolidation, merger or
transformation of enterprises
6.1.1. The split, consolidation, merger or
transformation of insurance enterprises or insurance brokerage enterprises
comply with the Enterprise Law and the 2004 Competition Law.
6.1.2. A dossier of application for approval for
split, consolidation, merger or transformation of an insurance enterprise or
insurance brokerage enterprise comprises;
a/ A written application for approval for split,
consolidation, merger or transformation of the enterprise, made according to
the form in Appendix 4 to this Circular (not printed herein);
b/ A competent authority's written approval, as
prescribed in the enterprise's charter for such split, consolidation, merger or
transformation;
c/ A report on the plan to divide and process
valid contracts with clients, debts, obligations towards the State and commitments
with laborers upon split, consolidation, merger or transformation of the
enterprise;
d/ A list of shareholders and members, the
charter capital and its structure of the organization formed after the split,
consolidation, merger or transformation;
e/ A consolidation or merger contract, in case
of consolidation or merger;
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g/ Lawyers' opinions on the legality of the
contract and dossier of the split, consolidation, merger, consolidation or
merger;
h/ Audited financial statements of the three
years preceding the year of application for approval for consolidation or
merger, of the organization merged or consolidated with the insurance
enterprise or insurance brokerage enterprise; if the duration from the final
date of the annual term of the latest financial statement to the time of
submission of the dossier of application exceeds ninety (90) days, that
organization shall submit additional quarterly statements up to the latest
quarter;
i/ Curricula vitae and lawful personal
certification paper prescribed in Article 18 of the Government's Decree No. 88/2006/ND-CP
dated August 29, 2006, on business registration, of new members (individuals),
or copies of business registration certificates of new members (legal entities)
that own 10% of the charter capital or more;
j/ Diplomas and certificates evidencing the
capacity of the to-be-appointed manager or executive of the insurance
enterprise or insurance brokerage enterprise after split, consolidation or
merger.
6.l.3. Companies newly formed after
split, consolidation, merger or transformation may conduct insurance business
only when they meet the insurance business conditions specified in the
Insurance Business Law and guiding documents.
6.2. Transactions resulting in a change of 10%
or more of the actually contributed charter capital of an insurance enterprise
or insurance brokerage enterprise are subject to prior approval of the Ministry
of Finance.
6.2.1. Transactions resulting in a change of 10%
or more of the actually contributed charter capital of an insurance enterprise
or insurance brokerage enterprise include:
a/ Transaction making an individual or
organization own 10% or more of the actually contributed charter capital of the
insurance enterprise or insurance brokerage enterprise; or,
b/ Transaction making an individual or
organization no longer hold 10% or more of the actually contributed charter
capital of the insurance enterprise or insurance brokerage enterprise; or,
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6.2.2. A dossier of application for approval for
a transaction resulting in a change of 10% or more of the actually contributed
charter capital of an insurance enterprise or insurance brokerage enterprise
comprises:
a/ A written application for approval for
transfer of the contributed capital portion, made according to the form in
Appendix 5 to this Circular (not printed herein);
b/ A competent authority's written approval, as
prescribed in the enterprise's charter for transactions resulting in a change
of 10% or more of the actually contributed charter capital of the enterprise;
c/ Proofs of the Financial capacity of the
transferee:
- For organizations: audited financial
statements of the three years preceding the year of application for approval
for transfer receipt. If the duration from the final date of the annual term of
the latest financial statement to the time of submission of the dossier of
application exceeds ninety (90) days, that organization must submit additional
quarterly statements up to the latest quarter;
- For individuals: the bank's certification of
the deposit balance expected to be used for capital contribution;
d/ In-principle transfer contract (if any);
e/ Curricula vita and lawful personal certification
papers as prescribed in Article 18 of the Government's Decree No. 88/2006/ND-CP
dated August 29, 2006, on business registration, of new capital contributors
(for individuals), or copies of business registration certificates of new
capital contributors (for legal entities);
f/ A list of capital-contributing members
(shareholders) and the charter capital structure after the transfer.
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7.1. Replacement of presidents or general
directors (directors) is subject to approval of the Ministry of Finance.
7.2. A dossier of application for approval for
replacement of the president or general director (director) comprises:
7.2. l. A written application for approval for
replacement of the president or general director (director), made according to
the form in Appendix 3 to this Circular (not printed herein);
7.2.2. A competent authority's written approval,
as prescribed in the enterprise's charter for such replacement;
7.2.3. Judicial records; lawful personal
certification papers prescribed in Article 18 of the Government’s Decree No.
88/2006/ND-CP dated August 29, 2006, on business registration; diplomas and
certificates evidencing the professional capacity and qualifications of the
person in replacement of the president or general director (director);
7.2.4. A written commitment of the
to-be-appointed president or general director (director) of the enterprise once
the Finance Ministry’s approval is obtained.
8. Time limit for settling license modification
supplementation applications
Within 30 days from the date the Ministry of
Finance receives a complete dossier of application for approval for license
modification or supplementation from an insurance enterprise or insurance
brokerage enterprise prescribed for at Points 1 thru 7 above, the Ministry of
Finance shall give a written reply to approve or disapprove the enterprise’s
application. In case of disapproval, it shall give a written explanation. In
case of approval, it shall grant a modified license to the enterprise, made
according to the form in Appendix 6 to this Circular (not printed herein)
or issue a written approval.
IV. ORGANIZATION AND
MANAGEMENT OF INSURANCE ENTERPRISES AND INSURANCE BROKERAGE ENTERPRISES
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1.1. General criteria
l.1.1. Not being banned from managing
enterprises under Clause 2, Article 13 of the enterprise Law;
1.l.2. Being other than those who had been or
are being examined for penal liability, had been sentenced to imprisonment or
had their professional practice right deprived by the court in accordance with
law;
l.1.3. Having never been representatives at law
of bankrupt enterprises, except for bankruptcy due to force majeure causes;
or managers or executives of insurance enterprises or insurance brokerage
enterprises having operation licenses revoked due to
their violations in insurance business
activities;
1.1.4 Having full civil act capacity.
1.2. Criteria for a president
1.2.1. Meeting the general criteria specified at
Point 1.1 above;
1.2.2. Possessing a university or postgraduate
diploma; having directly worked in the domain of insurance or banking for at
least five years or having at least three years' managerial or executive
experience at an enterprise with a charter capital equivalent to that of the
insurance enterprise or insurance brokerage enterprise which he/she is expected
to be in charge of.
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1.3.1. Meeting the general criteria specified at
Point 1.1 above;
1.3.2. Possessing a university or postgraduate
diploma; having at least two years' managerial and executive experience or
having directly worked in the domain of insurance, finance or banking for at
least three years.
1.4. Criteria for a general director (director)
o representative at law
1.4.1. Meeting the general criteria specified at
Point 1.1 above;
1.4.2. Possessing a university or postgraduate
diploma; having directly worked in the domain of insurance, finance or banking
for at least five years and having held for at least three years the position
of a professional section or higher position at the headquarters, of an
insurance enterprise or insurance brokerage enterprise;
1.4.3. Residing in Vietnam during his/her
term of office.
1.5. Criteria for a deputy general director
(deputy director), branch director, head of representative office, chief
accountant or head of the Control Board:
1.5.1. Meeting the general criteria specified at
Point 1.1 above;
1.5.2. Possessing a university or
postgraduate diploma; having knowledge in the professional domain he/she will
be in charge of, or having directly worked for at least three years in the domain
of insurance, finance or banking and the professional domain he/she will be in
charge of;
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1.6. Criteria for the head of the section
for insurance operations exploitation, insurance compensation, reinsurance or
investment:
1.6.1. Possessing a university or
postgraduate diploma;
1.6.2. Having at least three years'
experience of working in the domain he/she is expected to be in charge of;
possessing a diploma or certificate of training in the domain he/she is
expected to be in charge of, which is granted by an accredited domestic or
international insurance training institution.
1.7. Principles for appointing positions in
insurance enterprises and insurance brokerage enterprises:
1.7.l. Members of the board of management or the
members' council of an insurance enterprise or insurance brokerage enterprise
may not concurrently be members of the board of management or members of the
members' council of another insurance enterprise or insurance brokerage enterprise
operating the same domain (reinsurance, non-life insurance, life insurance or
insurance brokerage), except for dependent companies.
1.7.2. The general director (director) or deputy
general directors (deputy directors) of an insurance enterprise or insurance
brokerage enterprise may not concurrently work for another insurance enterprise
or insurance brokerage enterprise operating in the same domain; the general
director (director) of an insurance enterprise or insurance brokerage
enterprise may not be a member of the Board of management or member of the
Members' Council of another insurance enterprise or insurance brokerage
enterprise operating in the same domain, except for dependent companies.
2. Internal supervision and control
Insurance enterprises and insurance brokerage
enterprises shall conduct internal supervision and control in accordance with
Article 15 of Decree No. 45/2007/ND-CP and the following guidance:
2.1. The internal supervision and control
section must be suitable to the enterprise's operation scale, scope and
characteristics; and is subject to direct management by the general director
(director) of the insurance enterprise or insurance brokerage enterprise.
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2.3. The internal control process must ensure
regular and continuous identification, measuring and assessment of all risks
threatening to adversely impact the enterprise's operation efficiency and
objectives in order to detect, prevent and take in time appropriate risk
management measures.
2.4. Requirements on the internal supervision
and control process:
2.4.l. Clear and transparent decentralization
and authorization of duties and powers to all individuals and sections of an
insurance enterprise;
2.4.2. Cross-check between individuals and
sections participating in the same operational process;
2.4.3. Determination of responsibilities of each
individual or section in conducting a transaction;
2.4.4. An insurance enterprise or insurance
brokerage enterprise must ensure that all of its staff members are aware of the
importance of, and actively participate in, internal supervision and control
activities;
2.4.5. Managers of professionals sections and
units and concerned individuals shall regularly consider and assess the
effectiveness and efficiency of the internal supervision and control system;
all errors of this system must be reported promptly to supervisors; errors that
threaten to cause damage or risks must be reported immediately to the general director
(director), the board of management (members' council, company president) or
the control board;
2.4.6. Heads of sections of an insurance
enterprise shall report and assess the results of internal supervision and
control at their sections or according to their assigned tasks; propose measure
to handle problems (if any) and regularly or irregularly send them to their
direct leaders upon request;
2.4.7. The internal supervision and control
process should specify forms of disciplining upon the occurrence of
wrongdoings.
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3. Appoint actuaries
3.1. A life insurance enterprise must employ
appointed actuaries to perform the following duties:
3.1.1. To formulate rules and terms and
calculate insurance premiums of life insurance products;
3.1.2. To make operational reserves for life
insurance policies in accordance with law;
3.1.3. To separate policy holder funds and
distribute annual surpluses of these funds, ensuring fairness, rationality and
lawfulness;
3.1.4. Monthly, to assess the enterprise's
solvency and report it to the Ministry of Finance on the 10 th every
month;
3.1.5. Quarterly and annually, to report in
writing to the board of management, the members' council and the president of
the life insurance enterprise on the enterprise’s actual financial status, and
forecasts about the enterprise’s future financial status;
3.1.6. To promptly report in writing to the
general (director), the board of management, the members’ council or president
on irregular issues that may adversely affect the enterprise’s financial status
and propose handling measures. In serious cases in which the enterprise's
solvency may be affected, to directly report to the Ministry of Finance;
3.1.7. To assess reinsurance programs and
reinsurance policies before submitting them to the board of directors, the
board of management, the members’ council and the president for approval;
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3.2. Criteria for appointed actuaries
3.2.1. Appointed actuaries must meet the
following criteria:
a/ Having been trained and having worked as
actuaries for at least five years in the life insurance domain, and being
fellows of one of internationally accredited associations of actuaries such as
the United Kingdom Association of Actuaries, the Scotch Association;
b/ Having good moral qualities; having never
violated rules of conduct applicable to actuaries; having never been examined
for penal liability for crimes related to their professional operations;
c/ Being staff members of an insurance
enterprise.
An insurance enterprise that cannot yet recruit
actuaries may temporarily hire them; a contract on hiring actuaries must have a
term of at least one (01) year.
3.3. Procedures for approving appointed
actuaries
3.1.1. The board of management (members'
council, company president) of a life insurance enterprise or the general
director (director), in case the enterprise has no board of management(members'
council, company president), shall appoint actuaries to perform the duties
specified at Point 3.1 above. The appointment of actuaries is subject to
written approval of the Ministry of Finance.
3.3.2. A dossier of application for approval of
an actuary comprises:
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b/ Diplomas, certificates and curricula vitae
evidencing the professional capacity, qualifications and experience of the
to-be-appointed actuary;
c/ A notarized copy of the certificate of
membership of an accredited association of actuaries.
3.4. Procedures for approving replacement of an
appointed actuary:
3.4.1. In case of replacement of an actuary, an
insurance enterprise shall submit to the Ministry of Finance a dossier of
application for approval for such replacement, comprising:
a/ A written application to the Ministry of
Finance for relief from duty of an actuary already approved by the Ministry of
Finance for approval of a new actuary. The insurance enterprise's application
must be signed by the chairman or the general director (director), in case the
enterprise has no board of management (members' council, company president);
b/ Diplomas, certificates and curricula vitae
evidencing the professional capacity, qualifications and experience of the
nominated actuary;
c/ A notarized copy of the certificate of
membership of an accredited association of actuaries.
3.4.2. Within 15 days after receiving a complete
and valid dossier specified at above Points, the Ministry of Finance shall give
a written reply on its approval or disapproval. In case of disapproval, it
shall give a written explanation.
3.5. Termination of status of appointed
actuaries:
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a/ His/her membership of an accredited
association of actuaries has terminated;
b/ The insurance enterprise makes a written
request for replacement of the appointed actuary, clearly stating the reason,
which is approved by the Ministry of Finance.
3.5.2. Within 15 days after receiving a complete
and valid dossier specified at the above points, the Ministry of Finance shall
give a written reply on its approval or disapproval. In case of disapproval, it
must give a written explanation.
V. UNDERWRITING INSURANCE
1. Reporting on insurance products
1.1. For insurance products of non-life
insurance operations, insurance enterprises may take the initiative in
developing and implementing insurance rules, terms and premium tariffs while
ensuring:
1.1.1. Compliance with the provisions of Clause
4, Article 20 dated Decree No. 45/2007/ND-CP;
1.1.2. Insurance premiums payable under a
contract already entered into not lower than the reinsurance cession charge of
that very contract.
1.2. Within the first 15 days of every month,
insurance enterprises shall report to the Ministry of Finance on new products
in the preceding month according to the form prescribed in Appendix 7 to this
Circular (not printed herein).
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2.l. Before introducing life insurance products
and health insurance and personal accident insurance products supplementary to
life insurance, insurance enterprises shall submit to the Ministry of Finance
documents of request for approval of these products, including:
2.l.1. Written request for the Ministry of
Finance’s approval of products, containing the insurance enterprise's
commitment to take responsibility for the contents and legality of the
insurance rules and terms;
2.l.2. Insurance rules, term and premium
tariffs of insurance products to be introduced;
2.l.3. Formulas, methods and explanation
about technical bases on which insurance premiums and operational reserves of
insurance products to be introduced are computed;
2.l.4. Relevant documents, including the
form of insurance request, documents introducing products and services of the
insurance enterprise, sale illustration documents, forms of application to be
completed and signed by customers upon buying insurance. These documents
constitute part of the insurance contract;
2.l.5. For life insurance products with shared
profits, in the bases on which premiums of insurance products expected to be
introduced are computed, insurance enterprises shall clearly state the
principles, modes and rates for sharing profits which they commit to pay to
customers.
2.2. Insurance rules, term and premium tariffs
submitted by insurance enterprises to the Ministry of Finance for approval must
ensure compliance with the provisions of Clause 4, Article 20 dated Decree No.
45/2007/ND-CP. The Ministry of Finance encourages insurance enterprises to
reach agreement on insurance rules and terms through the Vietnam Insurers
Association.
2.3. Dossiers of request for approval of life
insurance products must be signed by enterprises' representatives at law and
certified by actuaries.
2.4. Contents of appraisal of insurance products
before approval
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2.4.2. Assessing the economic and technical
feasibility of insurance products on the basis of the certification opinion of
actuaries.
2.5. Within 30 days from the date of receipt of
complete and valid dossiers, the Ministry of Finance shall issue a written
approval or disapproval. In case of disapproval, it shall give a written
explanation.
3. Provision on underwriting of non-life
insurance
3.1. Insurance enterprises shall underwrite
insurance according to the following provision:
3.1.1. Honesty, publicity and transparency,
avoiding causing customer misunderstanding of products and services they
provide;
3.1.2. Their employees and insurance agents have
adequate professional qualifications, moral qualities and have been properly
trained in communication with customers.
3.1.3. Before entering into insurance contracts,
they shall gather necessary information on customers, take into consideration
their own financial capacity and professional capability, the preservation of
their financial resources, solvency and risk management systems. They shall
secure that there will be no discriminatory treatment in terms of insurance
conditions and premiums between the insured subject matters involving the same
risk level.
3.1.4. The buying and selling of insurance
between insurance enterprises and investors that hold 20% or more of the
charter capital of these enterprises must be conducted through bidding under
the provisions of law on bidding or coinsurance with other insurance
enterprises. This provision is not applicable to health insurance and personal
accident insurance and all types of compulsory insurance.
3.2. Prohibited acts
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3.2.2. Managing agencies and investors may not
abuse their influence in any form to ask, prevent or compel their subordinate
units or related persons to participate in insurance at a certain insurance
enterprise;
3.2.3. Insurance enterprises are prohibited from
taking advantage of the prestige, influence and direction of their managing
agencies and capital contributors to provide insurance services, affecting the
legitimate rights and interests of insurance buyers.
4. Provisions on under writing life insurance
4.l. Documents introducing products and services
of insurance enterprises
4.1.1. Documents introducing products and
services of insurance enterprises must be clear, easy- to-understand and
contain no misleading information;
4.1.2. In sale illustrations, insurance
enterprises shall clearly distinguish secured benefits from unsecured ones; and
notify customers that aggregate insurance benefits they may receive under
unsecured insurance contracts may vary;
4. l.3. At least once a year, to
reconsider assumptions used in sale illustrations. If these assumptions are no
longer suitable to reality, insurance enterprises shall revise sale
illustrations as appropriate;
4.1.4. Insurance enterprises shall ensure that
documents introducing their products and services do not contain information on
insurance benefits contrary to the insurance rules and term already approved by
the Ministry of Finance.
4.2. Sale illustration documents
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4.2.2. Assumption used in calculations in sale
illustration documents must be approved by actuaries of insurance enterprises
before these documents are supplied to customers. These documents must be
clear, complete and accurate to help customers make appropriate selection.
4.2.3. Insurance enterprises are responsible for
the accuracy and updatedness of documents introducing their products and
services, sale illustration documents and other sale documents throughout their
use duration;
4.2.4. Insurance enterprises shall present in
sale illustration documents conditions for claiming the reimbursed value and
benefits, and specific sums of money which customers will receive upon receipt
of the reimbursed value, clearly stating whether these
benefits are secured or not.
4.3. Supply of information relating to insurance
contracts
Unless specified in insurance contracts,
insurance enterprises shall, when issuing insurance policies, supply in writing
the following information to customers:
4.3.l. Modes and periods of paying insurance
premiums;
4.3.2. Names of individuals or units attached to
the enterprise for contact when customers need service or have any inquires
about matters related to their contracts;
4.3.3. Customer's responsibility to notify the
enterprise of the change of address of the insurance buyer;
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4.3.5. The entry into insurance contracts
supplementary to principal insurance contracts does not constitute a compulsory
condition maintaining the validity of principal contracts;
4.3.6. Annually, insurance enterprises shall notify
insurance buyers of the status of their contracts.
4.4. Surrender value of life insurance contracts
4.4.1. A life insurance contract has value when
it has become valid a insurance premiums have been paid for 24 full months or
more, for insurance contracts with periodical insurance premium payments or for
a shorter time as agreed upon in insurance contracts;
4.4.2. Insurance enterprises may deduct unpaid
debts before paying the surrender value to insurance buyers.
4.5. Entry into insurance contracts
4.5.l. Enterprises shall analyze customers’
needs so as to advise them to buy appropriate insurance products with
appropriate insurance premiums. Customer need analysis and advice shall be made
in writing.
4.5.2. Insurance enterprises shall give clear
explanations and specific information requests to insurance buyers. Insurance
buyers shall fully supply information relating to subject matters of insurance
to insurance enterprises.
4.5.3. When entering into insurance contracts,
insurance enterprises shall fully supply information relating to insurance
contracts and explain insurance conditions and term to insurance buyers.
Information supplied by insurance enterprises upon entry insurance contracts
constitutes an integral part of insurance contracts.
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Within 30 days from the end of every quarter,
the Ministry of Finance shall publicize lists of insurance products currently
provided by each insurance enterprise on the market. Lists of insurance
products shall be publicized by the Ministry of Finance on the mass, media and
sent to the Vietnam Insurers Association and insurance enterprises lawfully
established and operating in Vietnam.
6. Insurance commissions
6.1. Insurance commission is amounts paid by insurance
enterprises directly to insurance brokerage enterprise and insurance agents
after these organizations and individuals obtain services for insurance
enterprises. Insurance enterprises may take the initiative in spending
insurance commissions on the following contents:
6.6.1. Expenses for initial under writing
(inquiring after, persuading and introducing customers);
6.1.2. Expenses for collection of insurance
premiums;
6.1.3. Expenses for monitoring contracts and
persuading customers to maintain insurance contracts.
6.2. The maximum rates of insurance commissions
which insurance enterprises are allowed to pay to insurance agents for each
insurance contract comply with Appendix 8 (not printed herein) and
Appendix 9 to this Circular. Insurance commissions for insurance contracts with
lump-sum insurance premium payment are equal to the aggregate of the
commissions for each insurable risk in these contracts.
6.3. The rate of insurance brokerage commission
shall be determined on the basis of the agreement between insurance enterprises
and insurance brokerage enterprises in accordance with Vietnamese law and
international practice. Depending on the scope, extent and content of the
provided insurance brokerage service, the payable insurance brokerage commission
is equal to 15% at most of the actually collected amount of insurance premium.
6.4. Insurance enterprises shall base themselves
on current regulations on insurance commissions and their specific conditions
and characteristics to formulate a regulation on payment of insurance premiums
for unified and public application in the enterprises.
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Insurance enterprises may spend 2% at most of
the collected amount of insurance premium in the financial year on loss
prevention and mitigation measures under Clause 2, Article 25 of Decree No.
45/2007/ND-CP.
VI - REINSURANCE
l. Management of reinsurance programs
1.1. Approval of reinsurance programs
1.1.1. In order to ensure safety and efficiency
of reinsurance business activities, the board of management (members' council
or company president) shall approve reinsurance programs which are suitable to
the enterprises' financial capacity and business scope and compliant with
current legal provisions. They shall review, evaluate and adjust reinsurance
programs annually or upon any changes in the market situation. For an insurance
enterprise that has no board of management (members' council or company
president), its board of directors shall approve insurance programs.
1.l.2. A reinsurance program covers the
following principal contents:
a/ Identifying the risk acceptance ability of
the insurance enterprise;
b/ Identifying the retention level suitable to
the accepted insurance risk; limits on the retention level per unit of risk and
the maximum level of protection from the reinsurance assuming enterprise;
c/ Identifying types and modes of reinsurance
most appropriate to the management of accepted risks;
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e/ A list of enterprises expected to assume
reinsurance, with attention paid to the diversification and ranking of these
enterprises;
f/ Modes of using deposits, if any;
g/ Managing cumulated risks with respect to
specific domains, geographical areas and products;
h/ Way of controlling reinsurance programs,
including the reporting and internal control systems.
1.2. Organization of implementation of
reinsurance programs
1.2.1. On the basis of reinsurance
program already approved by the board of management, members' council or
company president, the general director (director) of the insurance enterprise
shall issue internal regulations and guidelines on reinsurance business
activities, specifically:
a/ The insurance under writing process,
specifying types of insurance products to be provided; insurance rules and
terms and aggregate liability for each insurance product;
b/ Identifying the limit of liability to be
automatically insured under fixed reinsurance contracts for each type of
insurance;
c/ Formulating standards for temporary
reinsurance contracts;
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1.2.2. Insurance enterprises shall regularly
update the list of reinsurance assuming enterprises enclosed with information
on the level of risk, possibility and extent of readiness to pay indemnities
corresponding to the reinsured liability; and request deposits corresponding to
the level of risk and credit rating of each reinsurance assuming enterprise.
2. Retention level
2.l. Insurance enterprises shall compute the
retention level for each type of insurance and each kind of risk; the retention
level per risk and insured event;
2.2. When computing the retention level,
insurance enterprises shall take into account the following factors:
2.2.l. Legal provisions on solvency;
2.2.2. Underwriting capacity;
2.2.3. Financial capacity;
2.2.4. The enterprise's readiness to accept
risks;
2.2.5. Arrangement for protection against major
and catastrophe risks;
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2.2.7. Constituents of the list of insurance
contracts;
2.2.8. Developments of the domestic
international reinsurance markets.
2.3. Insurance enterprises may only retain the
maximum level of liability per single risk of loss not exceeding 10% of their
owner capital. The part of liability in excess of 10% shall be ceded by the
means of reinsurance.
2.4. Insurance enterprises may not assume
reinsurance for the very risk they have ceded by means of reinsurance.
3. Cession by means of reinsurance
3.l. Insurance enterprises may transfer
part of the liability it has agreed to insure to one or more insurance
enterprises but may not cede the entire liability it has assumed under an
insurance contract to another insurance enterprise.
3.2. For types of finite insurance, before
entering into reinsurance contracts, insurance enterprises shall send to the
Ministry of Finance written notices, signed by their representatives at law, of
the principal contents of reinsurance contracts, purposes of signing the
contracts, commitment to observe legal provisions on insurance business, and
the accounting regime applied by the insurance enterprises. For finite
insurance contracts entered into before the effective date of this Circular,
insurance enterprises shall send to the Ministry of Finance reports on the above
contents.
3.3. Cession by means of reinsurance to overseas
insurance enterprises must not be conducted under conditions more favorable
than those under which cession by means of reinsurance to domestic enterprises
is conducted.
4. Conditions on foreign reinsurance assuming
enterprises
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4.2. Leading reinsurance assuming enterprises
must be rated at least ''BBB'' by Standard & Poor's, "B++" by
A.M.Best, ''Baa'' by Moody's or get equivalent ratings in the financial year
right before the time of entry into reinsurance contracts.
In case of reinsurance to overseas parent
companies or within the same group without credit rating according to the above
provision, insurance enterprises shall report such in writing to the Ministry
of Finance.
VII - INSURANCE AGENTS
1. Responsibilities of insurance agent training
institutions for insurance agent training
1.1. Insurance agent training institutions that
wish to conduct insurance agent training shall send a written request to the
Ministry of Finance for approval of insurance agent training programs as
prescribed in Clause 2, Article 31 of Decree No. 45/2007/ND-CP, together with
the training and training quality evaluation processes, the process of
examination for awarding insurance agent training certificates and the process
of award and management of insurance agent training certificates.
1.2. The duration of initial training for
insurance agents is 40 hours at least. The duration of regular training is at
least 16 hours/quarter, for non-life insurance agents, and at least 24
hours/quarter, for life insurance agents.
1.3. Award of insurance agent training certificates
1.3.1. Only insurance agent training
institutions which are approved by the Ministry of Finance may award insurance
agent training certificates. To be awarded insurance a certificate, the trainee
must complete the insurance agency training program and pass an exam for
awarding insurance agent training certificates. .
1.3.2. Insurance agent training certificates are
awarded according to the form prescribed in Appendix lo to this Circular (not
printed herein) .
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2. Rights and obligations of insurance
enterprises and insurance agents
2.l. Rights and obligations of insurance
enterprises in the management of the operation of insurance agents, and rights and
obligations of insurance agents are prescribed in Article 29 and Article 30 of
Decree No. 45/2007/ND-CP.
2.2. Insurance enterprises may not enter into
contracts with insurance agents with agency contracts already terminated by
other insurance enterprises for their serious violations of law and agency
contracts within 3 years from the date of termination of agency contracts.
When terminating agency contracts for any of the
above reasons, insurance enterprises shall notify the Vietnam Insurers
Association thereof for further notification to other insurance enterprises.
2.3. In case of change of the contents of an
insurance agent training program and the conditions already registered with the
Ministry of Finance, at least 30 days before starting anew training program,
insurance enterprises shall send to the Ministry of Finance a written report
enclosed with documents explaining these changes.
3. Insurance agents are prohibited from
committing the following acts:
3.1. Providing untrue information and
advertisements on the contents and scope of operation of insurance enterprises,
and insurance conditions and term that harm lawful rights and benefits of
insurance buyers;
3.2. Preventing insurance buyers from providing
information relating to insurance contracts or inciting insurance buyers not to
declare details related to insurance contracts.
3.3. Fighting for customers in the forms of
obstructing, inciting, giving bribes to or intimidating employees or customers
of other insurance enterprises, insurance agents or insurance brokerage
enterprises;
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3.5. Inciting insurance buyers to cancel valid
insurance contracts in order to buy new ones.
4. Supervision of insurance agent training and
employment
4.l. Insurance agent training
institutions shall take responsibility before law for all insurance agent training
activities.
4.2. Insurance enterprises shall take
responsibility before law for all insurance agent recruitment, management,
training and employment activities.
4.3. The Ministry of Finance may conduct regular
or irregular or irregular inspection of insurance recruitment, training,
management and implementation activities of insurance enterprises and insurance
agent training institutions.
The above inspection must not affect the normal
operation process of insurance enterprises insurance agent training
institutions.
5. Business registration of insurance agency
organizations
Insurance agency organizations that are
enterprises shall make business registration in accordance with the Enterprise
Law and its guiding document.
VIII - INSURANCE BROKERAGE
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2. In case an insurance brokerage enterprise is
authorized by an insurance enterprises to collect insurance premiums, the
premium payment responsibility of insurance buyers is fulfilled when insurance
buyers have paid insurance premiums as agreed upon in insurance contracts to
the insurance brokerage enterprise.
In case an insurance brokerage enterprise is
authorized by an insurance enterprises to collect insurance premiums and
insurance buyers have paid insurance premiums as agreed upon in insurance
contracts, the insurance brokerage enterprise shall pay the collected insurance
premiums to the insurance enterprise within the time limit agreed upon between
them. In case of no agreement on this time limit, the insurance brokerage
enterprise shall pay the collected insurance premiums to the insurance
enterprise as soon as possible within 7 days from the date of receipt of
insurance premiums.
3. In case an insurance brokerage enterprise is
authorized by an insurance enterprise to pay insurance sums or insurance
indemnities, the insurance enterprise is still held liable before the insured
or beneficiaries for the insurance sums which the insurance enterprise is
obliged to pay to the or beneficiaries.
4. In case an insurance brokerage enterprise is
authorized by an insurance enterprise to pay insurance sums or insurance
indemnities, the insurance brokerage enterprise shall pay insurance sums to the
insured or beneficiaries immediately after receiving these sums from the
insurance enterprise.
5. Insurance brokerage enterprises may not
commit the following acts:
5.1. Obstructing insurance buyers in supplying
information relating to insurance contracts or inciting insurance buyers not to
declare details related to insurance contracts.
5.2. Conducting sales promotion for customers in
the form of promising illegal benefits to induce them to enter into insurance
contracts;
5.3. Inciting insurance buyers to cancel valid
insurance contracts in order to buy new ones;
5.4. Advising customers to buy insurance at an
insurance enterprise offering conditions and term less competitive than those
offered by another one in order to earn higher brokerage commissions.
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1. Dossiers of application for representative
office establishment permits.
1.1. A foreign insurance enterprise or insurance
brokerage enterprise that wishes to establish a representative office in
Vietnam shall send to the Ministry of Finance a dossier set of application for
a representative office establishment permit according to Article 110 of the
Law on Insurance Business.
1.2. An application for a permit to establish a
representative office in Vietnam must be signed by the president of the Board
of management or a competent person of the foreign insurance enterprise or
insurance brokerage enterprise, and made according to the form prescribed by
the Ministry of Finance in Appendix 13 to this Circular (not printed
herein).
2. Reporting on operation of representative
offices.
2.1. Representative offices of Vietnam-based
foreign insurance enterprises and insurance brokerage enterprises shall send
biannual and annual reports on their operation to the Ministry of Finance and
People's Committees of provinces or centrally run cities where they are
located.
Biannual reports must be sent before July 30
every year while annual reports must be sent before March 1 of the subsequent
year.
2.2. Contents of a report.
2.2.1. Organizational structure of the
representative office, its personnel, number of Vietnamese staff and foreign
staff working at the office;
2.2.2. Principal activities:
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b/ Relations between the representative office
and Vietnamese brokerage enterprises and economic organizations;
c/ Counseling and training work;
d/ Other activities.
2.2.3. Future operation orientations
2.3. When necessary, the Ministry of Finance may
request representative offices to make extraordinary reports in addition to the
above-mentioned reports, supply documents and explain matters related to their
operation.
3. Changes in contents of permits
3.1. In case of change of the following contents
of its permit, the representative office of a foreign insurance enterprise or
insurance brokerage enterprise shall submit a written request to the Ministry
of Finance for modification of the permit:
3.1.1. The name, nationality and address of the
enterprise or the name of its representative office:
3.1.2, The contents of operation of the
representative office.
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3.2. In case of replacement of the chief
representative, increase or reduction of Vietnamese of foreign staff at its
representative office or re-location of the representative office, a foreign
insurance enterprise or insurance brokerage enterprise shall immediately notify
such in writing to the Ministry of Finance.
4. Extension of operation duration of
representative offices.
4.1. At least 30 days before the expiration of
its Vietnam-based representative office establishment permit, a foreign
insurance enterprise or insurance brokerage enterprise that wishes to extent
the operation duration of the representative office shall submit to the
Ministry of Finance a dossier of request therefor, which comprises:
4.1.1. A written request for extension of the operation
duration of the representative office, signed by the president or a competent
person of the enterprise.
4.1.2. The enterprise's establishment and
operation license;
4.1.3. Copies of the Vietnam-based
representative office establishment permit and the previous decision on
extension of the operation duration of the enterprise's representative office
(if any);
4.1.4. A brief report on the representative
office's operation over the last 3 years;
4.1.5. The enterprise's financial statements of
the last 2 years;
4.1.6. The full name and resume of the chief
representative in case of his/her replacement;
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5. Termination of operation of representative
offices.
5.1. A representative office shall terminate
operation in one of the following cases:
5.1.1. At the request of the foreign insurance
enterprise or insurance brokerage enterprise;
5.1.2. Upon termination of operation of the
foreign insurance enterprise or insurance brokerage enterprise;
5.1.3. When it violates the law on insurance
business;
5.1.4. When a competent state agency issues a
decision on withdrawal or revocation of its permit in accordance with
Vietnamese law.
5.2. In case of termination of operation of its
representative office according to Points 5.1.1 and 5.1.2 above, the foreign
insurance enterprise or insurance brokerage enterprise shall send a written
notice to the Ministry of Finance not later than 30 days before the date of
termination of the office and returns to the Ministry the original permit of
the representative office and permits, licenses and decisions related to the
operation process of the representative office.
Within 15 days the Ministry of Finance shall
issue a written approval of termination of operation of the representative
office and notify such to agencies to which copies of the representative
office's permit has been sent.
5.3. In case of termination of operation
according to Pints 5.1.3 and 5.1.4 above, the Ministry of Finance shall send to
the foreign insurance enterprise or insurance brokerage enterprise a decision
on withdrawal or revocation of the representative office establishment permit
at least 30 days before the office must terminate its operation, and send
copies of that decision to agencies to which copies of the representative
office establishment permit has been sent.
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1. Transfer of insurance contracts
1.1. In the course of operation, an insurance
enterprise may transfer all insurance contracts on one or several insurance
operations (bellow referred to as transfer for short) to other insurance
enterprises which are licensed to operate in Vietnam under the provisions of
Section 3, Chapter III of the Law on Insurance Business.
1.2. The transfer must not cause harms to the
interests of insurance buyers after its completion.
2. Transfer procedures
2.1. With regard to transferring insurance
enterprise (below referred to as transferor for short): It shall send to the
Ministry of Finance a written request for transfer, stating the transfer
reasons, enclosed with the following documents:
2.1.1. The transfer plan, which states:
a/ The name and address of the transferred
insurance enterprise (below referred to as transferee);
b/ The type of insurance operation and number of
transferred insurance contracts;
c/ The mode of transfer of funds, operational
reserves and insurance complaints related to transferred contracts;
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e/ The transferee's detailed for the transfer;
f/ The transfer contract between the transferor
and the transferee, including the following principal contents;
- Subject matter of the transfer;
- Time scheduled for the transfer;
- Rights and obligations of parties to the
transfer;
- Modes of settlement of disputes.
2.1.2. The transferee's commitment on ensuring
insurance buyers' interests under transferred insurance contracts after the
transfer takes effect.
2.2. Within 15 days after the written request for
transfer of insurance contracts is approved by the Ministry of Finance, the
transferor shall:
2.2.1. Publish and announcement on the transfer
in 5 consecutive issues of two central newspapers with the following main
contents:
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b/ Type of insurance operation and number of
transferred insurance contracts;
c/ Time scheduled for the transfer;
d/ Address of the venue for settlement of
insurance buyers' complaints and petitions related to the transfer.
2.2.2. Right after the Ministry of Finance
approves the written request for transfer, the transferor shall send a written
notice enclosed with a brief transfer plan to each insurance buyer. The notice
sent to the insurance buyer must state the time limit during which the
insurance buyer may cancel the insurance contract if disagreeing with the
transfer plan and the date the transfer officially takes effect.
2.2.3. An insurance buyer may cancel the
insurance contract within 15 days after receiving the transfer notice, based on
the postage stamp. If the insurance buyer cancels the insurance contract, the
transferor shall refund to him/her/it the insurance premium amount it has
received corresponding to the remaining duration of the insurance contract after
subtracting related reasonable costs, for non-life insurance; or the insurance
premium amount the insurance buyer has paid after subtracting related
reasonable costs, for life insurance.
2.3. After the Ministry of Finance approves the
transfer request, the transferor may not sigh new insurance contracts related
to the transferred insurance operations.
2.4. Within 60 days after the Ministry of
Finance approves the transfer plan, the transferor shall transfer to the
transferee;
2.4.1. All insurance contracts which are still
valid and under the transfer plan already approved by the Finance Ministry;
2.4.2. Unsettled complaints related to
transferred insurance operations;
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3. Approval of dossiers of request for transfer
of insurance contracts.
3.1 Within 30 days after receiving a full
dossier of request for transfer, the Ministry of Finance shall issue a written
approval or disapproval or request for modification or supplementation, within
60 days after receiving the request, the transferor shall complete the dossier
and send it to the Ministry. Past this time limit, the Ministry of Finance may
refuse to approve the transfer request dossier. Incase of disapproval of the
dossier, the Ministry of Finance shall give the reason in writing.
3.2. After approving the transfer request
dossier; the Ministry of Finance shall grant to the transferor a modified
permit, made according to the form in Appendix 6 to this Circular (not
printed herein), which accords with insurance operations the transferor is
still allowed to conduct.
4. Responsibilities of the transferee
4.1. The transferee shall coordinate with the
transferor in working out a transfer plan, determining the value of assets
related to the funds and operational reserves of transferred insurance
contracts and reaching agreement on the effective date of the transfer plan.
4.2. From the date of transfer, the transferee
shall perform transferred obligations under transferred contracts according to
the terms concluded between the transferor and insurance buyers, including
settlement of complaints which have been filed but not yet reported. The
transferee may receive assets related to the funds and operational reserves of
transferred insurance contracts and use those assets to fulfill its obligations
under transferred insurance contracts.
XI. ORGANIZATION OF
IMPLEMENTATION
1. This Circular takes effect 15 days after its
publication in "CONG BAO".
2. This Circular replaces the Finance Ministry's
Circular No. 98/2004/TT-BTC dated October 19, 2004, guiding the implementation
of the Government's Decree No. 42/2001/ND-CP dated August 1, 2001,
detailing the implementation of a number of articles of the Law on Insurance
Business.
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FOR THE
MINISTER OF FINANCE
VICE MINISTER
Tran Xuan Ha