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THE GOVERNMENT
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SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
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No. 46/2023/ND-CP
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Hanoi, July 1,
2023
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DECREE
ON
ELABORATION OF THE LAW ON INSURANCE BUSINESS
Pursuant to the Law on Government Organization
June 19, 2013; the Law on amendments to the Law on Organization of Government
and the Law on Organization of Local Governments dated November 22, 2019;
Pursuant to Law on Social Insurance dated June
16, 2022;
Pursuant to the Law on Enterprises dated June
17, 2020;
Pursuant to the Law on Investment dated June 17,
2020;
At the request of the Minister of Finance;
The Government promulgates a Decree on
elaboration of the Law on Insurance Business.
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GENERAL PROVISIONS
Article 1. Scope
This Decree elaborates Clause 2, Article 6, Clause
2, Article 7, Clause 5, Article 11, Point b, Clause 1, Article 64, Point a,
Clause 2, Article 64, Clause 3, Article 65, Point dd, Clause 1, Article 67, and
Point a Clause 2 Article 67, Clause 6 Article 69, Clause 4 Article 71, Clause 4
Article 74, Clause 2 Article 77, Clause 5 Article 81, Clause 4 Article 83,
Clause 5 Article 87, Clause 1 Article 89, Clause 3 Article 93, Clause 6 Article
94, Clause 4 Article 97, Clause 2 Article 98, Point b Clause 1 and Clause 5
Article 99, Clause 5 Article 100, Clause 3 Article 101, Clause 2 Article 102,
Clause 3 Article 115, Point d Clause 2 Article 125, Point b Clause 1 and Point
a Clause 2 Article 133, Clause 2 Article 134, Clause 4 Article 136, Clause 1
and Clause 3 Article 138, Clause 3 Article 143, Clause 1 Article 152, Clause 3
Article 156, Point b Clause 5, Article 157 of the Law on Insurance Business.
Article 2. Regulated entities
1. Non-life insurers, life insurers, health
insurers (hereinafter referred to as insurers), reinsurers, insurance agents,
insurance brokers, corporate and individual providers of insurance auxiliary
services, mutuals providing microinsurance products.
2. Branches of foreign non-life insurers, foreign
reinsurers’ branches (hereinafter referred to as foreign branches in Vietnam);
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).
3. Policyholders/the assured, the insured,
beneficiaries.
4. State regulatory authorities in charge of
insurance business affairs.
5. Entities and persons involved in insurance
business.
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Types of life insurance include:
1. Whole life insurance.
2. Pure endowment insurance.
3. Term life insurance.
4. Endowment insurance.
5. Annuities.
6. Investment-linked insurance (including universal
life insurance and unit-linked insurance) prescribed in Chapter VII of this
Decree.
7. Retirement insurance specified in Chapter VII of
this Decree.
Article 4. Types of non-life
insurance
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1. Property insurance.
2. Cargo insurance.
3. Aviation insurance.
4. Motor vehicle insurance.
5. Fire insurance.
6. Marine hull and liability insurance.
7. Liability insurance.
8. Trade credit risk insurance.
9. Agriculture insurance.
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11. Other types of damage insurance.
Article 5. Types of health
insurance
Types of health insurance include:
1. Health insurance and personal injury insurance.
2. Medical cost insurance.
Article 6. Rules for creation,
management, utilization, and use of database on insurance business
1. Database on insurance business means database
specialized in insurance management, which is developed and supervised by the
Ministry of Finance.
2. A database on insurance business is a collection
of documents, data, and information about insurance business and related
activities. It is collected, processed, digitized, integrated, and stored on
information technology systems to meet the requirements of policy making,
statistics, forecasting, management, and supervision of insurance business
activities. The database also creates an environment for the application of
basic data analysis models to serve insurance business management and
supervision.
3. The creation, management, utilization, and use
of database on insurance business must follow the principles below:
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The database on insurance business must be
maintained in a continuous, stable, and smooth operation. It must show the
history of information updates and revisions, and the information must be
stored securely and confidentially;
The creation, management, utilization, and use of
the database on insurance business must comply with the provisions of the Law
on Insurance Business, the Law on Information Technology, the Law on Electronic
Transactions; regulations on management, connection and sharing of digital data
by state regulatory agencies; regulations on ensuring protection of private
life, personal secrets, family secrets, protection of business confidentiality
and other relevant laws.
Article 7. Information in the
database on insurance business
The database on insurance business includes the
following:
1. Category regarding insurers, reinsurers, foreign
branches in Vietnam, insurance brokers, mutuals providing microinsurance
products, representative offices in Vietnam:
a) Details about Establishment and Operation
Licenses, representative office licenses;
b) Details about financial positions and
professional operations in reports:
financial statements, operational reports, reports
on separate management of equity and premiums, reports on assessment of
solvency and risk management, other reports of insurers, reinsurers, foreign
branches in Vietnam as per Article 106 of the Law on Insurance Business;
Financial statements, regular operational reports,
ad-hoc reports, disclosure of information or data by insurance brokers as per
clause 5 Article 138 of the Law on Insurance Business;
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c) Details about: Managers and controllers of
insurers, reinsurers and foreign branches in Vietnam; members of the Board of
Directors, members of the Board of Members, the Directors, General Directors,
legal representatives, Vice Directors or Deputy General Directors, Chief
Accountants, heads of operation department of insurance brokers (hereinafter
referred to as managers of insurance broker); Presidents of the Board of
Directors, General Directors or Directors, Appointed Actuaries of mutual
providing microinsurance products. Details about:
Date of appointment, date of termination of employment (if any);
degrees, certificates, working experience in the fields of insurance, finance,
banking, or other fields corresponding to each post specified in Article 80,
Clause 1, Article 138 and Clause 3, Article 149 of the Law on Insurance
Business.
2. Category regarding policyholders, insured
people, subjects insured under insurance policies which are made and effective
in a reporting period, including:
a) With respect to life insurance: The number of
insured people (classified by the type of risk covered, age, insurance period,
year of insurance policy when the risk occurs, gender, health-related lifestyle
choices), the survival probability of the insured person by year, and other
factors that may be used to assess insurance risk;
b) With respect to health insurance: The number of
insurance policies, the number of insured people, the number of health
insurance claims, total payout amount (classified by ages, insurance benefits)
and other factors that may be used to assess insurance risk;
c) With respect to non-life insurance: The number
of insurance policies, sum insured, the number of health insurance claims,
total payout amount (classified by subject insured; category and intended use)
and other factors that may be used to assess insurance risk.
3. Category regarding insurance agents: Reports on
training and engagement of insurance agents by insurers, branches of foreign
non-life insurers, and mutuals providing microinsurance products as prescribed
at Point k, Clause 2, Article 128 of the Law on Insurance Business.
4. Category regarding exam, insurance of insurance
certificates, insurance auxiliary certificates, insurance brokerage
certificates, including: Identity of the certificate holder; certificate type;
the name of the training institution; exam code; decision on approval for exam
results.
5. Category regarding supervision and penalties for
administrative violations against insurance business regulations: Name of
penalized entity, penalty decision number and date, violation, penalty type and
degree, remedial measure (if any).
6. The Minister of Finance shall elaborate forms
related to the information in point c Clause 1 and Clause 2 of this Article.
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1. Responsibility to provide and update
information:
a) Information specified at Points b and c, Clause
1, Article 7 of this Decree shall be provided by insurers, reinsurers, foreign
branches in Vietnam, insurance brokers, mutuals providing microinsurance
products;
b) Information specified at Clauses 2 and 3,
Article 7 of this Decree shall be provided by insurers, branches of foreign
non-life insurers, mutuals providing microinsurance products;
c) Information specified at Point a, Clause 1,
Clause 4, Clause 5, Article 7 of this Decree shall be updated by the Ministry
of Finance (the Department of Insurance Management and Supervision);
d) The organizations specified in Clause 2, Article
11 of the Law on Insurance Business shall connect and provide complete and
accurate information to the database on insurance business. If incomplete or
inaccurate information is found, the information provider must review, correct,
update, and report it to the Ministry of Finance.
2. Forms of providing and updating information:
The provision and updating of information for the
database on insurance business can be done through the database's web portal or
in the form of electronic data files.
3. Time limit for providing and updating
information:
a) Information specified at Points a and c, Clause
1, Article 7 of this Decree shall be provided and updated within 10 days of
generation;
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c) Information specified in Clause 2, Article 7 of
this Decree shall be provided annually, within 90 days from the end of the
fiscal year;
d) Information specified in Clause 4, Article 7 of
this Decree shall be provided and updated on a monthly basis, within 15 days
from the end of the month;
dd) Information specified in Clause 5, Article 7 of
this Decree shall be updated immediately after the date on which the
administrative penalty is imposed.
4. Information specified in Clauses 1, 3, 4 and 5,
Article 7 of this Decree which is provided and updated in the database on
insurance business is information generated from January 1, 2024. Information
specified in Clause 2, Article 7 of this Decree which is provided and updated
in the database on insurance business is information generated from January 1,
2025.
Article 9. Use of information
from the database on insurance business
1. The use of information from the database on
insurance business must satisfy the following requirements:
a) The Ministry of Finance uses the database on
insurance business to support the state's supervision of the insurance
business;
b) State regulatory agencies, according to their
functions and tasks, use information to support their public administration;
2. Agencies, organizations and individuals utilize
and use information from the database on insurance business through the web
portal of the Ministry of Finance.
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The connection of the insurance business database
with national databases and other specialized databases is made in accordance
with Decree No. 47/2020/ND-CP dated April 9 2020 of the Government on the
management, connection and sharing of digital data in state regulatory agencies
and special law.
Chapter II
INSURERS, REINSURERS,
FOREIGN BRANCHES IN VIETNAM
Section 1. ISSUANCE OF ESTABLISHMENT AND OPERATION LICENSES
1. A capital contributor which contributes at least
10% of charter capital to establish an insurer or reinsurer must meet the
requirements as prescribed in Articles 64, 65, 66 of the Law on Insurance
Business and the following financial conditions:
a) Capital contributors engaging in businesses that
require legal capital, minimum charter capital, or minimum capital must ensure
that the difference between owner's equity and the required capital is greater
than or equal to their planned contribution;
b) If capital contributors are established and
operate under the Law on Credit Institutions, the Law on Insurance Business,
and/or the Law on Securities, they must maintain their financial safety
conditions and obtain permission from competent authorities to contribute
capital in accordance with law. In cases where relevant laws do not require
written approval from a competent authority, the capital contributor must have
a written certification of this;
Foreign insurers, foreign reinsurers, and foreign
financial and insurance corporations that are capital contributors must
maintain their financial safety conditions and be approved by the competent
authority of the country where they are headquartered (hereinafter referred to
as home country) in order to establish insurers and reinsurers in Vietnam. If
the home country's regulations do not require a written approval, a written
certification from a competent authority, organization, or individual is
required in accordance with the law of that home country.
d) The financial statements for the three
consecutive years preceding the year of application must receive an unqualified
opinion.
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a) Conditions specified at Points a and d, Clause 1
of this Article;
b) They are certified by the competent authority of
their home country that they maintain the financial safety conditions and have
not seriously violated the regulations of the law on insurance business within
the last 3 consecutive years preceding the year of application.
Article 12. Application for
issuance of Establishment and Operation License to insurance limited liability
company or reinsurance limited liability company
1. An application form for a License, provided in
Appendix I to this Decree.
2. Draft of the company's charter as prescribed in
the Law on Enterprises.
3. Operation plan for the first 5 years suitable to
the business line for which the License is requested. The plan must clearly
state the types of insurance to be provided, target market, distribution
channel, and method of setting aside the technical reserves, reinsurance
program, capital investment, business efficiency, solvency, internal control,
internal audit, risk management, information technology of the insurer or
reinsurer.
4. Copies of 9-digit or 12-digit ID cards or
passports; police (clearance) certificates or equivalent of foreigners as
prescribed by foreign law; curricula vitae, copies of degrees, certificates and
other documents proving the eligibility of the person expected to be appointed
as President of the Members' Council, Director or General Director, Legal
Representative, Appointed Actuary of the insurer or reinsurer.
5. List of capital contributors and the following
attached documents:
a) A copy of the establishment decision or business
registration certificate or other equivalent document;
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c) A decision issued by the competent authority of
the capital contributor on capital contribution to establish the insurer or
reinsurer;
d) A written authorization, a copy of 9-digit or
12-digit ID card or passport of the capital contributor’s authorized
representative;
dd) The audited financial statements for the three
consecutive years preceding the year of application. In case a foreign insurer,
foreign reinsurer, or foreign financial and insurance corporation authorizes a
subsidiary to contribute capital to establish an insurer or reinsurer in
Vietnam, it must also submit copies of the subsidiary’s audited financial statements
for the three consecutive years preceding the year of application.
Audited financial statements of foreign insurers,
foreign reinsurers, foreign financial and insurance corporations, and their
subsidiaries must comply with Point d, Clause 1, Article 11 of this Decree;
e) An authorization letter, if the foreign insurer,
foreign reinsurer, or foreign financial and insurance corporation authorizes
their subsidiary to perform offshore investment and commit to jointly take
responsibility, together with the subsidiary, for capital contribution and
obligations of the subsidiary in the establishment of insurers and reinsurers
in Vietnam;
g) The written commitment of the foreign insurer,
foreign reinsurer, or foreign financial and insurance corporation to provide
financial support, technology, corporate governance, risk and operation
management for insurers, reinsurers to be established in Vietnam. They shall
ensure that newly-established insurers and reinsurers comply with regulations
on financial safety and risk management in accordance with the Law on Insurance
Business;
h) Documents proving that the foreign insurer,
foreign reinsurer, or foreign financial and insurance corporation has
contributed capital in accordance with Point c, Clause 1, Article 65 of the Law
on Insurance Business.
6. A list of beneficial owners, including their
full name, date of birth, 9-digit or 12-digit ID card number or passport
number, nationality (specify all nationalities they have and their
corresponding permanent addresses in those countries), residential address in
Vietnam (if any), direct and indirect ownership rates in the insurer or
reinsurer to be established.
7. Certification of an authorized bank in Vietnam
that the charter capital deposited in a blocked account opened at the bank is
not lower than the minimum charter capital specified in Article 35 of this
Decree. The certification must clearly state the capital contribution amount of
each member, blocked amount, blockade purpose, blockade duration and conditions
for lifting blockade.
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a) Agreement to contribute capital to establish an
insurance limited liability company or a reinsurance limited liability company,
together with a list of capital contributors;
b) Approval for the draft of the company's charter.
9. A certificate of the competent authority of the
home country of the foreign insurer, foreign reinsurer, or foreign financial
and insurance corporation that:
a) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation is permitted to establish insurers
and reinsurers in Vietnam. If the home country's regulations do not require a
written approval, a written certification from a competent authority,
organization, or individual is required in accordance with the law of the
country;
b) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation has operated in the line of
business they intend to conduct operations in Vietnam;
c) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation has financial soundness and has
fully met the management requirements in their home country;
c) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation has not seriously violated their
home country’s regulations on insurance business for 3 consecutive years
preceding the year of application.
10. A certification issued by a competent authority
that Vietnamese capital contributors meet financial safety conditions and are
allowed to contribute capital to establish an insurer or reinsurer in
accordance with law. If relevant law does not require a written approval, the capital
contributor must have a written certification of this.
11. The written commitment of the capital
contributors that they meet the eligibility requirements for issuance of the
License as prescribed in Article 11 of this Decree and Article 65 of the Law on
Insurance Business.
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13. A document authorizing an individual or
organization to act on behalf of capital contributors to carry out the
procedures for applying for a License.
Article 13. Application for
issuance of Establishment and Operation License to insurance joint-stock
company, reinsurance joint-stock company
1. An application form for a License, provided in
Appendix I to this Decree.
2. Draft of the company's charter as prescribed in
the Law on Enterprises.
3. Operation plan for the first 5 years suitable to
the business line for which the License is requested. The plan must clearly
state the types of insurance to be provided, target market, distribution
channel, and method of setting aside the technical reserves, reinsurance
program, capital investment, business efficiency, solvency, internal control,
internal audit, risk management, information technology of the insurers or
reinsurer.
4. Copies of 9-digit or 12-digit ID cards or
passports; police (clearance) certificates or equivalent of foreigners as
prescribed by foreign law; curricula vitae, copies of degrees, certificates and
other documents proving the eligibility of the person expected to be appointed
as President of the Board of Directors, Director or General Director, Legal
Representative, Appointed Actuary of the insurer or reinsurer.
5. Profile of an individual founding shareholder:
a) A copy of 9-digit or 12-digit ID card or
passport; police (clearance) certificate according to the form or equivalent
document of foreigners as prescribed by foreign law;
b) A bank's confirmation of the balance of
Vietnamese dong or freely convertible foreign currency deposited at the bank.
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a) A copy of the establishment decision or business
registration certificate or other equivalent document;
b) A copy of the company's charter;
c) A decision issued by the competent authority of
the capital contributor on capital contribution to establish the insurer or
reinsurer;
d) A written authorization, a copy of 9-digit or
12-digit ID card or passport of the authorized representative of the capital
contributor;
dd) A copy of the audited financial statement for
the three consecutive fiscal years preceding the year of application. In case
an insurer, reinsurer, or foreign financial and insurance corporation
authorizes a subsidiary to contribute capital to establish an insurer or
reinsurer in Vietnam, it must also submit copies of the subsidiary’s financial
statements for the three consecutive years preceding the year of application.
Audited financial statements of foreign insurers,
foreign reinsurers, foreign financial and insurance corporations, and their
subsidiaries must comply with Point d, Clause 1, Article 11 of this Decree;
e) An authorization letter, if a foreign insurer,
foreign reinsurer, or foreign financial and insurance corporation authorizes
their subsidiary to perform offshore investment and commit to jointly take
responsibility, together with the subsidiary, for capital contribution and
obligations of the subsidiary in the establishment of insurers and reinsurers
in Vietnam;
g) The written commitment of the foreign insurer,
foreign reinsurer, or foreign financial and insurance corporation to provide
financial support, technology, corporate governance, risk and operation
management for insurers, reinsurers to be established in Vietnam. They shall
ensure that newly-established insurers and reinsurers comply with regulations
on financial safety and risk management in accordance with the Law on Insurance
Business;
h) A document proving that this capital contributor
complies with Point b, Clause 1, Article 66 of the Law on Insurance Business.
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a) Documents specified at Points a, b, c, d, Clause
6 of this Article;
b) A copy of the audited financial statement for
fiscal year preceding the year of application.
8. A list of beneficial owners, including their
full name, date of birth, 9-digit or 12-digit ID card number or passport
number, nationality (specify all nationalities they have and their
corresponding permanent addresses in those countries), residential address in
Vietnam (if any), direct and indirect ownership rates in the insurer or
reinsurer to be established.
9. Certification of an authorized bank in Vietnam
that the charter capital deposited in a blocked account opened at the bank is
not lower than the minimum charter capital specified in Article 35 of this
Decree. The certification must clearly state the capital contribution amount of
each shareholder, blocked amount, blockade purpose, blockade duration and
conditions for lifting blockade.
10. Meeting minutes of shareholders on:
a) Agreement to contribute capital to establish a
joint-stock insurance company, joint-stock reinsurance company, together with a
list of shareholders and founding shareholders;
b) Approval for the draft of the company's charter.
11. An authorization of an individual or
organization to act on behalf of shareholders to apply for the License.
12. A certification issued by a competent authority
that Vietnamese capital contributors meet financial safety conditions and are
allowed to contribute capital to establish an insurer or reinsurer in
accordance with law. If relevant law does not require a written approval, the
capital contributor must have a written certification of this.
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a) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation is permitted to establish insurers
and reinsurers in Vietnam. If the home country's regulations do not require a
written approval, a written certification from a competent authority,
organization, or individual is required in accordance with the law of that home
country;
b) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation has operated in the line of
business they intend to conduct operations in Vietnam;
c) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation has financial soundness and has
fully met the management requirements in their home country;
d) The foreign insurer, foreign reinsurer, or
foreign financial and insurance corporation has not seriously violated their
home country’s regulations on insurance business for 3 consecutive years
preceding the year of application.
14. The written commitment of the shareholders that
they meet the eligibility requirements for issuance of the License as
prescribed in Clause 1 Article 11 of this Decree and Article 66 of the Law on
Insurance Business.
15. A document proving that the capital
contributors ensure that the difference between owner's equity and the required
capital is greater than or equal to their planned contribution as prescribed in
Point a, Clause 1, Article 11 of this Decree.
Article 14. Application for
issuance of Establishment and Operation License to foreign branch in Vietnam
1. An application form for a License, as specified
in Appendix I to this Decree.
2. The draft Regulation on organization and
operation of foreign branch in Vietnam which has been approved by the foreign
non-life insurer or foreign reinsurer.
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4. Copies of 9-digit or 12-digit ID cards or
passports; police (clearance) certificates or equivalent of foreigners as
prescribed by foreign law; curricula vitae, copies of degrees, certificates and
other documents proving the eligibility of the person expected to be appointed
as Director, Legal Representative, Appointed Actuary of the foreign branch in
Vietnam.
5. Documents on the non-life insurer or foreign
reinsurer:
a) A copy of the establishment decision or business
registration certificate or other equivalent documentation;
b) A copy of the company's charter;
c) A decision issued by the competent authority of
the foreign non-life insurer or foreign reinsurer on the establishment of a
branch in Vietnam;
d) A written authorization, a copy of 9-digit or
12-digit ID card or passport of the authorized representative of the foreign non-life
insurer or foreign reinsurer;
dd) A copy of the audited financial statement for
the three consecutive fiscal years preceding the year of application;
e) A written commitment of the foreign non-life
insurer or foreign reinsurer to be responsible for all obligations incurred by
the branch in Vietnam;
g) Documents proving that the foreign non-life
insurer or foreign reinsurer has contributed capital in accordance with Point
b, Clause 1, Article 66 of the Law on Insurance Business.
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7. A certification issued by the competent
authority of the home country of the foreign non-life insurer, or foreign
reinsurer that:
a) The foreign non-life insurer or foreign
reinsurer is permitted to establish a branch in Vietnam and has operated in the
line of business they intend to conduct operations in Vietnam;
b) The foreign non-life insurer or foreign
reinsurer has financial soundness and has fully met the management requirements
in their home country;
c) The foreign non-life insurer or foreign
reinsurer has not seriously violated their home country’s regulations on
insurance business for 3 consecutive years preceding the year of application.
8. The written commitment of the foreign non-life
insurer or foreign reinsurer that they meet the eligibility requirements as
prescribed in Clause 2 Article 11 of this Decree and Clause 1, 2 Article 67 of
the Law on Insurance Business.
9. A document proving that the capital contributors
ensure that the difference between owner's equity and the required capital is
greater than or equal to their planned contribution as prescribed in Point a,
Clause 2, Article 11 of this Decree.
Article 15. General criteria
for submission and supplementation of applications and documents
1. The application for the Establishment and
Operation License to be submitted to the Ministry of Finance must be made in 2
sets, including one original set and one copy set.
2. Applications submitted to the Ministry of
Finance must satisfy the following:
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b) Copies in the application must be made from the
master register or be authenticated;
c) If applicant for Establishment and Operation
Licenses is a foreign organization or individual, each set shall include one
copy in Vietnamese and one copy in English, except for Vietnamese documents (or
copies from the original Vietnamese language) that are originally made in
Vietnam;
d) Documents made in a foreign language must be
accompanied by a certified translation into Vietnamese by a competent
authority. Translations of financial statements must be certified by authorized
translation organizations or individuals in accordance with the law.
dd) Police (clearance) certificate, made according
to the form or equivalent document of a foreigner prescribed by foreign law
must be issued by a competent authority no later than 12 months before the date
of application. The certificate must have full information on criminal
convictions and prohibition from holding certain positions, establishing, or
managing enterprises or cooperatives;
e) The curriculum vitae must be made no later than
6 months before the date of application;
g) The bank's certifications on the balance of
Vietnamese dong or a freely convertible foreign currency deposited at an
authorized bank in Vietnam specified in this Decree must be made within 6
months before the date of application;
h) There must be an enclosure list in each
application set.
4. If documents on Vietnamese citizens’ identity
required in the application have been integrated in the National Population
Database and the Identity Database, the Ministry of Finance shall collect them
from these databases through exchange with state regulatory agencies.
Article 16. Procedures for
applying for Establishment and Operation License
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2. Within 30 days of receiving an incomplete or
invalid application, the Ministry of Finance shall notify the applicant in
writing to supplement or revise the application. The time limit for supplementation
or revision of the investor’s application is 6 months from the date of
notification. In case the investor fails to supplement or revise the
application within the prescribed time limit, the Ministry of Finance will deny
the application.
The time limit for the applicant to supplement or
revise their application is 12 months from the date of the first notication by
the Ministry of Finance. If the applicant fails to complete the application
within the specified time limit, the Ministry of Finance has the discretion to
deny the application.
3. Within 60 days of receiving a complete or valid
application, the Ministry of Finance shall grant an Establishment and Operation
License to the insurer, reinsurer, or foreign branch in Vietnam according to
the Appendix II hereto appended. If the application is rejected, the Ministry
of Finance shall provide an explanation in writing. The Ministry of Finance may
only deny the application if the capital contributor or the insurer, reinsurer,
or foreign branch to be established in Vietnam does not fully satisfy the
requirements and/or application as prescribed in this Decree, or the documents
therein are forged or falsified as specified in Clause 3, Article 15 of this
Decree.
Article 17. Revocation of the
Establishment and Operation License
1. For the cases specified at Points a, d and e,
Clause 1, Article 75 of the Law on Insurance Business, procedures for revoking
the Establishment and Operation License of the insurer or branch of foreign
non-life insurer are as follows:
a) Within 20 days of signing the record of
violations (for the cases specified in Points a and d, Clause 1, Article 75 of
the Law on Insurance Business) or receiving a notice that the foreign non-life
insurer has gone bankrupt, which leads to the revocation of its license, the
Ministry of Finance shall send a written request to the insurer or branch of
the foreign non-life insurer to take the following actions: Immediately cease
the conclusion of any new insurance and reinsurance policies, and do not sign any
new or renewed policies related to the insurance business; transfer the
portfolios of insurance policies.
b) Within 6 months of receiving the official
dispatch from the Ministry of Finance, the insurer, branch of foreign non-life
insurer must complete the transfer of the portfolios of insurance policies as
prescribed in Clause 2, Article 75 of the Law on Insurance Business and Article
34 of this Decree;
c) Within 20 days of receiving a complete report
from the insurer or branch of the foreign non-life insurer on the completion of
the insurance policy transfer, the Ministry of Finance shall issue a License
revocation decision to the insurer or branch of foreign non-life insurer;
d) The insurer shall carry out procedures for
dissolution, the branch of foreign non-life insurer shall carry out procedures
for ceased operation as prescribed in Article 115 of the Law on Insurance
Business.
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a) Within 20 days of signing the record of
violations (for the cases specified in Points a and d, Clause 1, Article 75 of
the Law on Insurance Business) or receiving a notice that the foreign reinsurer
has gone bankrupt, which leads to the revocation of its license, the Ministry
of Finance shall issue a License revocation decision to the reinsurer or branch
of the foreign reinsurer:
b) After receiving the License revocation decision,
the reinsurer or branch of the foreign reinsurer must immediately cease the
conclusion of any new reinsurance policies, or signing of any new or renewed
policies. The reinsurer shall carry out procedures for dissolution, the branch
of foreign reinsurer shall carry out procedures for ceased operation as
prescribed in Article 115 of the Law on Insurance Business.
3. For the cases specified at Point b, Clause 1,
Article 75 of the Law on Insurance Business, procedures for revoking the
Establishment and Operation License of the insurer, reinsurer or foreign branch
are as follows:
a) Within 20 days from the expiration of the time
limit specified at Point b, Clause 1, Article 75 of the Law on Insurance
Business, the Ministry of Finance shall issue a License revocation decision to
the insurer, reinsurer, foreign branch;
b) The insurer, reinsurer, foreign branch shall
carry out procedures for dissolution and ceased operation as prescribed
in Article 115 of the Law on Insurance Business.
4. In case of full division, partial division,
acquisition, or consolidation as prescribed in point c, Clause 1, Article 75 of
the Law on Insurance Business, the Ministry of Finance shall issue a License
revocation decision to the insurers or reinsurers that engage in the full
division, partial division, acquisition, or consolidation, and issue new
License to newly established insurers, or reinsurers.
5. In case of voluntary dissolution or ceased
operation specified at Point c, Clause 1, Article 75 of the Law on Insurance
Business, within 14 days of receiving the full report from the insurer,
reinsurer, or foreign branch in Vietnam on completion of policy transfer and
procedures for dissolution and ceased operation as prescribed in Article 115 of
the Law on Insurance Business, the Ministry of Finance shall issue a License
revocation decision to the insurer, reinsurer, or foreign branch in Vietnam.
6. For the case specified at Point dd, Clause 1,
Article 75 of the Law on Insurance Business, within 20 days from the date on
which the Court’s declaration of bankruptcy comes into force, the Ministry of
Finance shall issue a License revocation decision to the insurer or reinsurer.
Section 2. REVISIONS TO THE LICENSES OF INSURERS, REINSURERS, OR
FOREIGN BRANCHES IN VIETNAM
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1. Application for change of name, head office of
an insurer, reinsurer, or foreign branch in Vietnam includes:
a) An application form for change of name or head
office, provided in Appendix III to this Decree;
b) A competent authority's document as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam) on the change of
name, head office;
c) Documentation showing the right to use the head
office (for the change of head office).
2. Within 7 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval. If
the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
Article 19. Increase in
charter capital of insurers, reinsurers, foreign branches in Vietnam
1. If an insurer, reinsurer, or foreign branch in
Vietnam seeks to increase their charter capital, they must meet the following
requirements:
a) The increase in charter capital or allocated
capital shall be made in Vietnamese Dong;
b) Shareholders, capital contributors, and parent
companies of insurers, reinsurers, and foreign branches in Vietnam are not
permitted to supplement their charter capital or allocated capital through loan
capital or investment trust capital from other organizations or individuals.
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With respect to joint-stock companies established
before January 1, 2023, they must satisfy the mentioned requirements pertaining
to shareholder structure from January 1, 2026.
d) If the insurer or reinsurer increases its
charter capital through capital contributions from new shareholders or capital
contributors, these new shareholders and capital contributors must satisfy the
conditions prescribed in Clauses 1 and 2, Article 64 and Article 65 of the Law
on Insurance Business.
2. Application for Ministry of Finance's approval
of principle to increase charter capital (for insurers, reinsurers) or increase
allocated capital (for foreign branches in Vietnam) includes the following:
a) An application form for change of charter
capital or allocated capital, provided in Appendix III to this Decree;
b) A competent authority's document as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam) on the increase of
charter capital (or allocated capital). This document must specify the
increased amount, method, and time for capital increase;
c) Plan for mobilization and use of charter capital
or allocated capital;
d) List of capital contributors of the insurer or
reinsurer (for limited liability company) or shareholders (for joint-stock
company) expected to own at least 10% of the charter capital of the insurer or
reinsurer after increasing capital; documentation proving that the new
shareholders and capital contributors satisfy the requirements specified in
Articles 64 and 65 of the Law on Insurance Business. This provision does not
apply to the case of increasing charter capital by the method of securities
public offering, securities offering of listed and public joint-stock
companies.
3. Within 20 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. In case of increase of charter capital by method
of public offering of shares, offering of shares of listed and public
joint-stock companies, after being approved by the Ministry of Finance, the
insurer or reinsurer shall issue shares in accordance with the Law on
Securities.
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a) A summary report on the results of the increase
in charter capital (or allocated capital) under the capital change plan
approved by the Ministry of Finance;
b) The bank's certification that either the
shareholders (or capital contributors) have fully paid the additional capital
to the insurer, reinsurer, or the foreign non-life insurer, foreign reinsurer
has provided sufficient additional capital for the foreign branch in Vietnam
(in case of capital increase) into a blocked account; or the Vietnam Securities
Depository and Clearing Corporation’s certification of additional registration
of securities if the charter capital is increased through the issuance of bonus
shares from the share capital surplus;
c) Documents specified in point d clause 2 of this
Article in case of increasing charter capital by the method of securities
public offering, securities offering of listed and public joint-stock
companies.
6. Within 20 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised License to the
insurer, reinsurer, or foreign branch in Vietnam according to the Appendix V
hereto appended. If the application is rejected, the Ministry of Finance shall
provide an explanation in writing.
7. Within 6 months from the date on which the
Ministry of Finance approves the application for an increase in charter capital
or allocated capital, if the insurer, reinsurer, or foreign branch in Vietnam
fails to perform such a plan, they must report it to the Ministry of Finance
for further actions. This provision does not apply to the case where the
charter capital is increased to meet the requirement pertaining to owner’s
equity management as prescribed in clause 3, Article 37 of this Decree.
Article 20. Decrease in
charter capital and allocated capital
1. If an insurer, reinsurer, or foreign branch in
Vietnam seeks to decrease their charter capital or allocated capital, they must
meet the following requirements:
a) The insurer, reinsurer, or foreign branch in
Vietnam must fully satisfy the financial requirements as prescribed in this
Decree;
b) After the charter capital or allocated capital
is decreased, the insurer, reinsurer, or foreign branch in Vietnam still has to
follow relevant regulations on capital and solvency margin as prescribed by law
and requirements pertaining to shareholder structure are specified in Article
66 of the Law on Insurance Business for joint-stock companies.
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a) An application form for change of charter
capital or allocated capital, provided in Appendix III to this Decree;
b) A competent authority's document as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam) on the decrease of
charter capital (or allocated capital). This document must specify the
decreased amount, method, and time for capital decrease;
c) A plan for decrease in charter capital or
allocated capital, which proves that the insurer, reinsurer, or foreign branch
in Vietnam fully meets the requirements as prescribed in Clause 1 of this
Article.
3. Within 20 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. Within 6 months from the date on which the
Ministry of Finance approves the application for a decrease in charter capital
or allocated capital, the insurer, reinsurer, or foreign branch in Vietnam
shall complete the process of decreasing capital and submit one set of
application to the Ministry of Finance, including:
a) A summary report on the results of the decrease
in charter capital (or allocated capital) according to the plan approved by the
Ministry of Finance, clearly stating the results of financial indicators after
completing the process of decreasing the capital;
b) Documentation showing that either the insurer or
reinsurer has completed the payment to the shareholders (or capital
contributors), or the foreign branch in Vietnam has returned the foreign
non-life insurer or foreign reinsurer the decreased capital (in case of capital
decrease).
5. Within 20 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised License to the
insurer, reinsurer, or foreign branch in Vietnam according to the Appendix V
hereto appended. If the application is rejected, the Ministry of Finance shall
provide an explanation in writing.
6. Within 6 months from the date on which the
Ministry of Finance approves the application for a decrease in charter capital
or allocated capital, if the insurer, reinsurer, or foreign branch in Vietnam
fails to perform such a plan, they must report it to the Ministry of Finance
for further actions.
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Article 21. Change of
operational activities, scope, and duration of operation
1. Insurers, reinsurers, and foreign branches in
Vietnam that seek to expand the operational activities, scope, and duration of
operation specified in the License must satisfy the following requirements:
a) Satisfy the applicable solvency requirements;
b) Do not incur administrative penalties against
regulations on insurance business within 12 months up to the time of submitting
the application for expansion of operational activities and scope of operation;
c) In case of expanding the operational activities
to include more types of investment-linked insurance and retirement insurance,
apart from the requirements specified at Points a and b of this Clause, the
life insurer shall must also meet the following requirements:
If investment-linked insurance is provided:
The solvency margin must be higher than 200 billion VND;
If retirement insurance is provided: The solvency
margin must be higher than 300 billion VND;
The information technology system must meet
requirements for each type of insurance as prescribed in Clause 2, Article 97
of this Decree.
d) In case of expanding the operational activities
to include more types of unit-linked insurance products of investment-linked
insurance, the insurer must be able to value assets and units of unit-linked
funds in an objective and accurate manner at least once a week and publicly
announce to the policyholders the buying and selling prices of units; establish
an Investment Council, utilize a fund management company and a custodian bank
that comply with Articles 100, 112 and 113 of this Decree.
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a) They have fully fulfilled their current
obligations to the State;
b) The curtailment of operational activities and
scope does not cause damage to the interests of the participants and other
relevant entities;
c) The transfer of insurance policies has been
approved by the Ministry of Finance as prescribed in Article 34 of this Decree.
3. Application for expansion of operational
activities, scope, and duration includes:
a) An application form for expansion of operational
activities, scope, and duration as specified in Appendix III to this Decree;
b) A competent authority's document as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam) on the expansion of
operational activities, scope, and duration;
c) Documents proving that the insurer, reinsurer,
or branch satisfies the requirements specified in Clause 1 of this Article,
except for the documents specified at Point b, Clause 1 of this Article;
d) In case of expanding the operational activities
to include more types of investment-linked insurance, retirement insurance, in
addition to the documents specified at Points a, b and c, Clause 3 of this
Article, the insurer must provide other documents prescribed in clauses 4, 5 of
this Article.
4. In case of expanding the operational activities
to include more types of investment-linked insurance, in addition to the
documents specified at Points a, b and c, Clause 3 of this Article, the insurer
must provide the following documents:
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b) Explanation of the facilities and infrastructure
to provide investment-linked insurance products, including: Information
technology system; the accounting system, which contains a detailed description
of the insurer's action plan as to the investment-linked fund in the following
cases: The customer makes a claim for insurance benefits upon an insured
event; the customer requests to terminate the insurance policy early; the
customer withdraws a part of the insurance premium, advances from the cash
surrender value, or matures the insurance policy; the customer requests to
convert unit-linked funds; unit-linked funds are misvalued, and other cases
specified in the rules and terms of the products to be provided;
c) Documents on process of selecting, training, and
managing agents that distribute investment-linked insurance products; contents
and program of training for insurance agents as to investment-linked insurance
products; distribution channels and ways of managing agents to advise,
introduce, offer for sale, and arrange the conclusion of investment-linked
insurance policies in compliance with the law;
d) If the insurer includes more types of
unit-linked insurance products under investment-linked insurance, they shall
also provide the following additional documents: The list of unit-linked funds,
investment policies that the insurer intends to apply to the assets of each
unit-linked fund; basis for allocation of premiums and expenses among
unit-linked funds; valuation methodology of fund units; documents proving that
the qualifications, capacity and professional experience of members of the
Investment Council satisfy the requirements specified in Article 112 of this
Decree; documents proving that the fund management company meets the
requirements specified in Article 100 of this Decree;
dd) A written commitment enclosed with a detailed
explanation that the insurer satisfies the requirements specified at Points c
and d, Clause 1 of this Article.
5. In case of expanding the operational activities
to include more types of retirement insurance, in addition to the documents
specified at Points a, b and c, Clause 3 of this Article, the insurer must
provide the following documents:
a) Summary of main contents of the retirement
insurance product to be provided, including target market, insurance benefits
to be provided; premium-charging method and basis; brochures; sales materials,
insurance claim forms; insurance certificate forms; and other documents that
the customer must declare and sign when purchasing insurance or when revising
the insurance policy;
b) Explanation of the facilities and infrastructure
to provide retirement insurance products, including Information
technology system; accounting system; the process of selecting, training, and
managing product distribution agents; content and program of training for
retirement insurance agents;
c) Details of the action plan and documents
provided for the insurer's customers for the provision of retirement insurance
products in the following cases: The customer makes a claim for insurance
benefits upon an insured event; the customer requests to transfer their
retirement insurance account to a new enterprise, to mature the insurance
policy, and other cases specified in the rules and terms;
d) A written commitment enclosed with a detailed
explanation that the insurer satisfies the requirements specified at Point c
Clause 1 of this Article.
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a) An application form for curtailment of
operational activities, scope and duration as specified in Appendix III to this
Decree;
b) A competent authority's document as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam) on the curtailment
of operational activities, scope, and duration;
c) Documents proving that the enterprise or branch
meets the requirements specified in Clause 2 of this Article;
d) Documents on transfer of the portfolios of
insurance policies as prescribed in Article 34 of this Decree.
7. Within 20 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised License according to
Appendix V hereto appended. If the application is rejected, the Ministry of
Finance shall provide an explanation in writing.
Article 22. Transfer of shares
or contributed capital that results in a shareholder or capital contributor
reaching or falling below the 10% ownership threshold.
1. The purchase and transfer of shares or
contributed capital that results in a shareholder or capital contributor
reaching or falling below the 10% ownership threshold must meet the following
requirements:
a) Do not cause damage to the legitimate rights and
interests of the policyholders, employees, and the State;
b) Comply with relevant laws;
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d) After transferring shares or contributed
capital, the insurer and reinsurers must still satisfy the requirements
specified at Point a, Clause 2, Clauses 3 and 4, Article 64 of the Law on
Insurance Business, and the requirements on shareholder structure specified in
Article 66 of the Law on Insurance Business for joint-stock companies.
2. Application for transfer of shares or
contributed capital that results in a shareholder or capital contributor
reaching or falling below the 10% ownership threshold includes:
a) An application form provided in Appendix IV to
this Decree;
b) The written approval of the competent authority
as prescribed in the company's charter on the transfer of shares or contributed
capital;
c) List of shareholders (or capital contributors),
charter capital and charter capital structure of the insurer, reinsurer formed
after the transfer of shares or contributed capital; documents proving that
both transferee and transferor meet the requirements in clause 1 hereof: This
provision does not apply to transfers of shares on the stock exchange for listed
companies.
d) A copy from the master register or certified
copy of the agreement in principle (AIP) on the transfer (unless the insurer or
reinsurer is listed or traded on a stock exchange);
dd) An audited financial statement for the previous
fiscal year of submission of the application for transfer of shares or
contributed capital (for corporate shareholders or capital contributors );
certification of an authorized bank in Vietnam on the balance of Vietnamese
dong or freely convertible foreign currency deposited at the bank (for
individual shareholders);
e) The shareholders’ written statement agreeing to
comply with the requirements set out in Clause 1 of this Article.
3. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
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a) Report on the results of the transfer of
contributed capital;
b) Documents specified at Point c and Point d
Clause 1 of this Article in case of transfer of shares on the stock exchange
for listed companies;
c) A written certification of the parties that
their relevant obligations and responsibilities in the transfer of shares or
contributed capital have been fulfilled;
d) Bank's confirmation of money transfer;
dd) Certification of fulfillment of tax obligations
related to the transfer (if any).
5. In case the approved capital transfer plan
cannot be implemented, the insurer or reinsurer must submit a report to the
Ministry of Finance outlining the action plan.
6. Within 14 days of receiving the report of the
insurer on the results of the transfer of the contributed capital, the Ministry
of Finance shall issue a revised License to the insurer or reinsurer provided
in Appendix V issued with this Decree.
Article 23. Full division,
partial division, acquisition, consolidation, or conversion of business entity
(hereinafter referred to as conversion)
1. Full division, partial division, acquisition,
consolidation, or conversion of an insurer, reinsurer, or foreign branch in Vietnam
must meet the following requirements:
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b) Comply with relevant laws;
c) Organizations and individuals that plan to
contribute capital to the insurer, reinsurer or foreign branch in Vietnam after
the full division, partial division, acquisition, consolidation, or conversion
must satisfy the requirements specified in Clause 1 and Point b, Clause 2,
Article 64, Articles 65, 66, Clause 1, Article 67 of the Law on Insurance
Business corresponding to the type of enterprise, branch and Article 11 of this
Decree;
d) The insurer, reinsurer, or foreign branch in
Vietnam formed after total or partial division, acquisition, consolidation or
conversion shall satisfy the requirements specified at Point a, Clause 2,
Clauses 3 and 4, Article 64 of the Law on Insurance Business and conditions on
shareholder structure specified in Article 66 of the Law on Insurance Business
for joint-stock companies, and Clause 2, Article 67 of the Law on Insurance
Business for foreign branches in Vietnam.
2. Application for full division, partial division,
acquisition, consolidation, or conversion includes:
a) An application form as specified in Appendix VI
issued with this Decree;
b) A competent authority's approval as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam) on the full
division, partial division, acquisition, consolidation, or conversion;
c) Report on how they carry out their full
division, partial division, acquisition, consolidation, or conversion, how they
deal with contracts which remain valid with customers, or with debt
obligations, obligations to the State, and commitments to employees;
d) List of shareholders (or capital contributors),
charter capital and charter capital structure of the insurer, reinsurer formed
after the full division, partial division, acquisition, consolidation, or
conversion;
dd) A copy from the master register or certified
copy of the agreement in principle (AIP) on the consolidation or acquisition
(unless the insurer is listed or traded on a stock exchange);
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g) A copy from the master register or certified
copy of the audited financial statement for the three consecutive years
preceding the year of application for consolidation or acquisition of the
acquired company/consolidating company and the insurer, reinsurer, or foreign
branch in Vietnam (the acquiring company/consolidated company);
h) Documents proving that capital contributors and
the insurer, reinsurer, or foreign branch in Vietnam to be established after
the full division, partial division, acquisition, consolidation, or conversion
meet the requirements in the Clause 1 of this Article.
3. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. Within 14 days from the date of completion of
the full division, partial division, acquisition, consolidation, or conversion
according to the approved plan, the insurer, reinsurer, or foreign branch in
Vietnam must send a completion report to the Ministry of Finance. In case
the approved capital transfer plan cannot be implemented, the insurer or
reinsurer must submit a report to the Ministry of Finance outlining the action
plan.
Within 14 days of receiving the completion report
of the insurer, reinsurer, or foreign branch in Vietnam on the full division,
partial division, consolidation, acquisition or conversion, the Ministry of
Finance shall issue a revise License to the insurer, reinsurer, or foreign branch
in Vietnam.
Article 24. Appointment or
removal of President of the Board of Directors (President of the Members'
Council), General Director (Director), Appointed Actuary.
1. An insurer, reinsurer, or foreign branch in
Vietnam must obtain a prior approval from the Ministry of Finance before
appointing or removing the following positions:
a) President of the Board of Directors, President
of the Members' Council of the insurer or reinsurer;
b) General Director (Director);
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2. President of the Board of Directors (President
of the Members' Council), General Director (Director), Appointed Actuary to be
appointed must meet the requirements in Article 81 of the Law on Insurance
Business, the Appointed Actuary must meet the requirements in Articles 29 and
30 of this Decree.
3. Application for appointment or removal of
positions specified in clause 1 hereof includes the following:
a) An application form for appointment or removal
specified in Appendix III to this Decree;
b) A competent authority's document as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam);
c) Police (clearance) certificates or equivalent of
foreigners as prescribed by foreign law, in accordance with point dd clause 2
Article 15 of this Decree; copies of 9-digit or 12-digit ID cards or people's
identity cards or passports; curricula vitae, certified copies of documents
proving years of experience of the candidate in their posts of managers or
controllers, certified copies of degrees or certificates of their
qualifications. In case the documents are in a foreign language, there must be
a notarized translation;
d) Written commitment of the person expected to be
appointed as the General Director (Director) or Appointed Actuary that he/she
will work for the insurer, reinsurer, or foreign branch in Vietnam and reside
in Vietnam after being approved by the Ministry of Finance.
4. Within 7 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
Article 25. Opening,
terminating, changing location of a branch or representative in Vietnam of an
insurer or reinsurer
1. Within 15 days of receiving the competent
authority’s approval for opening, terminating, changing location of a branch or
representative in Vietnam, the insurer or reinsurer must send a notice to the
Ministry of Finance together with the following documents:
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b) A report on responsibilities, arising issues,
and action plan upon termination of branch or representative office. The
insurer or reinsurer must undertake not to cause damage to current obligations
to the State, interests of their policyholders and other related entities;
c) Documentation showing the right to use the
location of the branch or representative office in case of opening or changing
the location of the branch or representative office.
2. Within 7 working days of receiving the complete
and valid application, the Ministry of Finance shall issue a certification of
opening, termination or relocation of branch or representative office in
Vietnam to the insurer or reinsurer, also send such a notice to the business
registry.
Section 3. OPERATION
Article 26. Qualifications
required for the Head of Supervisory Board, Supervisors
1. General qualifications specified in Clause 1,
Article 81 of the Law on Insurance Business.
2. He/she obtains at least a bachelor’s degree in
one of the majors in insurance, economics, finance, banking, business
administration, law, accounting, or auditing. Within 1 year from the effective
date of this Decree, insurers, reinsurers, and foreign branches in Vietnam must
ensure their Head of Supervisory Board and Supervisors meet this requirement.
3. The head of the Supervisory Board must have at
least 5 years of experience in the insurance, finance, or banking industry, or
have at least 3 years of experience as manager, executive, or supervisor at
enterprises that engage in insurance, finance, or banking industry. The
Supervisor must have at least 3 years of experience in the insurance, finance,
or banking industry.
4. He/she is not a relative of a member of the
Board of Directors, a member of the Members' Council, the Director or General
Director, or another manager. The identification of relatives must comply with
the Law on Enterprises.
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Article 27. Qualifications
required for the Head of Internal Audit
1. General qualifications specified in Clause 1,
Article 81 of the Law on Insurance Business.
2. He/she obtain at least a bachelor's degree in
insurance. If he/she does not obtain at least a bachelor’s degree in insurance,
he must obtain at least a bachelor’s degree in economics, finance, banking,
business administration, law, accounting, or auditing, and have an insurance
certificate issued by a training institution legally established and operating
at home or abroad.
3. He/she obtains at least 3 years of experience in
insurance, finance, banking, accounting, or auditing.
4. Clause 2 of this Article comes into force one
year after this Decree takes effect.
Article 28. Qualifications
required for the Head of Risk Management Department, the Head of Compliance
Supervisory Department
1. General qualifications specified in Clause 1,
Article 81 of the Law on Insurance Business.
2. The Head of Risk Management Department shall
obtain at least a bachelor's degree in risk management or actuarial services
for insurance. If he/she does not obtain at least a bachelor’s degree in risk
management or actuarial services for insurance, he must obtain at least a
bachelor’s degree in insurance, economics, finance, banking, business
administration, law, accounting, or auditing, and have a certificate in risk
management or actuarial services for insurance issued by a training institution
legally established and operating at home or abroad.
3. The Head of Compliance Supervisory Department
must obtain at least a bachelor’s degree in insurance. If he/she does not
obtain at least a bachelor’s degree in insurance, he must obtain at least a
bachelor’s degree in economics, finance, banking, business administration, law,
accounting, or auditing, and have an insurance certificate issued by a training
institution legally established and operating at home or abroad.
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5. Clauses 2, 3, and 4 of this Article come into
force one year after this Decree takes effect.
Article 29. Qualifications
required for Appointed Actuary of life insurers or health insurers
1. General qualifications specified in Clause 1,
Article 81 of the Law on Insurance Business.
2. He/she has been trained in and has at least 10
years of experience in actuarial services for life insurance, health insurance,
has at least 5 years of experience as a Fellow in a widely-accepted
international actuary association, such as: The Institute and Faculty of
Actuaries (IFoA) of UK, Society of Actuaries of America (SOA), the Institute
of Actuaries of Australia, Canadian Institute of Actuaries, or an official
member of International Actuarial Association (IAA).
3. He/she does not break the code of ethics for
actuarial services in insurance.
4. He/she is an employee at a life insurer or a
health insurer.
5. He/she has lived in Vietnam during his/her
tenure.
6. Clause 2 of this Article does not apply to the
Appointed Actuaries that have been approved by the Ministry of Finance before
the effective date of this Decree.
Article 30. Qualifications
required for Appointed Actuary of non-life insurers, reinsurers, foreign
branches in Vietnam
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2. He/she is an Associate in an actuary association
which is an official member of International Actuarial Association (IAA); or
has at least 5 years of experience in non-life insurance and obtains proof that
he/she has passed at least 2 exams of any of the following: The Institute and
Faculty of Actuaries (IFoA) of UK, Society of Actuaries of America (SOA), the
Institute of Actuaries of Australia, Canadian Institute of Actuaries, or
obtains proof that he/she has passed exams in an actuarial training course
which is acknowledged by any of above-mentioned associations that they are
equivalent to the association’s 2 exams.
After 3 years from the effective date of this
Decree, the Appointed Actuary of a non-life insurer, reinsurer, or foreign
branch in Vietnam must be at least an Associate of an actuary association which
is an official member of International Actuarial Association (IAA) and does not
break the code of ethics for actuarial services in insurance.
After 5 years from the effective date of this
Decree, the Appointed Actuary of a non-life insurer, reinsurer, or foreign
branch in Vietnam must be a Fellow, who has been trained in non-life insurance
of an actuary association which is an official member of International
Actuarial Association (IAA) and does not break the code of ethics for actuarial
services in insurance.
3. He/she is an employee at the insurer, reinsurer,
or foreign branch in Vietnam.
4. He/she has lived in Vietnam during his/her
tenure.
5. Clauses 3 and 4 of this Article come into force
one year after this Decree takes effect.
Article 31. Termination or
suspension of rights and obligations of the President of the Board of
Directors, President of the Members' Council, Director or General Director,
Appointed Actuary
1. If the President of the Board of Directors,
President of the Members' Council, Director or General Director, Appointed
Actuary of an insurer, reinsurer or foreign branch in Vietnam violates the
incumbent or office-holding principles specified in Article 82 of the Law on
Insurance Business, or no longer meets the qualifications specified in Article
81 of the Law on Insurance Business, the Ministry of Finance shall work with
the insurer, reinsurer, or foreign branch in Vietnam on this, with a written
record.
2. If the insurer, reinsurer, or foreign branch in
Vietnam takes remedial action to ensure compliance with Articles 81 and 82 of
the Law on Insurance Business, with a written record:
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b) After the suspension period ends, if the
insurer, reinsurer or foreign branch in Vietnam fails to take remedial action
to ensure compliance with Articles 81 and 82 of the Law on Insurance Business,
within 7 working days, the Ministry of Finance shall consider issuing a
decision to terminate the rights and obligations of the President of the Board
of Directors, the President of the Members' Council, the Director or the
General Director. Director, Appointed Actuary.
3. If the insurer, reinsurer or foreign branch in
Vietnam fails to send a report on remedial action to ensure compliance with
Articles 81 and 82 of the Law on Insurance Business, enclosed with a written
record, within 7 working days, the Ministry of Finance shall consider issuing a
decision to terminate the rights and obligations of the President of the Board
of Directors, the President of the Members' Council, the Director or the
General Director. Director, Appointed Actuary.
Section 4. PROFESSIONAL OPERATIONS
Article 32. Procedures for
registration of premium-charging method and basis
1. Insurers and branches of foreign non-life
insurers must register and obtain approval from the Ministry of Finance the
premium-charging method and basis of insurance products of life insurance,
health insurance, and motor vehicle insurance, except for civil liability
insurance of motor vehicle owners before provision.
2. Insurers and branches of foreign non-life
insurers must submit to the Ministry of Finance one set of application for
registration of premium-charging method and basis, including the following
documents:
a) An application form for registration of
premium-charging method and basis, provided in Appendix VII to this Decree;
b) Summary of insurance benefits and waiver of
insurance products to be provided;
c) Explanatory documents on premium-charging method
and basis, at least including details about premium-charging method and basis,
and formula; fees charged to customers for insurance products in the
investment-linked insurance and retirement insurance business. Explanatory
document on the premium-charging method and basis, using the form guided by the
Minister of Finance.
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4. If the premium-charging method and basis of an
insurance product changes, or the rules, conditions, and terms of an insurance
product change in a way that affects the premium-charging method and basis, the
insurer or branch of foreign non-life insurer shall submit to the Ministry of
Finance one application for amendments to the premium-charging method and
basis, including the following documents:
a) An application form for amendments to the premium-charging
method and basis, provided in Appendix VII to this Decree;
b) Documents that explain the amendments certified
by the Appointed Actuary.
5. Within 30 days of receiving a complete and valid
application, the Ministry of Finance shall issue a written approval of the
premium-charging method and basis to the insurer or the branch of foreign
non-life insurer. If the application is rejected, the Ministry of Finance shall
provide an explanation in writing.
6. Within 2 years from the effective date of this
Decree:
a) Life insurers may continue to provide life
insurance products and health insurance products that have been approved by the
Ministry of Finance before the effective date of this Decree.
b) Non-life insurers, branches of foreign non-life
insurers may continue to use the fee schedules for the following products:
health insurance products with an insurance period of one year or less, and a
death risk insurance product with an insurance period of one year or less that
has been approved by the Ministry of Finance before the effective date of this
Decree, health insurance products provided before October 1, 2012, motor
vehicle insurance products approved by the Ministry of Finance for registration
before the effective date of this Decree.
c) Insurers, branches of foreign non-life insurers
must review and re-register the premium-charging method and basis of life
insurance, health insurance, motor vehicle insurance products in compliance
with regulations of the Ministry of Finance. If the premium-charging method and
basis of a life insurance, health insurance or motor vehicle insurance product
which has been approved by the Ministry of Finance meet the prescribed
requirement before the effective date of this Decree, the insurer or branch of
foreign non-life insurer is not required to re-register another
premium-charging method and basis.
Article 33. Eligibility
requirements for foreign insurers, foreign reinsurers, foreign reinsurance
organizations
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2. Leading foreign reinsurers/organizations, and
foreign reinsurers/organizations that receive at least 10% of reinsurance ceded
of each reinsurance policy must be rated at least “BBB” by Standard &
Poor's or Fitch, “Baal” by Moody’s or equivalent grade by another competent and
experienced rating body in the fiscal year prior to the time of conclusion of
the reinsurance policy.
3. If an insurer, reinsurer, or foreign branch in
Vietnam cedes their insurance policies to their foreign parent company or a
company in their group (reinsurance company) but the reinsurance company does
not have a credit rating as prescribed above, the insurer, reinsurer, or
foreign branch shall submit to the Ministry of Finance a certification, made by
the insurance authority of the home country of the reinsurance company, stating
that the reinsurance company meets solvency requirements in the fiscal year
preceding the year of reinsurance.
Section 5. TRANSFER OF PORTFOLIOS OF INSURANCE POLICIES
Article 34. Procedures and
documentation for transfer of portfolios of insurance policies
1. Insurers and branches of foreign non-life insurers
that transfer the entire portfolios of insurance policies of one or several
types of insurance (hereinafter referred to as transferring enterprises) must
submit to the Ministry of Finance one set of documentation as follows:
a) An application form for transfer specified in
Appendix VIII to this Decree;
b) A transfer plan, at least containing: Name
and address of the insurer, branch of foreign non-life insurer that receives
the transfer (hereinafter referred to as the receiving enterprise); type of
insurance and number of insurance policies to be transferred; the method of
transferring the technical reserves and insurance liabilities related to the
transferred policies; estimated time of the transfer; detailed explanation of
the receiving enterprise on how it meets financial requirements after the
transfer.
c) A transfer contract, at least containing:
Subject matter of transfer; rights and obligations of the parties to the
transfer; estimated time of the transfer; settlement of disputes.
d) Commitments of the receiving enterprise to
safeguard the interests of the insurance policyholders under the transferred
insurance policy once the transfer is complete.
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2. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
3. Within 30 days from the date the Ministry of
Finance approves the transfer of the portfolios of insurance policies, the
transferring enterprise must announce the transfer as follows:
a) Publish on the enterprise's website about the
transfer as follows: Name and address of the transferring enterprise and
receiving enterprise; type of insurance and number of insurance policies to be
transferred; estimated time of the transfer; contact information to deal with
claims and questions from insurance policyholders related to the transfer.
b) Send a notice together with a summary of the
transfer plan to each insurance policyholder. The notice sent to the insurance
policyholder must clearly state that within 15 days from the date of receipt of
the notice, the insurance policyholder is allowed to terminate the insurance
policy if he/she does not agree with the transfer plan and the effective date
of the transfer plan.
c) Send an agreement to the insurance policyholder
and the insured of any reduction in the sum insured or insurance benefits, and
other obligations under the insurance policy if the portfolios of insurance
policies are transferred as required by the Ministry of Finance as prescribed
in Clause 1, Article 91 of the Law on Insurance Business, but the asset value
is lower than the technical reserve of the transferred insurance policies.
4. After signing the contract for transferring the
portfolios of insurance policies, the transferring enterprise may not issue any
new insurance policies related to the transferred type of insurance.
5. Within 60 days from the date the Ministry of
Finance approves the transfer plan, the transferring enterprise shall transfer
to the receiving enterprise:
a) All valid insurance policies under the transfer
plan approved by the Ministry of Finance;
b) Unsettled insurance claims related to the
transferred type of insurance;
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6. The receiving enterprise is responsible for
coordinating with the transferring enterprise in formulating the transfer plan,
determining the value of assets related to the funds and technical reserves of
the transferred insurance policies and agree on the effective date of the
transfer plan.
7. From the date of receipt of the transfer, the
receiving enterprise is responsible for performing the obligations of the
transferred insurance policies in accordance with the terms and conditions
signed between the transferring enterprise and the insurance policyholders,
including Incurred-but-Not-Reported (IBNR) claims. The receiving enterprise has
the right to receive assets related to the funds and technical reserves of the
transferred insurance policies and use such property to perform obligations
under the transferred insurance policies.
Section 6. FINANCE, ACCOUNTING AND FINANCIAL REPORTS
Article 35. Minimum charter
capital
1. Minimum charter capital of life insurers:
a) Life insurance business (except unit-linked
insurance, retirement insurance) and health insurance: VND 750 billion; b)
Insurance business as prescribed at Point a of this Clause and unit-linked
insurance or retirement insurance: VND 1,000 billion;
c) Insurance business as prescribed at Point a of
this Clause, unit-linked insurance, or retirement insurance: VND 1,300 billion.
2. Minimum charter capital of non-life insurers:
a) Non-life insurance business (except aviation
insurance, satellite insurance) and health insurance: VND 400 billion;
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c) Insurance business as prescribed at Point a of
this Clause, aviation insurance and satellite insurance: VND 500 billion.
3. Minimum charter capital of health insurers: VND
400 billion.
4. Minimum charter capital of reinsurers:
a) Reinsurance business, non-life reinsurance, or
both non-life reinsurance and health reinsurance: VND 500 billion;
b) Reinsurance business, life reinsurance, or both
life reinsurance and health reinsurance: VND 900 billion;
c) Reinsurance business, all life reinsurance,
non-life insurance, and health reinsurance: VND 1,400 billion.
5. If insurers and reinsurers which are
established, organized, and operating before the effective date of this Decree
have a charter capital lower than the minimum charter capital specified in this
Article, they must, before January 1, 2028, top up their charter capital to the
required minimum level and put down a deposit as prescribed.
Article 36. Minimum allocated
capital
1. Minimum allocated capital of branches of foreign
non-life insurers:
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b) Insurance business as prescribed at Point a of
this Clause and aviation insurance and satellite insurance: VND 300 billion;
c) Insurance business as prescribed at Point a of
this Clause, aviation insurance and satellite insurance: VND 400 billion.
2. Minimum allocated capital of branches of foreign
reinsurers:
a) Reinsurance business, non-life reinsurance, or
both non-life reinsurance and health reinsurance: VND 400 billion;
b) Reinsurance business, life reinsurance, or both
life reinsurance and health reinsurance: VND 450 billion;
c) Reinsurance business, all life reinsurance,
non-life insurance, and health reinsurance: VND 700 billion.
3. If branches of foreign non-life insurers which
are established, organized, and operating before the effective date of this
Decree have a charter capital lower than the minimum allocated capital
specified in this Article, they must, before January 1, 2028, top up their
capital to the required minimum level and put down a deposit as prescribed.
Article 37. Management of
owner’s equity
1. During the course of operation, insurers and
reinsurers must maintain their equity sources greater than the given minimum
solvency margin and meet the following regulations:
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b) As for insurers and reinsurers that have been
licensed since January 1, 2023, the charter capital and owner's equity must not
fall below the minimum charter capital as prescribed in Article 35 of this
Decree.
2. During the operation process, the foreign branch
in Vietnam must maintain their equity sources greater than the given minimum
solvency margin and meet the following regulations:
a) As for foreign branches in Vietnam licensed
before January 1, 2023: Before January 1, 2028, the charter capital and owner’s
equity must not fall below the prescribed legal capital specified in Article 10
of Decree No. 73/2016/ND-CP; from January 1, 2028, the charter capital and
owner's equity must not fall below the minimum charter capital as prescribed in
Article 36 of this Decree;
b) As for foreign branches in Vietnam that have
been licensed since January 1, 2023, the allocated capital and equity must not
fall below the minimum allocated capital as prescribed in Article 36 of this
Decree.
3. Quarterly, based on financial statements,
insurers, reinsurers, and foreign branches in Vietnam must re-evaluate their
equity sources. In case their equity source does not satisfy the requirements
in Clauses 1 and 2 of this Article, the insurers, reinsurers, or foreign
branches in Vietnam must top up their capital to the required level in
accordance with Clauses 2, 3, 4, 5 and 6, Article 19 of this Decree within 6
months from the end of the quarter.
Article 38. Technical reserve
for non-life insurance
1. Non-life insurers, non-life reinsurers, and
foreign branches in Vietnam must set aside technical reserve for each insurance
type or insurance policy corresponding to the liability portion committed as
agreed in the insurance policy and must be certified by their Appointed
Actuary.
2. Technical reserve includes:
a) Unearned premium reserve: Used to pay out the
claims that will arise during the validity of the insurance policy in the
following year;
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c) Loss reserve: Used to pay out claims when a loss
fluctuation or a major loss occurs that the total insurance premium in the
fiscal year, less the unearned premium reserve and the claim reserve, is not
enough to cover the part of the liability of the insurer or foreign branch in
Vietnam.
3. Non-life insurers, foreign branches in Vietnam,
non-life reinsurers may either choose methods of setting aside reserves under
the guidance in Article 39 of this Decree, or choose other methods as long as
they could prove that those methods are more accurate and complete, and obtain
a prior approval from the Ministry of Finance as prescribed in Article 45 of
this Decree.
Article 39. Method and basis
of setting aside non-life insurance reserves
1. Unearned premium reserve will be set aside based
on:
a) ratio of reserve to total premium; or
b) the coefficient of the insurance policy term.
2. Claim reserve will be set aside based on:
a) statistics on claims; or
b) claims ratio.
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Article 40. Technical reserve
for life insurance
1. Life insurers, life reinsurers, and foreign life
insurance branches in Vietnam must set aside technical reserve for each
insurance policy corresponding to the liability portion committed as agreed in
the insurance policy and must be certified by their Appointed Actuary.
2. Technical reserve includes:
a) Mathematical reserve: Used to pay out claims for
the liabilities as committed upon occurrence of insured events.
b) Unearned premium reserve: Used to pay out claims
that will arise during the validity of the insurance policy in the following
year;
c) Claim reserve: Used to satisfy those claims that
have not been reported, or have been reported to the company but not yet
resolved or paid at the end of the fiscal year;
d) Profit distribution reserve: Used to pay the
profit that the insurer has agreed with the insurance policyholder in the
insurance policy;
dd) Reserve to secure committed interest rates:
Used to secure the committed interest rates that the
insurer/reinsurer/branch pays customers as agreed in the universal life
insurance and retirement insurance policies;
e) Equalization reserve: Used to pay out claims
when the insured event occurs due to large fluctuations in the risk ratio and
technical interest rate.
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4. Life insurers, life reinsurers, and branches of
foreign life reinsurers must regularly their methods and basis of setting aside
reserves and maintain sufficient reserves to meet the insurance liabilities
that they have underwritten.
In case of changing the method of setting up
technical reserves, life insurers, life reinsurers, branches of foreign life
reinsurers shall seek an approval prescribed in Article 45 of this Decree.
In case of changing the basis of setting up technical reserves (except
for the case of reducing the technical interest rate to meet the guidance of
the Ministry of Finance), the life insurer, life reinsurer, or branch of
foreign life reinsurer shall obtain a prior approval from Ministry of Finance,
together with documents proving the basis for setting up technical reserves in
accordance with Article 45 of this Decree.
Article 41. Method and basis
for setting aside life insurance reserves
1. Mathematical reserve for term life insurance,
pure endowment insurance, endowment insurance, whole life insurance, and
annuities:
a) Life insurers, life reinsurers, branches of
foreign life reinsurers may actively choose the method of setting aside
mathematical reserve for insurance policies with a term of more than 1 year to
meet their future insurance liabilities such as: Gross premium valuation
reserve, net premium valuation reserve, Zillmer adjustment, or other methods in
conformity with international practice;
b) Basis for setting aside reserves of the methods
at Point a, Clause 1 of this Article, includes: Mortality Table CSO1980,
technical interest rates based on average interest rates of Government bonds
for the period of at least 10 years, and other technical bases corresponding to
each insurance product.
2. Mathematical reserve for universal life
insurance products, unit-linked insurance, retirement insurance, and
mathematical reserve includes:
a) Insurance loss reserve: The higher of the two
reserves, as calculated by the unearned premium method or the cash flow method,
to meet the liability from future claims it will have to pay out on during the
term of the policy;
b) Technical reserve for the universal life
insurance is calculated based on: Either the cash surrender value of universal
life insurance policies plus a reserve for paying out expected claims in a
period upon the occurrence of insured events, or total value of the universal
life insurance policies.
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c) Technical reserve for the unit-linked insurance,
including:
Total number of units of the policyholder on the
date of valuation multiplied with the buying price of the units;
Total insurance premium received from the policyholder
on the date of valuation, less charges imposed on the policyholder, this
remaining amount is used to buy unrealized units;
d) Technical reserve for retirement insurance is
total value of the retirement insurance account on the date of setting aside
the reserve;
dd) Reserve for other insurance benefits, except
insurance risk benefits and investment benefits.
3. Unearned premium reserve: To be calculated based
on the gross premium valuation in a method specified in clause 1 Article 39 of
this Decree as for insurance policies with the term of 1 year or less.
4. Claim reserve will be set aside based on:
a) Statistics on claims;
b) claims ratio.
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a) Reserve for disclosed profits is the sum of cash
amounts or the present value of disclosed accumulated dividends distributed to
among policyholders until the current fiscal year and unpaid;
b) Reserve for undisclosed profits:
Reserve for undisclosed profits is set aside to pay
profits to be distributed to policyholders in the future. This reserve is equal
to assets of the policyholder fund less the fund’s debts, supporting fund of
the owners, and profits that have been distributed in the current year.
6. Reserve to secure committed interest rates:
In case the investment market fluctuates or the expected investment
returns from insurance premiums are lower than the committed interest rates,
the insurer shall set aside a reserve to secure committed interest rates. The
reserve amount is equal to the difference between the expected investment
return from the insurance premium and the committed interest rates of the
insurer to the customer as agreed in the insurance policy.
7. The equalization reserve is set aside based on
the percentage of profit before tax of the life insurer, life reinsurer, or
branch of foreign life reinsurer.
Article 42. Technical reserve
for health insurance
1. Insurers, reinsurers and foreign branches in
Vietnam must set aside a technical reserve for each health insurance policy
corresponding to their liability and must be confirmed by an Appointed Actuary.
2. Technical reserve includes:
a) Mathematical reserve: Used to pay out claims for
the liabilities as committed upon occurrence of an insured event;
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c) Claim reserve: Used to satisfy those claims that
have not been reported, or have been reported to the company but not yet
resolved or paid at the end of the fiscal year;
d) Equalization reserve: Used to pay out claims
when the insured event occurs due to large fluctuations in the risk ratio and
technical interest rate.
3. Insurers, reinsurers, foreign branches in
Vietnam may either choose methods and basis of setting aside reserves under the
guidance in Article 43 of this Decree, or choose other methods and basis as
long as they could prove that those methods are more accurate and complete, and
obtain a prior approval from the Ministry of Finance as prescribed in Article
45 of this Decree.
Article 43. Method and basis
for setting aside health insurance reserves
1. Mathematical reserve:
Mathematical reserve is used to insurance policies
with a term of more than 1 year to meet their future insurance liabilities upon
occurrence of insured events. Insurers, reinsurers, and foreign branches in
Vietnam are entitled to choose the appropriate method of setting aside reserves
such as: Gross premium valuation reserve, net premium valuation reserve,
or other methods in conformity with international practice.
2. Unearned premium reserve: To be calculated based
on the methods specified in clause 1 Article 39 of this Decree as for insurance
policies with the term of 1 year or less.
3. Claim reserve will be set aside based on:
a) Statistics on claims;
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4. Equalization reserve:
a) The equalization reserve is set aside based on
the percentage of profit before tax of the life insurer, life reinsurer, or
branch of foreign life reinsurer;
b) The annual reserve is set aside based on the
percentage of withheld premium of the non-life insurer, reinsurer, or branch of
foreign life reinsurer.
Article 44. Responsibilities
of the Ministry of Finance
The Minister of Finance shall guide, illustrate
methods, formulas, and bases for setting up technical reserves for non-life
insurance, life insurance and health insurance according to this Decree.
Article 45. Application and
procedures for registration of the method of setting aside technical reserves
1. Insurers, reinsurers, and foreign branches in
Vietnam must not change their method of setting aside technical reserves in a
fiscal year. Insurers, reinsurers, and foreign branches in Vietnam must seek an
approval before changing their method of setting aside technical reserves in
the following fiscal year.
2. Application for registration or change of the
method and basis of setting aside technical reserves includes:
a) Application form for registration or change of
the method and basis of setting aside technical reserves specified in Appendix
IX issued herewith;
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3. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. Insurers, reinsurers, and foreign branches in
Vietnam whose methods or basis of setting aside technical reserves are not
consistent with this Decree shall re-register them with the Ministry of Finance
within 6 months from the date of signing this Decree, applicable to the fiscal
year from January 1, 2023. This provision does not apply to the provision for
universal life insurance.
5. Within 1 year from the effective date of this
Decree, the life insurer must review and register with the Ministry of Finance
the method of setting aside technical reserves for universal life insurance as
prescribed in this Decree.
6. Regarding health insurance policies with a term
of more than 1 year that have come into force before the effective date of this
Decree, the non-life insurers may continue to set aside mathematical reserve
according to the net premium valuation approved by the Ministry of Finance.
Article 46. Investment from
owner's equity
1. The investment from owner’s equity is equal to
the capital specified in Clauses 1 and 2, Article 37 of this Decree or the
minimum solvency margin, whichever is greater, shall be made in Vietnam
according to regulations on investment of idle capital from technical reserve
of insurance.
2. The outward investment from owner’s equity must
comply with Articles 47 and 48 of this Decree.
Article 47. Conditions for
outward investment
1. Being eligible for outward investment according
to the investment law and the law on foreign exchange management.
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a) They have gained profits for 3 consecutive years
prior to the year of outward investment as shown in the financial statements
which have been independently audited by an independent audit organization with
an unqualified opinion;
b) The owner's equity, when making the latest
financial statement, meets the requirements in Article 37 of this Decree;
c) They satisfy the applicable requirements
pertaining to solvency margin at the time of submitting the latest report;
d) They must not have been penalized for
administrative violations in the insurance business field with a total amount
of at least VND 400 million within 12 months of submitting the application.
3. They have fully fulfilled their current
obligations to the State.
4. The have an internal process, internal control
and audit, identification and management of risks related to outward investment
activities.
5. In addition to Clauses 1, 2, 3 and 4 of this
Article, outward portfolio investments by insurers and reinsurers shall comply
with the Government's regulations on outward portfolio investment.
Article 48. Limits,
documentation of, and procedures for outward investment
1. Insurers and reinsurers are permitted to make
outward investment any equity that they have above the minimum capital
requirement specified in Clause 1, Article 46 of this
Decree.
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a) Establishing or contributing capital for the
establishment; contributing capital, buying shares, purchasing stakes of
insurers, reinsurers in foreign countries; establishing branches or
representative offices, and other forms of commercial presence of insurers and
reinsurers abroad: No restriction;
b) Limits of outward portfolio investments:
Purchase of government bonds, treasury bills,
promissory notes: No restriction;
Bonds, treasury bills, promissory notes issued by
issuers rated by international credit rating agencies: Standard &
Poor's, Moody's Investors Service and Fitch Ratings: Up to 50% of outward
investment amount;
Purchase of listed shares, listed fund
certificates: Up to 15% of outward investment amount;
3. An application for performance, adjustment, or
termination of outward investment as prescribed at Point a, Clause 2 of this
Article includes the following:
a) An application form specified in Appendix X to
this Decree;
b) A competent authority's approval, according to
the company's charter, for the insurer, reinsurer to perform, adjust, or
terminate the outward investment;
c) Explanatory documents on performance,
adjustment, or termination of outward investment:
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Regarding adjustment of investment capital source
and investment form, the documents must specify the situation and results of
investment, difficulties, and advantages (if any) and the plan for adjustment.
Regarding termination of outward investment, the
documents must specify the reason for termination, investment performance
results, capital recovery potentials, and the expected length of time to
terminate investment activities;
d) Internal process on outward investment,
including matters regarding internal audit, risk recognition and management
related to outward investment, in case of application for performance or
adjustment of outward investment;
dd) In case of establishment of a branch,
representative office, or other form of commercial presence in a foreign
country, the insurer or reinsurer must submit a draft Regulation on
organization and operation of the branch, representative office, or other form
of commercial presence in the foreign country as prescribed by law;
e) Documentation proving that the insurer or
reinsurer meets the requirements at Points a, b and c, Clause 2, Article 47 of
this Decree, as for application for performance of outward investment;
g) The tax authority's document certifying that the
tax obligations have been fulfilled to the State of Vietnam up to submission of
application for performance or adjustment.
4. Procedures for performance, adjustment, or
termination of outward investment as prescribed at Point a, Clause 2 of this
Article:
a) Except as provided in clause 5 hereof, the
insurer or reinsurer shall submit an application for performance, adjustment,
or termination of outward investment as specified in clause 3 hereof to the
Ministry of Finance, in person or by post or through the online public service
system;
b) Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue an approval or
reject the application. If the application is rejected, the Ministry of Finance
shall provide an explanation in writing.
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5. In case of change of location or name of a
branch, representative office, or other form of commercial presence in the
foreign country, the insurer or reinsurer must notify the Ministry of Finance
in writing within 15 days from the date of change.
6. Documentation and procedures for outward
investment as prescribed at Point b, Clause 2 of this Article shall comply with
regulations on outward portfolio investment.
Article 49. Revenue of
insurers, reinsurers, and foreign branches in Vietnam
1. Revenue of an insurer, reinsurer or foreign
branch in Vietnam is the receivable amount in a period, including:
a) Revenue from insurance and reinsurance business
is the receivable amount in a period after deducting payables to reduce
revenues arising in the period;
b) Revenue from providing insurance auxiliary
services;
c) Revenue from financial activities;
d) Other operating income.
2. Receivable amounts in the period specified at
Point a, Clause 1 of this Article includes:
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b) Reinsurance premium;
c) Ceding commission;
d) Fees for brokering assessment, brokering
compensation examination, claiming compensation from a third person, and
handling of goods for which 100% indemnity has been paid;
dd) Fees for assessing damage, excluding assessment
among subsidiaries that keep internal accounting in the same independent
accounting insurer;
e) Leading fee of the leading insurer or branch of
foreign non-life insurer in the case of coinsurance.
3. Expenses recorded as decreases in revenue in the
period specified at Point a, Clause 1 of this Article includes:
a) Insurance premium refund;
b) Insurance premium reduction;
c) Reinsurance ceding fee;
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dd) Reinsurance premium reduction;
e) Ceding commission refund;
g) Ceding commission reduction.
4. Revenue from providing insurance auxiliary
services: Revenue from providing insurance auxiliary services as prescribed in
Section 3, Chapter IV of the Law on Insurance Business.
5. Revenue from financial activities:
a) Revenue from investment activities as prescribed
in this Decree;
b) Interest on the deposit amount;
c) Property rental;
d) Other revenues as prescribed by law.
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a) Revenues from sale and liquidation of fixed
assets;
b) Bad debts which have been written off and are
now recovered;
c) Other revenues as prescribed by law.
7. The Minister of Finance promulgates regulations
on the time of recognizing insurance revenue for each type of insurance.
Article 50. Expenditures of
insurers, reinsurers, and foreign branches in Vietnam
1. Expenditures of an insurer, reinsurer or foreign
branch in Vietnam is the payable amount in a period, including:
a) Expenditures on insurance and reinsurance
business:
b) Expenditures on provision of insurance auxiliary
services;
c) Expenditures on financial activities;
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2. Expenditures on insurance and reinsurance
business: is the payable amount in a period after deducting revenues recorded
as decreases in expenses arising in the period;
3. Payable amount in the period specified at Clause
2 of this Article includes:
a) Indemnities of original non-life insurance;
payout of life insurance, health insurance;
b) Indemnities of reinsurance;
c) Technical reserves;
d) Insurance agent commission, bonuses, financial
assistance for insurance agents and other benefits in the insurance agent
contract up to the amount laid down by the Minister of Finance.
From the date of signing of this Decree, these
expenses must be incurred from insurance agent activities and clearly stated in
the insurance agent contract, with specific quantitative criteria associated
with the results and achievements of utilization and maintenance of life
insurance and health insurance policies for more than 1 year, efficiency of
insurance agent activities. Bonuses, financial assistance for insurance agents
and other benefits must be clearly stated in the policy on bonuses, financial
assistance for insurance agents, financial regulations of insurers, branches of
foreign non-life insurers;
dd) Expenditures on insurance brokers include
Insurance brokerage commissions and other expenses as prescribed;
e) Expenditures on damage assessment;
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h) Expenditures on handling of goods for which 100%
indemnity has been paid;
i) Leading fee of the leading insurer or branch of
foreign non-life insurer in the case of coinsurance (with a written agreement);
k) Expenditures on management of insurance agents,
including Expenditures on initial training and certification exams for agents,
expenditures on knowledge improvement training for agents, and expenditures on
recruiting insurance agents;
l) Expenditure for preventing risks and limiting
losses up to 2% of the premium collected in the fiscal year. This expenditure
is used for taking measures to prevent and limit losses as prescribed in Clause
3, Article 122 of the Law on Insurance Business;
m) Expenditures on risk assessment of subject
matters of insurance;
n) Expenditures on the use of insurance auxiliary
services, including Consulting, insurance underwriting, actuarial services for
insurance, insurance loss assessment, and support for claim settlement;
o) Other expenditures and deductions as prescribed
by law.
4. Revenues recorded decreases in expenses in the
period specified in Clause 2 of this Article includes:
a) Payout from reinsurance;
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c) Proceeds from the goods for which 100% indemnity
has been paid;
d) Technical reserves for the non-life reinsurance
ceded.
5. Expenditures on provision of insurance auxiliary
services are amounts payable in a period to provide auxiliary insurance
services.
6. Expenditures on financial activities:
a) Investment operating costs as prescribed in this
Decree;
b) Investment income payable to the insurance
policyholder as committed in the life insurance policy;
c) Property rental costs;
d) Expenditures on bank fees and loan interest
payments;
dd) Other expenditures and deductions as prescribed
by law.
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a) Expenditures on sale and liquidation of fixed
assets;
b) Expenditures on the recovery of bad debts which
have been written off and are now recovered;
c) Other expenditures and deductions as prescribed
by law.
8. Expenditures must be paid in accordance with
regulations of law, with sufficient invoices or proof.
Article 51. Application and
procedures for registration of the principles of separation of equity and
premiums
1. Insurers, reinsurers, and foreign branches in
Vietnam must register with the Ministry of Finance the principles of separation
and allocation of assets, capital sources, revenue and expenses related to both
equity fund and policyholder fund prior to application.
2. Application for registration and change includes
the following documents:
a) An application form for registration or change
specified in Appendix XI to this Decree;
b) Explanatory documents on expected principles of
separation and allocation, certified by the Appointed Actuary of the insurer,
reinsurer, or branch. In case of change, the application also includes a
document explaining the change.
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4. Insurers, reinsurers, and foreign branches in
Vietnam whose principles of separation of equity and premiums are not consistent
with this Decree shall re-register them with the Ministry of Finance within 6
months from the date of signing this Decree, applicable to the fiscal year from
January 1, 2023.
Article 52. Profits, profit
distribution
1. Profits of an insurer, reinsurer or foreign
branch in Vietnam is the difference between the total revenue and the total
cost of the insurer, reinsurer, or foreign branch in Vietnam. Profits realized
in a year of the insurer, reinsurer, or foreign branch in Vietnam include
profits from insurance business activities, profits from financial activities
and other activities.
2. Once the insurer, reinsurer, or branch has fully
met requirements pertaining to capital, solvency, technical reserves, corporate
income tax payment, cash reserve fund, cover of losses of the previous years
which are no longer deductible against profits before corporate income tax,
they may distribute the remaining profits as prescribed.
Article 53. Application for
approval or change of the surplus distribution method in life insurance
1. Life insurers must obtain approval from the
Ministry of Finance of the method of surplus distribution of the profit-sharing
insurance policyholder fund before applying it. The application for approval or
change of surplus distribution method includes the following documents:
a) An application form for registration or change
of surplus distribution method specified in Appendix XII to this Decree;
b) Explanatory documents on the surplus
distribution method to be applied with confirmation of the Appointed Actuary.
2. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
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Insurers, reinsurers, insurance brokers and foreign
branches in Vietnam must deduct 5% of their annual profit after tax to
establish a cash reserve fund. The maximum level of the required cash reserve
fund is 10% of the charter capital of the insurer/reinsurer, the allocated
capital of the branch.
Section 7. DISSOLUTION OF INSURERS, REINSURERS, CEASED OPERATION OF
FOREIGN BRANCHES IN VIETNAM
Article 55. Requirements,
application, and procedures for dissolution of insurers, reinsurers, ceased
operation of foreign branches in Vietnam
1. Insurers and reinsurers may only be dissolved;
foreign branches in Vietnam may only cease their operation when they have paid
all debts and other property obligations and have not been during the dispute
settlement process at Court or Arbitration. The relevant manager and the
insurer, reinsurer, and foreign branch in Vietnam are also jointly liable for
the debts of the insurer, reinsurer, and foreign branch in Vietnam.
2. The payment of debts of insurers, reinsurers,
and foreign branches in Vietnam shall be made in the following order of
priority:
a) Unpaid salaries, severance allowances, social
insurance premiums, health insurance premiums, unemployment insurance premiums as
per the law, and other benefits of employees under collective bargaining
agreements and signed employment contracts;
b) Insurance indemnities or claim settlement under
which the insurer or reinsurer has accepted payment of cash surrender value,
account balance of insurance policy or insurance premium refunds;
c) Owes in taxes;
d) Other debts.
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a) An application form for dissolution or ceased
operation signed by the legal representative, which states the reason for
dissolution or ceased operation as specified in Appendix XIX issued herewith;
b) A competent authority's decision as prescribed
in the company's charter (for insurer or reinsurer) or Regulation on
organization and operation (for foreign branch in Vietnam);
c) A written revocation of establishment and
operation license, as for point c, clause 1, Article 115 of the Law on
Insurance Business, or a written termination of control measure, as for point
d, clause 1, Article 115 of the Law on Insurance Business;
d) Supporting documents on
that fact that the insurer, reinsurer, or foreign branch in Vietnam has paid
all the debts, property obligations and has committed not to be in the process
of settling disputes in court or arbitration as prescribed in clause 4 hereof;
dd) The establishment and operation license.
4. Supporting documents on that fact that the
insurer, reinsurer, or foreign branch in Vietnam has paid all the debts,
property obligations and has committed not to be in the process of settling
disputes in court or arbitration include:
a) Report on the payment of financial obligations
to employees as prescribed by law;
b) Report on the payment of liabilities to the
insurance policyholders, including payment of due liabilities under the
insurance policies and the transfer of insurance policies as prescribed (for
the insurer or foreign branch in Vietnam);
c) Report on payment of liabilities to the State
and other creditors;
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dd) Other supporting documents (if any).
5. Members of the Board of Directors, members of
the Members' Council, the Director or General Director, and the legal representative
of the insurer, reinsurer or foreign branch in Vietnam shall be responsible for
the truthfulness and accuracy of the documentation.
6. Within 20 days of receiving a complete and valid
application, the Ministry of Finance shall issue a decision on dissolution of
the insurer or reinsurer; terminate the operation of the foreign branch in
Vietnam.
7. In case the application for dissolution or
ceased operation is inaccurate or forged, the persons specified in Clause 5 of
this Article shall be held jointly and severally liable for payment of
financial obligations to employees and unpaid taxes, other unpaid debts, and be
personally responsible before law for the consequences arising within 5 years
from the date of submitting the application for dissolution or ceased operation
to the Ministry of Finance.
Section 8. REPRESENTATIVE OFFICES IN VIETNAM
Article 56. Application and
procedures for issuance of license for establishment of representative office
in Vietnam
1. Foreign insurers, foreign finance-insurance
institutions, foreign reinsurers, foreign insurance brokers (hereinafter
referred to as foreign enterprises) submit the Ministry of Finance, in person,
by post, or online (if applicable), one set of the following documents:
a) An application form for license for
establishment of representative office in Vietnam specified in Appendix XI to
this Decree;
b) b) A copy of the establishment license, business
registration certificate or other equivalent document of the foreign
enterprise;
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d) Curriculum vitae, copy of 9-digit or 12-digit ID
card or passport of the person expected to hold the position of head of the
representative office;
dd) The introduction of the foreign enterprise;
e) The approval of the insurance authority where
the foreign enterprise's head office is located that allows the foreign
enterprise to set up a representative office in Vietnam. If the home country's
regulations do not require written approval, a written certification from a
competent authority is required in accordance with the law of the country.
2. The documents in the application for license for
establishment of representative office in Vietnam must satisfy the requirements
of Article 15 of this Decree.
3. Procedures for issuance of license for establishment
of representative office in Vietnam shall comply with Article 16 of this
Decree.
4. The time limit for granting a license for
establishment of representative office in Vietnam shall comply with Article 70
of the Law on Insurance Business, The license for establishment of
representative office in Vietnam must comply with the form in Appendix XIV
issued together with this Decree.
Article 57. Reissuance of
license for establishment of representative office in Vietnam
1. The foreign enterprise shall apply for
re-issuance of a license for establishment of representative office in Vietnam
in case their license is lost, destroyed, damaged, or invalidated in any form.
2. An application for reissuance of a
representative office license includes: An application form for reissuance of a
license for establishment of representative office specified in Appendix XV to
this Decree.
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4. Within 14 days of receiving a complete and valid
application, the Ministry of Finance shall consider issuing a copy of the
license from the master register in accordance with law. If the application is
rejected, the Ministry of Finance shall provide an explanation in writing.
Article 58. Revisions to
license for establishment of representative office in Vietnam
1. The foreign enterprise shall apply for revisions
to their license for establishment of representative office in Vietnam in any
of the following cases:
a) Change of name, nationality, address of the
foreign enterprise;
b) Change of name of the representative office;
c) Change of operational activities of the
representative office;
d) Change of location of the representative
office's head office from one province or centrally affiliated city to another
province or centrally affiliated city.
2. Application for revisions to license for
establishment of representative office in Vietnam includes:
a) An application form for revisions to license for
establishment of representative office specified in Appendix XV to this Decree;
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c) A document issued by a competent authority as
prescribed in the charter of the foreign enterprise, clearly stating the
decision on change of the name or operational activities of the representative
office or change of location of the representative office’s head office.
3. An application for revisions to the license for
establishment of representative office includes one copy in Vietnamese and one
copy in English which meet the requirements in Clauses 2, 3, 4, Article 15 of
this Decree.
4. The foreign enterprise shall submit one set of
application in person or by post or online (if eligible) to the Ministry of
Finance.
5. Within 14 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised license according to
Appendix XVI hereto appended. If the application is rejected, the Ministry of
Finance shall provide an explanation in writing.
Article 59. Extension of
license for establishment of representative office in Vietnam
1. A foreign enterprise seeking to extend the
operation of a representative office in Vietnam must satisfy the following
requirements:
a) The representative office in Vietnam has not
been penalized for any administrative violations in the insurance business in
the 12 months preceding the submission of the application for extension of
operation.
b) The foreign enterprise is currently operating
legally at the time of application for extension of the representative office's
operation;
c) The foreign enterprise has cooperative relations
with agencies and organizations in the field of insurance business in Vietnam.
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a) An application form for extension of operation
of representative office specified in Appendix XIII to this Decree;
b) A copy of the establishment license, business
registration certificate or other equivalent document;
c) A copy of the financial statement audited by an
independent auditing organization of the foreign enterprise in the three fiscal
years preceding the year of submission of the application for extension;
d) Curriculum vitae, copy of 9-digit or 12-digit ID
card, or passport of the person expected to hold the position of head of the
representative office (if changed);
dd) Written report on cooperation activities of the
representative office in Vietnam or foreign enterprise with agencies or
organizations in the field of insurance business in Vietnam.
3. An application for extension of the license for
establishment of representative office includes one copy in Vietnamese and one
copy in English which meet the requirements in Clauses 2, 3, 4, Article 15 of
this Decree.
4. At least 60 days before the expiry date of the
license for establishment of representative office in Vietnam, a foreign
enterprise seeking to extend the operation their representative office in
Vietnam must submit one application in person, or by post, or online (if
eligible) to the Ministry of Finance.
5. Within 30 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised license according to
Appendix XVI hereto appended. If the application is rejected, the Ministry of
Finance shall provide an explanation in writing.
Article 60. Ceased operation
of representative office in Vietnam
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a) At the request of the foreign enterprise;
b) When the foreign enterprise ceases operation, is
dissolved, goes bankrupt or has its license revoked;
c) Their term of operation expires without
application for extension or without the approval of the Ministry of Finance
for extension.
2. An application for ceased operation of a
representative office includes:
a) An application form for ceased operation of
representative office specified in Appendix XIII to this Decree;
b) Documents proving that the representative office
has fulfilled their obligations to employees and other agencies, organizations,
and individuals in Vietnam;
c) The original license for establishment of
representative office in Vietnam and the decisions on extension of the license
(if any);
d) Originals of other relevant permits and
decisions during the operation of the representative office in Vietnam;
dd) A written authorization for an organization in
Vietnam to carry out administrative procedures (if any) with relevant state
regulatory agencies on behalf of the foreign enterprise.
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4. In case the representative office in Vietnam
ceases operation according to Point c, Clause 1 of this Article, the following
procedures shall be followed:
a) Within 30 days after the expiration of the time
limit specified at Point c, Clause 1 of this Article, the Ministry of Finance
shall send a document to the representative office and to the relevant state
regulatory agencies, which notifies the representative office's ceased
operation from the date of expiration of the license and request the foreign
enterprise to carry out the procedures for terminating the operation of the
representative office;
b) Within 20 days of receiving the document from
the Ministry of Finance, the foreign enterprise must submit one set of
application as specified in points a, c, d and dd clause 2 of this Article, in
person, by post, or online (if eligibility requirements are met, to the
Ministry of Finance;
c) Within 20 days of receiving a complete and valid
application, the Ministry of Finance shall issue a decision on termination of
operation of the representative office;
dd) Within 1 year from the date on which the
Ministry of Finance issues a written notice of ceased operation of the
representative office, the foreign enterprise or its authorized representative
must report to the Ministry of Finance on their fulfillment of obligations to
organizations and individuals in Vietnam together with supporting documents as
prescribed at Point b, Clause 2 of this Article;
dd) Within 5 working days from the date of expiry
of 1 year as prescribed in point d of this clause, if the obligations to
employees and other organizations and individuals in Vietnam have not been
fulfilled, the foreign enterprise or authorized representative must provide an
explanation for the Ministry of Finance in writing. Upon the expiry of the
above-mentioned 5 working days without receiving this explanation, the Ministry
of Finance will send a notice to the insurance authority where the foreign
enterprise's head office is located, stating that the foreign enterprise or
corporation has not fulfilled their obligations to organizations and
individuals in Vietnam yet;
e) Within 20 days of receiving the explanation enclosed
with the documents specified at Point d of this Clause, the Ministry of Finance
shall issue a document certifying that the foreign enterprise has completed the
procedures for shuttering the representative office in Viet Nam.
5. Upon ceased operation, the representative office
in Vietnam must fulfill all procedures and obligations as prescribed by law. In
case the representative office ceases operation as prescribed at Point c,
Clause 1 of this Article, the foreign enterprise shall perform, or authorize
the organization or individual in Vietnam to perform, the obligations that have
not yet been fulfilled with employees and other organizations and individuals
in Vietnam when the representative office is shuttered.
Article 61. Revocation of
license for establishment of representative office in Vietnam
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2. Within 30 days of signing the record of
violations, the Ministry of Finance shall issue a decision on revocation of the
license for establishment of representative office in Vietnam and send it to
the representative office in Vietnam and relevant agencies for management.
3. Within 30 days of receiving the decision of the
Ministry of Finance, the foreign enterprise must submit one set of application
to the Ministry of Finance, including the following:
a) Documents proving that the representative office
has fulfilled their obligations to employees and other agencies, organizations,
and individuals in Vietnam;
b) The original license for establishment of representative
office in Vietnam and the decisions on extension of the license (if any);
c) Originals of other relevant permits and
decisions during the operation of the representative office in Vietnam;
d) A written authorization for an organization in
Vietnam to carry out administrative procedures (if any) with relevant state
regulatory agencies on behalf of the foreign enterprise.
4. The foreign enterprise shall submit one set of
application specified in clause 3 of this Article, in person, by post, or online
(if eligible) to the Ministry of Finance. Within 20 days of receiving a
complete and valid application, the Ministry of Finance shall issue a decision
on termination of operation of the representative office.
5. Upon license revocation, the representative
office in Vietnam must fulfill all procedures and obligations as prescribed by
law.
Chapter III
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Section 1. INSURANCE AGENTS
Article 62. Eligibility
requirements for insurance agents
An insurance agent must satisfy the requirements
specified in Clause 2, Article 125 of the Law on Insurance Business, and the
following requirements:
1. Insurance agents being credit institutions and
foreign bank branches:
a) A specialized department must be established to
carry out insurance agent activities;
b) The head of the department specialized in
performing insurance agent activities must have at least 3 years of working
experience in finance, banking, or insurance, and have at least a bachelor’s
degree in insurance. If he/she fails to have at least a bachelor’s degree in
insurance, he/she must have at least a bachelor’s degree in other major and an
insurance certificate according to regulations of the Ministry of Finance;
c) Each branch of a credit institution that
conducts insurance agent activities must have at least 3 employees who are
trained and have insurance agent certificates suitable to the type of insurance
that the credit institution acts as an agent. Each transaction office of a
credit institution that conducts insurance agent activities must have at least
one employee who is trained and has an insurance agent certificate suitable to
the type of insurance that the credit institution acts as an agent;
d) Have an appropriate information technology
system which provides complete, accurate and up-to-date information related to
insurance policies through insurance agents;
dd) There is a process to supervise and control the
quality of the performance of insurance agent activities by the employees in
the agent. The quality control and supervision process must ensure that the
agent’s staff who directly perform agent activities strictly comply with the
principles of agent operation and the authorization details in the agent
contract and relevant laws; insurers and foreign branches in Vietnam are
enabled to inspect and supervise performance of the agent’s staff and their
violations.
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2. Insurance agents being other organizations:
a) The organization must have at least three
employees who directly perform insurance agent activities;
b) There is a process in place to supervise if
their employees comply with the principles of insurance agent activities in
accordance with the Law on Insurance Business.
3. An insurance agent must maintain their
compliance with the requirements for insurance agent operation throughout their
operation. In case one of the requirements is not satisfied, such organization
may not conduct insurance agent activities until all the requirements are
satisfied and must notify the insurer, or branch of foreign non-life insurer,
or mutual providing microinsurance products within 5 working days from the date
of their failure to meet the requirements for insurance agent activities. After
6 months from the date of notification, if such organization still fails to
satisfy the requirements for operating insurance agent as prescribed, the
insurer, or branch of foreign non-life insurer, or mutual providing
microinsurance products must terminate the insurance agent contract.
4. An organization which has engaged in insurance
agent activities must satisfy the requirements in Clauses 1 and 2 of this
Article within 1 year from the effective date of this Decree.
Section 2. INSURANCE BROKERS
Article 63. Financial
requirements to enable Establishment And Operation License to be issued to
insurance brokers
A capital contributor of an insurance broker must
satisfy the following requirements:
1. The contributor of at least 10% of charter capital
must have a profitable business operation for 3 consecutive years preceding the
year of application.
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3. If capital contributors are established and operate
under the Law on Credit Institutions, the Law on Insurance Business, and/or the
Law on Securities, they must maintain the financial safety conditions and
obtain permission by competent authorities to contribute capital in accordance
with law. In cases where relevant laws do not require written approval from a
competent agency, the capital contributor must have a written certification of
this.
4. Where a capital contributor established under
foreign law has a subsidiary that conducts insurance brokerage activities, such
capital contributor may not have incurred cumulative losses up to application
submission, and must have total assets of at least 2 million USD in the fiscal
year preceding the year of application.
5. The contributor of at least 10% of charter
capital must have an audited financial statement with an unqualified opinion
for 3 consecutive years preceding the year of application; the contributor of
less than 10% of charter capital must have an audited financial statement with
an unqualified opinion for the year preceding the year of application.
Article 64. Application for
issuance of Establishment and Operation License to insurance brokers
1. An application form for a License specified in
Appendix I to this Decree.
2. Draft of the company's charter as prescribed in
the Law on Enterprises.
3. Operational plan for the first 5 years suitable
to the type of business to which the license is applied, clearly stating the
operational activities to be performed and the business efficiency of the establishment
of the insurance broker.
4. Copies of 9-digit or 12-digit ID cards, or
passports; police (clearance) certificates or equivalent of foreigners as
prescribed by foreign law; curricula vitae, copies of degrees, certificates and
other documents proving the eligibility of the person expected to be appointed
as President of the Members' Council, Director or General Director, Legal
Representative.
5. List of shareholders, corporate contributors of
at least 10% of charter capital and the following attached documents:
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b) A copy of the company's charter;
c) A decision issued by the competent authority of
the capital contributor on capital contribution to establish the insurance
broker;
d) A written authorization, a copy of 9-digit or
12-digit ID card or passport of the authorized representative of the capital
contributor;
dd) A copy of the audited financial statement for
the three consecutive fiscal years preceding the year of application as
prescribed in clause 5 Article 63 of this Decree;
e) A document proving that this capital contributor
complies with point a, Clause 5, Article 133 of the Law on Insurance Business.
6. Profile of a corporate shareholder or
contributor of less than 10% of charter capital;
a) Documents specified at Points a, b, c, d, Clause
5 of this Article;
b) A copy of the audited financial statement for
the fiscal year preceding the year of application as prescribed in clause 5
Article 63 of this Decree.
7. Where a corporation established under foreign
law has a subsidiary that conducts insurance brokerage activities, they must
submit a copy of establishment decision or business registration certificate or
equivalent document of the subsidiary; a copy of the audited financial
statement for the fiscal year preceding the year of application as prescribed
in clause 5 Article 63 of this Decree.
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a) A copy of 9-digit or 12-digit ID card or
passport; police (clearance) certificate according to the form or equivalent
document of foreigners as prescribed by foreign law;
b) Bank's confirmation of the balance of Vietnamese
dong or freely convertible foreign currency deposited at the bank.
9. Certification of the bank licensed to operate in
Vietnam that the charter capital deposited in a blocked account opened at the
bank is not lower than the minimum charter capital specified in Article 81 of
this Decree. The certification must clearly state the capital contribution
amount of each shareholder/capital contributor, blocked amount, blockade
purpose, blockade duration and conditions for lifting blockade.
10. Minutes of meetings of the corporate/individual
in the matter of:
a) Agreement to contribute capital to establish an
insurance brokerage limited liability company or an insurance brokerage
joint-stock company, together with a list of shareholders, members and founding
shareholders and members;
b) Approval for the draft of the company's charter.
11. A document authorizing an individual or
organization to act on behalf of shareholders, capital contributors to carry
out the procedures for applying for a License.
12. In case a foreign organization established
under foreign law has directly performed insurance brokerage, it must obtain a
certification from the competent authority of their home country, stating that:
a) The foreign organization established under
foreign law is permitted to establish an insurance broker in Vietnam. If the
home country's regulations do not require a written approval, a written
certification from a competent authority is required in accordance with the law
of the country;
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c) The foreign organization established under
foreign law has not seriously violated their home country’s regulations on
insurance brokerage for 3 consecutive years preceding the year of application.
13. In case a foreign organization established
under foreign law has a subsidiary which has directly performed insurance
brokerage, it must obtain a certification from the competent authority of their
home country, stating that:
a) The foreign organization established under
foreign law is permitted to establish an insurance broker in Vietnam. If the
home country's regulations do not require a written approval, a written
certification from a competent authority is required in accordance with the law
of the country;
b) The foreign organization established under
foreign law has financial soundness and has fully met the management
requirements in their home country;
c) The foreign organization established under
foreign law has not seriously violated their home country’s regulations on
insurance brokerage for 3 consecutive years preceding the year of application.
14. The written commitment of the capital
contributors that they meet the eligibility requirements for issuance of the
License as prescribed in Article 63 of this Decree and Article 133 of the Law
on Insurance Business.
15. A certification issued by a competent authority
that Vietnamese capital contributors meet financial safety conditions and are
allowed to contribute capital to establish an insurer or reinsurer in
accordance with law. If relevant law does not require a written approval, the
capital contributor must have a written certification of this.
16. A document proving that the capital
contributors ensure that the difference between owner's equity and the required
capital is greater than or equal to their planned contribution as prescribed in
Clause 2, Article 63 of this Decree.
Article 65. Standards of
applications, documents, procedures for issuance of Establishment and Operation
Licenses to insurance brokers
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Article 66. Change of name,
location of head office of insurance broker
1. Application for change of name, location of head
office of insurance broker includes:
a) An application form for change of name or head
office, provided in Appendix III to this Decree;
b) A document of the competent authority, as
prescribed in the company's charter, on change of name, location of head
office;
c) Documentation showing the right to use the head
office (for the change of head office).
2. Within 7 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
Article 67. Increase in
charter capital
1. If an insurance broker seeks to increase their
charter capital, they must meet the following requirements:
a) The increase in charter capital shall be made in
Vietnamese Dong;
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2. Application for Ministry of Finance's approval
of principle to increase charter capital for insurance broker includes:
a) An application form for change of charter
capital specified in Appendix III to this Decree;
b) A competent authority's document as prescribed
in the company's charter on the increase in charter capital. This document must
specify the increased amount, method, and time for capital increase;
c) Plan for mobilization and use of charter
capital;
dd) List of shareholders or capital contributors
expected to own at least 10% of the charter capital of the insurance broker
after increasing capital; documents proving that these shareholders and capital
contributors satisfy the requirements specified in clauses 1, 2, 5 of Article
133 of the Law on Insurance Business and Article 63 of this Decree. This
provision does not apply to shareholders or capital contributors that owned at
least 10% of charter capital of the insurance broker before increasing the
capital, and does not apply to the case of increasing charter capital by the
method of securities public offering, securities offering of listed and public
joint-stock companies.
3. Within 20 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. In case of increase of charter capital by method
of public offering of shares, offering of shares of listed and public
joint-stock companies, after being approved by the Ministry of Finance, the
insurance broker shall issue shares in accordance with the Law on Securities.
5. Within 6 months from the date on which the
Ministry of Finance approves the application for an increase in charter
capital, the insurance broker shall complete the process of increasing capital
and submit one set of application to the Ministry of Finance, including:
a) A summary report on the results of the increase in
charter capital under the capital change plan approved by the Ministry of
Finance;
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c) Documents specified in point d clause 2 of this
Article in case of increasing charter capital by the method of securities
public offering, securities offering of listed and public joint-stock
companies.
6. Within 20 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised license to the
insurance broker according to Appendix V hereto appended. If the application is
rejected, the Ministry of Finance shall provide an explanation in writing.
7. Within 6 months from the date on which the
Ministry of Finance approves the application for an increase in charter capital
or allocated capital, if the insurance broker fails to perform such a plan,
they must report it to the Ministry of Finance for further actions.
Article 68. Decrease in
charter capital
1. If an insurance broker seeks to decrease their
charter capital, they must meet the following requirements:
a) The decreased charter capital still meets the
minimum capital requirements as specified in Article 81 of this Decree;
b) The owner’s equity determined when the latest
financial statement is prepared is not lower than the minimum charter capital
as prescribed by law.
2. Application for Ministry of Finance's approval
of principle to decrease charter capital for insurance broker includes:
a) An application form for decrease in charter
capital specified in Appendix III to this Decree;
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c) Plan for decrease in charter capital, which
proves that the insurance broker satisfies the requirements in clause 1 hereof;
d) Documents proving that the insurance broker
meets the requirements specified in Clause 1 of this Article.
3. Within 20 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. Within 6 months from the date on which the Ministry
of Finance approves the application for a decrease in charter capital, the
insurance broker shall complete the process of decreasing capital and submit
one set of application to the Ministry of Finance, including:
a) A summary report on the results of the decrease
in charter capital according to the plan approved by the Ministry of Finance,
clearly stating the results of financial indicators after completing the
process of decreasing capital;
b) Documents proving that the insurance broker has
completed payments of decreased capital to shareholders or capital
contributors.
5. Within 20 days of receiving a complete or valid
application, the Ministry of Finance shall issue a revised license to the
insurance broker according to Appendix V hereto appended. If the application is
rejected, the Ministry of Finance shall provide an explanation in writing.
6. Within 6 months from the date on which the
Ministry of Finance approves the application for a decrease in charter capital
or allocated capital, if the insurance broker fails to perform such a plan,
they must report it to the Ministry of Finance for further actions.
7. A single-member limited liability company is not
allowed to decrease their charter capital.
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1. Insurance brokers that seek to expand
operational activities, scope and duration of operation specified in the
License must satisfy the following requirements:
a) The head of the extended division must acquire
qualifications as specified in Article 80 of this Decree (for expansion of
operational activities and scope);
b) Do not incur administrative penalties against
regulations on insurance business in 12 months preceding the submission of the
application for expansion of operational activities and scope;
c) The owner’s equity determined when the latest
financial statement is prepared is not lower than the minimum charter capital
as prescribed in Article 81 of this Decree.
2. An insurance broker that seeks to curtail the
operational activities, scope and duration specified in its Establishment and
Operation License must ensure that it does not cause damage to its current
obligations to the State, interests of the insurance policyholders and other
related entities.
3. Application for change of operational
activities, scope, and duration of operation includes:
a) An application form for change of operational
activities, scope, and duration of operation as specified in Appendix III to
this Decree;
b) A document issued by a competent authority as
prescribed in the company's charter on changes of operational activities,
scope, and duration of operation;
c) Documents proving that the insurance broker
meets the requirements specified in Clause 1, Clause 2 of this Article.
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Article 70. Transfer of shares
or contributed capital that results in a shareholder or capital contributor
reaching or falling below the 10% ownership threshold
1. The purchase and transfer of shares or contributed
capital that results in a shareholder or capital contributor reaching or
falling below the 10% ownership threshold must meet the following requirements:
a) Do not cause damage to the legitimate rights and
interests of the policyholders, employees, and the State;
b) Comply with relevant laws;
c) Organizations and individuals that receive the
transfer of shares or contributed capital must satisfy the requirements
specified in Clauses 1, 2, 5, Article 133 of the Law on Insurance Business and
Article 63 of this Decree.
2. Application for transfer of shares or
contributed capital that results in a shareholder or capital contributor
reaching or falling below the 10% ownership threshold includes:
a) An application form provided in Appendix IV to
this Decree;
b) The written approval of the competent authority
as prescribed in the company's charter on the transfer of shares or contributed
capital;
c) List of shareholders (or members) contributing
capital, charter capital and charter capital structure of the insurance broker
formed after the transfer of shares or contributed capital;
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dd) Documents proving that the corporate/individual
capital contributor meets the requirements in Clause 1 of this Article.
3. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. Within 14 days of completing the transfer of
shares or contributed capital according to the approved plan, the insurance
broker must send to the Ministry of Finance: a set of report on completion of
transfer of shares, contributed capital, including:
a) A report on completion of transfer of shares,
contributed capital;
b) A report on full payment of tax liabilities
arising out of transfer of shares, contributed capital.
5. In case the approved capital transfer plan
cannot be implemented, the insurance broker must submit a report to the
Ministry of Finance outlining the action plan.
6. Within 14 days of receiving the report of the
insurance broker on the results of the transfer of the shares or contributed
capital, the Ministry of Finance shall issue a revised License to the insurance
broker provided in Appendix V issued with this Decree. If the application is
rejected, the Ministry of Finance shall provide an explanation in writing.
Article 71. Total division,
partial division, acquisition, consolidation, or conversion of business entity
1. Total division, partial division, acquisition,
consolidation, or conversion of an insurance broker must meet the following
requirements:
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b) Comply with relevant laws;
c) Organizations and individuals that plan to
contribute capital to the insurance broker after the total division, partial
division, acquisition, consolidation, or conversion must satisfy the
requirements specified in Clauses 1, 2, and 5 Article 133 of the Law on
Insurance Business and Article 63 of this Decree;
d) The new insurance broker established after total
division, partial division, acquisition, consolidation, or conversion must
satisfy the requirements specified in Article 133 of the Law on Insurance
Business.
2. Application for total division, partial
division, acquisition, consolidation, or conversion of business entity
includes:
a) An application form as specified in Appendix VI
issued with this Decree;
b) A document issued by a competent authority as
prescribed in the company's charter on the total division, partial division,
acquisition, consolidation, or conversion;
c) Report on how they carry out their total
division, partial division, acquisition, consolidation, or conversion, how they
deal with contracts which remain valid with customers, or with debt obligations,
obligations to the State, and commitments to employees;
d) List of shareholders (or capital contributors),
charter capital and charter capital structure of the insurance broker formed
after the total division, partial division, acquisition, consolidation, or
conversion;
dd) A copy from the master register or certified
copy of the principle contract on total division, partial division,
acquisition, consolidation, or conversion;
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g) A copy from the master register or certified
copy of the audited financial statement for the three consecutive years
preceding the year of application for consolidation or acquisition of the
acquired company/consolidating company and the insurance broker;
h) Documents proving that capital contributors,
administrators, and the insurance broker to be established after the total
division, partial division, acquisition, consolidation, or conversion meet the
requirements in Clause 1 of this Article.
3. Within 30 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
4. Within 14 days from the date of completion of
the total division, partial division, acquisition, consolidation, or conversion
according to the approved plan, the insurance broker must send a report on
results to the Ministry of Finance. In case the approved capital transfer plan
cannot be implemented, the insurance broker must submit a report to the
Ministry of Finance outlining the action plan.
5. Within 14 days from the date of completion of
the total division, partial division, acquisition, consolidation, or
conversion, the Ministry of Finance shall issue a revised license according to
the form specified in Appendix V issued with this Decree or the Establishment
and Operation License to the insurance broker, provided in Appendix II issued
together with this Decree. If the application is rejected, the Ministry of
Finance shall provide an explanation in writing.
Article 72. Requirements,
applications, procedures for dissolution of insurance brokers
1. Insurance brokers may only be dissolved when
they have paid all debts and other property obligations and have not been
during the dispute settlement process at Court or Arbitration. The relevant
manager and the insurance broker are held jointly and severally liable for the
debts of the insurance broker.
2. The payment of debts of the insurance broker
shall be made in the following order of priority:
a) Unpaid salaries, severance allowances, social
insurance premiums, health insurance premiums, unemployment insurance premiums
as per the law, and other benefits of employees under collective bargaining
agreements and signed employment contracts;
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c) Other debts.
3. Once all the debts are fully paid as prescribed
in Clause 2 of this Article, the insurance broker shall submit a dissolution
application to the Ministry of Finance, including:
a) An application form for dissolution signed by
the legal representative, which states the reason for dissolution as specified
in Appendix XIX issued herewith;
b) A decision of a competent authority as
prescribed in the company's charter;
c) Documents proving that the insurance broker has
paid all the debts, property obligations and has committed not to be in the
process of settling disputes in court or arbitration, including the following:
report on the payment of financial obligations to employees; report on payment
of liabilities to the State and other creditors; a notarized copy of the tax
authority's certification that tax obligations have been fulfilled; other
supporting documents (if any);
d) The establishment and operation license.
4. Members of the Board of Directors, members of
the Members' Council, the Director or General Director, and the legal
representative of the insurance broker shall be responsible for the
truthfulness and accuracy of the documentation.
5. Within 20 days of receiving a complete and valid
application, the Ministry of Finance shall issue a decision on dissolution of
the insurance broker.
6. In case the application for dissolution is
inaccurate or forged, the persons specified in Clause 4 of this Article shall
be held jointly and severally liable for payment of financial obligations to
employees and unpaid taxes, other unpaid debts, and be personally responsible
before law for the consequences arising within 5 years from the date of
submitting the application for dissolution to the Ministry of Finance.
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1. The insurance broker must obtain written
approval from the Ministry of Finance when appointing or removing the following
positions:
a) President of the Board of Directors, President
of the Members' Council;
b) General Director (Director).
2. Application for appointment or removal of
positions specified in clause 1 hereof includes the following:
a) An application form for appointment or removal
specified in Appendix III to this Decree;
b) A decision of a competent authority as
prescribed in the company's charter;
c) Police (clearance) certificate or equivalent document
of foreigners as prescribed by foreign law in accordance with point dd clause 2
Article 15 of this Decree; copies of 9-digit or 12-digit ID cards or passports
or other identity document; curricula vitae in accordance with point e clause 2
Article 15 of this Decree, copies of degrees, certificates and other documents
proving the eligibility of the person expected to be appointed as President of
Board of Directors (President of the Members' Council), General Director
(Director);<0}
d) Expected employment contract between the
insurance broker and the person expected to be appointed as the General
Director (Director);
dd) The written commitment of the person expected
to be appointed to work for the insurance broker after being approved by the
Ministry of Finance;
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3. Within 7 working days of receiving a complete
and valid application, the Ministry of Finance shall issue a written approval.
If the application is rejected, the Ministry of Finance shall provide an
explanation in writing.
Article 74. Opening of
branches, representative offices, and other forms of commercial presence of
insurance brokers in foreign countries
1. An insurance broker seeking to open a branch,
representative office, or another form of commercial presence in a foreign
country must satisfy the following requirements:
a) The owner’s equity determined when the latest
financial statement is prepared is not lower than the minimum charter capital
as prescribed in Article 81 of this Decree;
b) It has not been penalized for any administrative
violations in the insurance business in the 12 months preceding the submission
of the application for opening a branch or representative office;
c) It has Regulation on organization and operation
of branches, representative offices, and other forms of commercial presence;
d) Satisfy the legal regulations of the foreign
country where the enterprise opens a branch, representative office, or another
form of commercial presence.
2. An application for approval for opening of a
branch, representative office, or another form of commercial presence in a
foreign country includes:
a) An application form for opening of a branch,
representative office, or another form of commercial presence in a foreign
country, as specified in Appendix XVII issued with this Decree;
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c) Regulation on organization and operation of
branches, representative offices, and other forms of commercial presence;
d) Application for approval of the opening of a
branch, representative office, or another form of commercial presence in a
foreign country must comply with Points a, b, d and h Clause 2, Clause 3 and
Clause 4, Article 15 of this Decree.
3. Within 14 days of receiving a complete and valid
application, the Ministry of Finance shall issue a written approval for opening
of a branch, representative office, or another form of commercial presence in
Vietnam to the insurance broker. If the application is rejected, the Ministry
of Finance shall provide an explanation in writing.
4. After completing the opening of the branch,
representative office, or another form of commercial presence in a foreign
country, the insurance broker must notify the Ministry of Finance as prescribed
in Clause 1, Article 75 of this Decree.
Article 75. Application and
procedures for recording notice of opening, termination, or relocation of
branch or representative office in Vietnam
1. Notice of opening, termination, or relocation of
branch or representative office in Vietnam of an insurance broker includes:
a) Details in the notice of opening, termination,
or relocation of branch or representative office in Vietnam of an insurance
broker include name, address of the branch or representative office;
operational activities of the branch or representative office; information of
the branch director, the head of the representative office, information about
changes to the branch or representative office;
b) The competent authority’s approval for opening,
termination, relocation of the branch or representative in accordance with the
charter of the insurance broker;
c) Documentation showing the right to use the
location of the branch or representative office (if any).
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Article 76. Eligibility requirements
for manager of insurance broker
1. He/she has the right to manage an enterprise in
accordance with the Law on Enterprises.
2. He/she is not penalized for administrative
violations against regulations on insurance business; he/she is not dismissed
for his/her violations against internal processes for 3 consecutive years
before the time of appointment; he/she is not prosecuted by a competent
authority as prescribed by law when he/she is elected or appointed.
Article 77. Qualifications
required for members of Board of Directors, members of Member’s Council
1. General qualifications in Article 76 of this
Decree.
2. They obtain at least a bachelor’s degree.
3. President of the Board of Directors and President
of the Member’s Council must have at least 5 years of experience in the
insurance, finance, or banking industries; members of Board of Directors and
members of Member’s Council must have at least 3 years of experience in the
insurance, finance, or banking industries.
4. Do not concurrently act as a member of the Board
of Directors or a member of the Members' Council of another insurance broker in
Vietnam.
Article 78. Qualifications
required for the Director or General Director, legal representative
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2. They obtain at least a bachelor’s degree.
3. They obtain at an insurance certificate or
insurance brokerage certificate issued by a Vietnamese and foreign training
institution which is legally established. This provision does not apply to
those who have obtained a bachelor’s degree or higher in insurance.
4. They have at least 5 years’ experience in
insurance, finance, or banking, of which at least 3 years’ experience as the
manager or controller of an insurer or reinsurer, or the manager or controller
of a foreign branch in Vietnam, or the manager of insurance broker.
5. They have lived in Vietnam during his/her
tenure.
6. The Director or General Director must satisfy
the following incumbent or office-holding principles:
a) Do not concurrently work for other insurance
broker in Vietnam; do not act as a member of the Board of Directors or a member
of the Members' Council of another insurance broker in Vietnam;
b) Only concurrently hold the title of head of up
to one branch or representative office or professional division of the
insurance broker;
c) Do not concurrently work for other insurer or
foreign branch in Vietnam; do not act as a member of the Board of Directors or
a member of the Members' Council of another insurer or foreign branch in
Vietnam.
Article 79. Qualifications
required for Deputy Director or Deputy General Director, Chief Accountant
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2. They obtain at least a bachelor’s degree.
3. They have at least 3 years of experience in
insurance, finance, or banking.
4. They obtain at an insurance certificate or
insurance brokerage certificate issued by a Vietnamese and foreign training
institution which is legally established. This provision does not apply to
those who have obtained a bachelor’s degree or higher in insurance.
5. The Chief Accountant, apart from the
qualifications in clauses 1, 2 of this Article, must meet the qualifications
required for chief accountant in accounting law.
Article 80. Qualifications
required for the Head of professional division
1. General qualifications in Article 76 of this
Decree.
2. They obtain at least a bachelor’s degree.
3. They have at least 3 years of experience in
insurance, finance, or banking.
4. They obtain at an insurance certificate or
insurance brokerage certificate issued by a Vietnamese and foreign training
institution which is legally established. This provision does not apply to
those who have obtained a bachelor’s degree or higher in insurance.
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1. Minimum charter capital of an insurance broker:
a) Brokerage of original insurance or reinsurance:
VND 5 billion;
b) Brokerage of original insurance or reinsurance:
VND 10 billion.
2. During the course of operation, insurance
brokers must meet the owner’s equity requirement as follows:
a) As for insurance brokers licensed before January
1, 2023: Before January 1, 2028, the charter capital and owner’s equity must
not fall below the prescribed legal capital specified in Clause 6 Article 10 of
Decree No. 73/2016/ND-CP; from January 1, 2028, the charter capital and owner's
equity must not fall below the minimum charter capital as prescribed in Clause
1 of this Article;
b) As for insurance brokers that have been licensed
since January 1, 2023, the charter capital and owner's equity must not fall
below the minimum charter capital as prescribed in Clause 1 of this Article.
3. Every quarter, an insurance broker must
re-evaluate its equity. If the owner's equity does not meet the requirements of
Clause 2 of this Article, the insurance broker must apply for capital increase
within 3 months from the end of the quarter and complete the process of
increasing capital that complies with Clause 2 of this Article within 6 months
from the end of the quarter.
4. If insurance brokers which are established,
organized, and operating before the effective date of this Decree have a
charter capital lower than the minimum charter capital specified in clause 1 of
this Article, they must, before January 1, 2028, top up their charter capital
to the required minimum level as prescribed in clause 1 of this Article.
Article 82. Revenue of
insurance broker
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a) Commissions from original insurance brokerage,
reinsurance brokerage;
b) Service charges for insurance auxiliary
services;
c) Service charges for other activities related to
the insurance policy at the request of the insurance policyholder;
d) Revenue from financial activities: Revenue from
securities trading; collect interest on deposit, interest on loan amount;
property rentals; other revenues as prescribed by law.
dd) Other operating income: Revenue from sale and
liquidation of fixed assets; bad debts written off and now recovered; other
revenue as prescribed by law.
2. Principles of determining revenue of insurance
brokers:
a) The insurance broker shall record the insurance
brokerage commission in the revenue corresponding to the time of accounting the
premium revenue of the insurer, reinsurer, or foreign branch in Vietnam.
With regard to expenses recorded as decreases in
revenue such as reduction of insurance brokerage commissions, refund of
insurance brokerage commissions: they will be recorded as reduction in revenue
as soon as the transaction takes place, with evidence of consent of the
parties, regardless of whether money has been paid or not;
b) The insurance broker shall record the service
charges from the provision of auxiliary insurance services and the service fees
from other activities related to the insurance policy at the request of the
insurance policyholder into the revenue, upon completion of the provision of
the services or the partial completion of the provision of the services,
regardless of whether payment has been received or not;
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d) Other operating income: comply with general regulations
on enterprise accounting regime for other incomes.
Article 83. Expenses of
insurance broker
Expenses of an insurance broker are payables and
deductions in a period related to the operation of the insurance broker and
must have sufficient invoices and documents as prescribed by law, including:
1. Expenses of insurance brokerage:
a) Expenditures on original insurance brokerage and
reinsurance brokerage;
b) Expenditures on provision of insurance auxiliary
services;
c) Fees charged for other activities related to the
insurance policy at the request of the insurance policyholder;
d) Expenditures on professional liability
insurance;
dd) Other expenditures and deductions as prescribed
by law.
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a) Property rental costs;
b) Expenditures on bank fees and loan interest
payments;
c) Other expenditures and deductions as prescribed
by law.
3. Other operating expenses:
a) Expenditures on sale and liquidation of fixed
assets;
b) Expenditures on the recovery of bad debts which
have been written off and are now recovered;
c) Other expenditures and deductions as prescribed
by law.
Section
3. INSURANCE AUXILIARY SERVICES
Article 81. Qualifications
required for persons in charge of insurance auxiliary services in corporate
providers of insurance auxiliary services
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a) obtain at least a bachelor's degree in
insurance; or
b) obtain at least a bachelor’s degree in other
major and a certificate of insurance consultancy issued by a Vietnamese or
foreign insurance training institution, which is established and operate
legally, corresponding to the type of insurance for which the consultancy is
provided.
2. A person in charge of insurance underwriting
must meet any of the following requirements:
a) obtain at least a bachelor's degree in
insurance; or
b) obtain at least a bachelor’s degree in other
major and a certificate of insurance underwriting issued by a Vietnamese or
foreign insurance training institution, which is established and operate
legally, corresponding to the type of insurance for which the insurance
underwriting is provided.
3. A person in charge of actuarial services in an
insurer, reinsurer, or foreign branch in Vietnam must meet the qualifications
as prescribed in clauses 2, 3 Article 29 and clause 2 Article 30 of this
Decree.
4. A person in charge of claim assessment must meet
any of the following requirements:
a) obtain at least a college degree conformable
with the claim to be assessed;
b) obtain a certificate of claim assessment issued
by a Vietnamese or foreign insurance training institution, which is established
and operate legally, corresponding to the types of non-life insurance for which
the claim assessment is provided; or
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5. A person in charge of claim settlement support
must meet any of the following requirements:
a) obtain at least a college degree; or
b) obtain a certificate of claim settlement support
issued by a Vietnamese or foreign insurance training institution, which is
established and operate legally, corresponding to the type of insurance for
which the claim settlement support is provided.
Chapter IV
PROVISION AND USE OF
CROSS-BORDER INSURANCE SERVICES
Article 85. Providers and
users of cross-border insurance services and insurance brokerage
1. Providers of cross-border insurance services and
insurance brokerage (hereinafter referred to as cross-border insurance services)
are insurers, foreign insurance brokers which are headquartered in
countries/territories that have signed international treaties on trade with
Vietnam (hereinafter referred to as home countries), and these treaties include
an agreement on the provision of cross-border insurance services in Vietnam.
2. Users of cross-border insurance services are
foreign-invested business entities and foreigners working in Vietnam.
3. Reinsurance services, international marine
insurance, international aviation insurance, and international reinsurance
brokerage shall comply with applicable regulations and best practices.
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An insurer or foreign insurance broker that provides
cross-border insurance services in Vietnam must meet the following
requirements:
1. General requirements:
a) Obtain a license issued by their home country’s
competent authority for providing types of insurance expected to be provided in
Vietnam, and also proving that the insurer or foreign insurance broker has
legally operated for 10 years preceding the year of provision of cross-border
insurance services in Vietnam;
b) Obtain a license issued by their home country’s
competent authority for providing cross-border insurance services in Vietnam,
and also proving that the insurer or foreign insurance broker has not violated
any regulations on insurance business, insurance brokerage and other
regulations of foreign law for 3 years preceding the year of provision of
cross-border insurance services in Vietnam.
2. Eligibility requirements pertaining to finance:
a) The foreign insurer has total assets of at least
USD 2 billion; the foreign insurance broker has at least USD 100 million in the
fiscal year preceding the year of provision cross-border insurance services in
Vietnam;
b) The foreign insurer is rated at least “BBB” by
Standard & Poor's or Fitch, “B++” by A.M.Best, “Baal” by Moody's or
equivalent ratings of other ranking organization in the fiscal year preceding
the year of providing cross-border insurance services in Vietnam;
c) Their business has gained profits for 3 years
preceding the year of provision of cross-border insurance services in Vietnam.
3. Eligibility requirements pertaining to loss control:
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b) The foreign insurer must have a claim settlement
process which clearly states the procedure for handling the loss and the time
limit for giving the claim payout to the policyholder in Vietnam. In any case,
the foreign insurer or its authorized representative must be present at the
place of loss within forty-eight hours from the time of receipt of the loss
report. The time limit for claim settlement is specified in Article 31 of the
Law on Insurance Business;
c) Foreign insurance brokers must purchase
professional liability insurance for insurance brokerage for their provision of
cross-border insurance brokerage services in Vietnam.
Article 87. Eligibility
requirements for providing cross-border insurance auxiliary services
1. Foreign individuals providing cross-border
insurance consulting services in Vietnam must satisfy the requirements
specified in Clause 1, Article 143 of the Law on Insurance Business.
2. Foreign organizations providing cross-border
insurance auxiliary services in Vietnam must satisfy the requirements specified
in Clause 2, Article 143 of the Law on Insurance Business.
Article 88. Methods of
providing cross-border insurance services and cross-border insurance auxiliary
services in Vietnam
1. Foreign insurers, when providing cross-border
insurance services in Vietnam, must do so through an insurance broker which is
issued with an Establishment and Operation License in Vietnam.
2. Foreign insurance brokers providing cross-border
insurance services in Vietnam must act as brokers for insurers or branches of
foreign non-life insurers which are issued with an Establishment and Operation
License in Vietnam.
3. Foreign individuals and organizations are
allowed to provide cross-border auxiliary insurance services for insurers,
foreign branches, and insurance brokers in Vietnam.
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Article 89. Responsibilities
of providers of cross-border insurance services, and providers of cross-border
insurance auxiliary service
1. Give documents on eligibility for providing
cross-border insurance services as prescribed in Article 86 of this Decree to
insurers, foreign branches, and insurance brokers licensed in Vietnam that
engage in the process of providing cross-border insurance services as
prescribed in Article 88 of Decree.
Give documents on eligibility for providing
cross-border insurance auxiliary services as prescribed in Article 87 of this
Decree to insurers, foreign branches, and insurance brokers licensed in Vietnam
that use insurance auxiliary services, or domestic organizations that engage in
the process of providing cross-border insurance services.
2. Foreign individuals and organizations providing
cross-border insurance auxiliary services in Vietnam shall comply with
regulations on provision of auxiliary insurance services in Articles 141 and
142 of the Law on Insurance Business.
3. Within 120 days from the end of the fiscal year,
foreign insurers and foreign insurance brokers providing cross-border insurance
services shall send to the Ministry of Finance their financial statement of the
previous year, certified by an independent auditing organization, and a written
statement from their home country’s competent authority on their compliance
with of home country’s enterprise law.
4. Foreign insurers and insurance brokers providing
cross-border insurance services; foreign individuals and organizations
providing cross-border insurance auxiliary services shall pay taxes and other
financial liabilities related to the provision of cross-border insurance services,
cross-border insurance auxiliary services in Vietnam in accordance with tax
laws.
Article 90. Responsibilities
of entities related to the provision of cross-border insurance service and
cross-border insurance auxiliary services
Insurers, foreign branches, and insurance brokers
licensed in Vietnam and providers of insurance auxiliary services that provide
cross-border insurance services as prescribed in Article 88 of Decree shall:
1. Keep documents proving that the provider of
cross-border insurance services in Vietnam with which they jointly provide
insurance services satisfies the requirements specified in Article 86 of this
Decree; keep documents proving that foreign individuals or organizations
providing cross-border insurance auxiliary services in Vietnam satisfy the
requirements specified in Article 87 of this Decree and provide these documents
to competent authorities upon request.
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3. Use or provide cross-border insurance auxiliary
services together with foreign individuals or organizations that satisfy the
requirements specified in Article 86 of this Decree.
Chapter V
COOPERATION IN
MANAGEMENT, SUPERVISION, AND INSPECTION OF FOREIGN BRANCHES IN VIETNAM
Article 91. Mechanism for
coordination in management and supervision of foreign branches in Vietnam
1. The Ministry of Finance shall coordinate with
foreign insurance authority through sharing information on management and supervision
of foreign branches in Vietnam in order to protect the legitimate rights and
interests of parties in insurance business and ensure the healthy and
sustainable development of Vietnam's insurance market.
2. Information sharing with foreign insurance authorities
shall be carried out on the basis of written requests, on the case to case
basis, or through a communication cooperation mechanism under international
agreements on cooperation and information sharing with foreign insurance
authorities in the home country where the foreign non-life insurer, foreign
reinsurer with foreign branch in Vietnam is headquartered.
3. The content and scope of information shared
between the Ministry of Finance and the foreign insurance authority shall
comply with the following provisions:
a) Based on the requirements of management and
supervision on a case-by-case basis, the Ministry of Finance shall clearly
determine the need to request the foreign insurance authority to provide
information related to professional operations, financial situation, corporate
governance, risk management and the observance of the law on insurance business
by the foreign non-life insurer, or foreign reinsurer with foreign branch in
Vietnam;
b) In case of receiving a request to share
information from a foreign insurance authority, the Ministry of Finance shall
assess and clearly determine the extent and scope of information that can be
shared with each individual request, providing that the sharing ensures state
management objectives, complies with the law on protection of state secrets,
protection of private life, personal secrets, family secrets and business
secrets;
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4. The signing of an international agreement by a
competent Vietnamese authority on cooperation and information sharing with
foreign insurance authorities can be done bilaterally or multilaterally under
regional and international cooperation frameworks of the International
Association of Insurance Supervisors (IAIS), in compliance with the Law of
International Agreements.
5. Contents of international agreements on
cooperation and information sharing with foreign insurance authorities must
contain the following:
a) Principles and scope of cooperation and
information sharing;
b) Method of requesting information sharing;
c) Procedures for settlement of requests for
information sharing of the parties to the agreement;
d) Providing information in some exceptional cases,
including cases where foreign non-life insurers, foreign reinsurers, or foreign
branches in Vietnam of these insurers/reinsurers do not meet the requirement
pertaining to capital adequacy ratio; the case of a fiscal crisis;
dd) Regulations on information confidentiality and
regulations on consultation and periodic review of agreement contents.
Article 92. Inspection of
foreign branches in Vietnam
The inspection of insurance business of foreign
branches in Vietnam shall comply with the following:
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2. The foreign insurance authority where the
enterprise's head office is located shall inspect the operation of the foreign
branch in Vietnam as follows:
a) Before conducting the inspection, the foreign
insurance authority where the enterprise is headquartered must notify the
inspection plan to the Ministry of Finance;
b) After the inspection is completed, the foreign
insurance authority where the enterprise is headquartered must provide
inspection results for the Ministry of Finance.
Chapter VI
THE FUND FOR THE
PROTECTION OF THE INSURED
Article 93. Principles of
management and use of the Fund for the protection of the Insured
1. The Fund for the protection of the Insured shall
be managed and decided by the Ministry of Finance in a safe, efficient manner
and with proper purposes.
2. The Fund for the protection of the Insured is
managed and used separately for each type of insurance: life insurance,
non-life insurance and health insurance.
3. Investment activities of the Fund for the protection
of the Insured are carried out as follows:
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Within 3 years from the effective date of the Law
on Insurance Business, the entire balance of the Fund for the Protection of the
Insured can be invested in Vietnam to buy Government bonds;
b) The Ministry of Finance may invest the Fund's
idle money itself or by entrusting an organization to do so. In the case of
investment entrustment, the entrusted organization must be licensed by a
competent authority to conduct investment entrustment in accordance with the
investment entrustment activity.
4. Where it is necessary to use the Fund for
Protection of the Insured as prescribed in Clause 5 of this Article, the
Ministry of Finance shall set up a Council to consider making payouts. The
Council shall have composition and duties as follows:
a) The Council is composed of representatives of
the Ministry of Finance, representatives of the Association of Vietnamese
Insurers, representatives of insurers receiving the transfer the portfolios of
insurance policies (in a case that the Ministry of Finance assigns the insurer
to receive the transfer the portfolios of insurance policies from a bankrupt or
insolvent insurer);
b) Duties of the Council: examine the insurance
claims; develop a plan to use the Fund and submit it to the Ministry of Finance
for approval (including a plan to pay out insurance policies of the bankrupt or
insolvent insurer, and a plan to use the Fund's assets to carry out perform
assigned tasks).
The Council may outsource the performance of
assigned tasks.
c) The Council is allowed to use the seal of the
authority tasked to manage the Fund for the Protection of the Insured when
performing its duties.
5. The Fund for the Protection of the Insured is
used in the following cases:
a) In case an insurer or a branch of foreign
non-life insurer becomes insolvent and has taken measures to restore solvency
but still cannot rectify it, the insurer or branch may use the Fund for
Protection of the Insured under the decision of the Ministry of Finance on
termination of measures to restore solvency;
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c) In case the insurer receives the transfer the
portfolios of insurance policies from the bankrupt or insolvent insurers, The
Fund for the Protection of the Insured will be used to cover the shortfall
between the insurance assets and liabilities, as well as shortages of
corresponding technical reserves.
6. The Fund for the Protection of the Insured will
be used to make insurance payouts, the cash surrender value; pay insurance
compensation; refund the premiums as prescribed in the insurance policy at the
request of an insolvent insurer, or a branch of foreign non-life insurer, or a
bankrupt insurer and make a lump sum payment for each claim for insurance
payout, refund of cash surrender value, insurance compensation, or premium
refund; compensate for the shortfall between insurance assets and liabilities,
as well as the shortages of corresponding technical reserves for the bankrupt
or insolvent insurers.
7. As for insurers, branches of foreign non-life
insurers owed to the Fund for Protection of the Insured:
a) Insurers, branches of foreign non-life insurers
shall bear the overdue payment interest of 0.03% per day to the Fund based on
their overdue payment amount. The overdue payment time shall be counted from
the effective date of this Decree to the day before the overdue payment amount
is remitted into the state budget.
b) Insurers, branches of foreign non-life insurers
must complete the payment of the outstanding amount to the Fund and the overdue
payment interest at Point a of this Clause before January 1, 2024. After the
mentioned time limit, if an insurer or a branch of foreign non-life insurer has
not yet paid the outstanding amount owed and the amount of overdue payment to
the Fund, the Ministry of Finance shall request the credit institution that
holds an account of the insurer or branch to freeze their account and collect
the arrears and overdue payment interest to the Fund.
Article 94. Expenditures of
the Fund for the Protection of the Insured
1. The Fund for the Protection of the Insured may
have the following expenditures:
a) Insurance payout, refund of cash surrender
value, insurance compensation, or premium refund as prescribed in the insurance
policy upon request of the insolvent insurer or branch of foreign non-life
insurer under the decision of the Ministry of Finance on termination of
measures to restore solvency, or upon request of the bankrupt insurer under the
judge’s decision on declaration of bankruptcy;
b) The shortfall between the insurance assets and
liabilities, as well as shortages of corresponding technical reserves for the
insurer that is assigned to receive the transfer the portfolios of insurance
policies from the bankrupt or insolvent insurers;
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d) Expenses for performing the tasks of the Council
decided by the Ministry of Finance in the plan for using the Fund's assets to
perform the assigned tasks as prescribed at Point b, Clause 4, Article 93 of
this Decree.
2. The payment from the Fund for Protection of the
Insured under Points a and b, Clause 1 of this Article shall be made according
to the following principles:
a) The Fund only pays for the original insurance
policy and pays once for each claim for insurance payout, refund of cash
surrender value, insurance compensation, or premium refund;
b) In case the insurance policies are transferred
from the insolvent insurer or branch of foreign non-life insurer, or the
bankrupt insurer to another insurer or branch, the amount paid by the Fund
according to the limit specified in Article 95 of this Decree shall be
transferred directly to receiving insurer or branch;
c) In case the insurer or branch of foreign
non-life insurer becomes insolvent, the Fund shall only pay the difference
between the amount of money the insurer, branch of non-life insurer has to pay
under the insurance policy and the amount the insured receives from the insurer
or branch of the foreign non-life insurer;
d) In case an insurer goes bankrupt, the Fund will
only pay the difference between the amount the insurer has to pay under the
insurance policy and the amount the insured receives in accordance with the law
on bankruptcy;
dd) In case the insured is obliged to repay the
debt of the insurer or branch of foreign non-life insurer as agreed in the
insurance policy and regulations of law, the Fund shall only pay the difference
between the amount of money the insured receives according to the limit
specified in Article 95 of this Decree and the amount owed by the insured to
the insurer or branch of foreign non-life insurer.
Article 95. Payment limit of
the Fund for the Protection of the Insured
1. As for life insurance policies, the Fund shall
pay up to 90% of the extent of liability of the life insurer, but not more than
200 million VND/insured/policy. The extent of liability of the life insurer
corresponding to each case is prescribed as follows:
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b) As for policies that have savings feature, cash
surrender value, and remain valid, the extent of liability of the insurer shall
correspond to the cash surrender value of the policy at the time when the
competent authority declares the insurer insolvent or bankrupt;
c) As for policies that only have protection
feature, have no cash surrender value, and remain valid, the extent of
liability of the insurer shall correspond to the premium paid for the remaining
period of the insurance policy;
d) As for investment-linked insurance policies that
remain valid, the extent of liability of the insurer shall correspond to the
value of the customer’s account at the time when the competent authority
declares the insurer insolvent or bankrupt;
dd) If a life insurance policy has multiple insured
persons, the maximum payment limit of the Fund specified at Points a, b, c and
d, Clause 1 of this Article shall apply to each insured person, unless
otherwise agreed between the insured and the insurer in the insurance policy.
2. As for health insurance policies, the Fund shall
pay up to 90% of the extent of liability of the insurer or branch of foreign
non-life insurer, but not more than 200 million VND/insured/policy. The extent
of liability of an insurer or a branch of foreign non-life insurer
corresponding to each case is specified as follows:
a) As for policies where the insured event has
occurred but the insurance benefits have not been paid, the extent of liability
of the insurer or branch of foreign non-life insurer is the insurance benefits
to be enjoyed as agreed in the insurance policy;
b) As for valid insurance policies, the extent of
liability of the insurer or branch of foreign non-life insurer is in proportion
to the premium paid for the remaining period of the insurance policy;
c) If a health insurance policy has multiple
insured persons, the maximum payment limit of the Fund shall apply to each
insured person, unless otherwise agreed between the insured and the
insurer/branch in the insurance policy.
3. With respect to non-life insurance policies:
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b) As for insurance policies in other types of
insurance, the Fund shall pay up to 80% of the extent of liability of the
insurer or branch of foreign non-life insurer, but not more than 100 million
VND/insured/policy;
c) The extent of liability for non-life insurance
policies of non-life insurers and branches of foreign non-life insurers
includes insurance benefits to be enjoyed as agreed upon in the insurance
policy and premium paid in proportion to the remaining period of the insurance
policy.
Article 96. Procedures for
payment from the Fund for the Protection of the Insured
1. Bankrupt or insolvent insurers and branches of
foreign non-life insurers must submit to the Ministry of Finance one set of
application, including the following documents:
a) An application for use of the Fund specified in
Appendix XVIII to this Decree;
b) A written certification from a competent
authority that the plan on division of the value of the insurer's assets has
been completed (in case the insurer goes bankrupt);
a) List of insured persons, claims for insurance
payout, refund of cash surrender value, insurance compensation, or premium
refund as prescribed in the insurance policy that the insolvent insurer or
branch of foreign non-life insurer cannot pay; compensation from the third
person under the decision of the Ministry of Finance on termination of measures
to restore solvency, or at the time the bankrupt insurer’s asset value division
plan has been completed;
d) Statistical documents on technical reserves and
assets corresponding to the technical reserves of the portfolios of insurance
policies expected to be transferred of the insolvent or bankrupt insurer or
branch of foreign non-life insurer, the shortfall between the insurance assets
and liabilities, as well as the lack of corresponding technical reserves for
the designated insurer to receive the portfolio of insurance policies from the
bankrupt or insolvent insurer.
2. Within 14 days of receiving the application of
the insurer or branch of foreign non-life insurer, the Ministry of Finance
shall set up a Council as prescribed in Clause 4, Article 93 of this Decree.
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a) Check the completeness and validity of the
application for insurance payout and refund of cash surrender value; refund of
insurance premiums filed by the insurer or branch of foreign non-life insurer
in order to accurately determine the amount; check documentation on technical
reserves and corresponding assets in case of designation to receive the
portfolio of insurance policies;
b) Develop a plan for insurance payout, refund of
cash surrender value; payment of compensation.
4. Within 5 working days from the date the Ministry
of Finance approves the insurance payout plan, the Council shall make public
the payment to the insured in daily newspapers (at least in a central newspaper
or a local newspaper where the head office, branches and transaction offices of
the insurer or branch of foreign non-life insurer are located in Vietnamese in
3 consecutive issues, as well as post up the list of beneficiaries at these
head office, branches and transaction offices, and on the websites of the
Ministry of Finance, the insurer or branch of foreign non-life insurer. The
notice must clearly state the location, time, and method of payment of the
Fund.
5. The Council shall make insurance payouts from
the Fund for Protection of the Insured in accordance with the insurance payout
plan approved by the Ministry of Finance.
6. Recipients of insurance payouts, cash surrender
value, and compensation; refund of insurance premiums must meet the following
conditions:
a) They are named in the list of recipients, with
supporting documents enclosed, approved by the Ministry of Finance;
b) There are documents proving their lawful
interests in the Fund's payments, including: citizen's identity card, personal
identity card, passport, or other lawful personal identification documents; an
insurance policy; power of attorney to receive money (if any).
Chapter VII
INVESTMENT-LINKED
INSURANCE AND RETIREMENT INSURANCE
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Article 97. General principles
1. During the course of operation of
investment-linked insurance and retirement insurance, the insurer must ensure
compliance with the following regulations:
a) Maintain a solvency margin higher than the
minimum solvency margin: VND 200 billion (for investment-linked
insurance); VND 300 billion (for retirement insurance);
b) Operate an information technology system that
meets the requirements of Clause 2 of this Article.
2. The information technology system of an insurer
providing investment-linked insurance and retirement insurance must:
a) Monitor and manage in detail each transaction of
the investment-linked insurance policy (for the investment-linked insurance )
and each retirement insurance account (for the retirement insurance);
b) Ensure up-to-date and accurate data on insurance
policies between divisions in the enterprise; ensure the setting aside of
technical reserves and recognition of revenue and expenses;
c) To roll out the unit-linked insurance, the
information technology system must assist in checking information on account
value and number of units of each unit-linked fund; compare the premium pending
for allocation with the premium paid by the customer by the end of the fiscal
year and the end of the policy year; track the details of the sale and purchase
of units of the unit-linked insurance policy.
3. An insurer that rolls out investment-linked
insurance and retirement insurance must ensure that the information on their
operation of universal life-linked fund, voluntary retirement fund and
unit-linked funds is updated transparently, clearly, and regularly updated on
their website, at least containing:
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b) Selling price, purchase price of units of the
unit-linked fund (hereinafter referred to as fund units); net asset value per
unit of the unit-linked fund on the working day immediately following the
valuation date (in case the insurer rolls out the unit-linked insurance
product).
The insurer must ensure that information on the
selling prices and purchase prices of units are kept and can be looked up on
their website within 3 years.
4. The insurer must set up calculation tools and
instructions so that customers can build their own insurance plans according to
each insurance product provided on their website. The calculation tool must
meet the following minimum requirements:
a) As for universal life insurance products:
Customers can choose the basic insurance premium, the extra premium (if
any) with at least 2 illustrated investment interest rates (including the
guaranteed interest rate and the assumed interest rate selected by the
policyholder), the expected premium payment term to assess the account value
during the insurance policy term or for a minimum period of 20 years;
b) As for unit-linked insurance products:
Customers may choose the basic premium rate, extra premium (if any),
expected premium payment term, expected interest rate, expected unit-link fund
to evaluate the value of the account for a maximum period of 20 years;
c) As for retirement insurance products:
Customers may build an individual's retirement plan through the selection
of input factors such as the illustrated investment interest rate, expected
retirement benefits in the future, the expected premium payment period, the
expected period of receiving periodic retirement benefits;
d) The expected interest rate used in the
calculation tool does not exceed the maximum interest rate used in the sales
materials of the respective investment-linked insurance product or retirement
insurance product;
dd) The data illustrated in the calculation tool
must clearly show the following minimum data: benefits of the insurance
policy; fees charged to customers and premiums for each policy year.
Enterprises must ensure compliance with this Clause
within 1 year from the effective date of this Decree.
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1. Premiums of investment-linked insurance
policies, retirement insurance policies include:
a) Basic insurance premium as prescribed in Clause
2 of this Article;
b) Additional insurance premiums as prescribed in
Clause 3 of this Article.
2. Basic premium:
a) Basic premium is the premium determined based on
the sum insured chosen by the customer and specified in the investment-linked
insurance policy, the retirement insurance policy. The basic premium is paid periodically
or once as agreed in the insurance policy;
b) The compulsory payment period for an
investment-linked insurance policy with periodic basic premiums shall not
exceed 4 years. During the compulsory payment period, the insurer must ensure
that the investment-linked insurance policy is not lapsed if the customer has
fully paid the basic premium and there is no withdrawal from the account.
3. Extra premium:
a) In addition to the basic insurance premium, the
policyholder may pay an extra premium to invest in the universal life fund (for
universal life insurance product) or to purchase units (for unit-linked
insurance product) or to invest in a voluntary retirement fund (for retirement
insurance product);
b) As for investment-linked insurance policies, in
each policy year, the total extra premiums paid must not exceed 5 times the
annual basic premium rate of the current policy year (for regular premium
policy) or does not exceed the basic premium (for single premium policy).
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1. Fees charged to the policyholder include:
a) Initial fee: used to cover expenses related to
the use of insurance policies, capital costs of the insurer. The initial fee is
deducted as a percentage (%) of the premium when the policyholder pays the
premium. The premium after deducting the initial fee is the part that is
invested and allocated to the investment-linked fund (for investment-linked
insurance policy), voluntary retirement fund (for retirement insurance policy)
within 30 days from the date the insurer receives the premium;
b) Policy management fee: used to cover costs
related to maintaining the insurance policy and providing information related
to the insurance policy for the insurance buyer. Policy management fee is
deducted from the account value of the policyholder;
c) Risk fee: used to pay death and disability
benefits as committed in the insurance policy. Risk fee is deducted from the
account value of the policyholder;
d) Fund management fee: used to pay for investment,
asset valuation, fund supervision and management. The fund management fee is
determined as a percentage (%) of the net asset value of the investment-linked
fund (for investment-linked insurance policy), the voluntary retirement fund
(for the retirement insurance policy). Fund management fee is deducted before
determining investment returns of investment-linked fund (for investment-linked
insurance policy), voluntary retirement fund (for retirement insurance policy);
dd) Early termination fee (applicable to investment-linked
insurance product): used to cover reasonable expenses related to the
policyholder's termination of the insurance policy early. Early termination fee
is deducted from the account value of the policyholder;
e) Unit-linked fund conversion fee (applicable to
unit-linked insurance product): is the fee charged to the policyholder when
converting investment assets between unit-linked funds;
g) Retirement insurance account transfer fee
(applicable to retirement insurance product): is a fee that a policyholder must
pay to the current insurer when transferring their retirement insurance account
to a new insurer.
2. The insurer is responsible for calculating fees
charged to the policyholder in an accurate, fair, and reasonable manner, in
accordance with the method and basis of charging fees for products registered
with the Ministry of Finance.
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Article 100. Fund management
companies
1. An insurer that rolls out universal life
insurance products, retirement insurance products is entitled to manage and
invest assets of the universal life fund, voluntary retirement fund on its own
initiative, or entrust a fund management company to invest assets of the
universal life fund, the voluntary retirement fund, or engage a fund management
company to manage the portfolio of the assets of the universal life fund, the
voluntary retirement fund.
2. An insurer that rolls out unit-linked insurance
products shall entrust a fund management company that has experience in
managing member funds or open-ended funds to invest in assets from unit-linked
funds.
3. Entrusted assets are registered as owned by the
insurer and deposited in the depository account of the insurer. The fund
management company must separately manage investment assets from the
investment-linked fund, the voluntary retirement fund of the insurer from other
funds of the insurer and other customers. The fund management company may not
use the assets of the investment-linked fund or voluntary retirement fund to
perform any transaction or purpose not specified in the entrustment contract of
the insurer.
4. When acting as a trustee to invest assets from
unit-linked funds, the fund management company shall, at least weekly, or more
frequently as agreed in the entrustment contract and before the next valuation
date, provide information and value of investment assets for the insurer. The
fund management company shall coordinate with the custodian bank and insurer to
evaluate the net asset value of the unit-linked fund and the net asset value
per fund unit on a periodic basis, and report on the investment portfolio,
valuation, and performance of the unit-linked fund.
The insurer shall compare the investments of the
fund management company and the depository account at the bank. The insurer
must ensure the consistency of data specified at points a and b of this clause
on the valuation date:
a) The total value of the insurance premium
allocated to the unit-linked fund (the number of fund units of the policyholder
on the valuation date multiplied by the buying price of the fund unit) and the
value of the owner's contribution in the unit-linked fund (the number of fund
units of the owner on the valuation date multiplied by buying price of the fund
units);
b) Net asset value of the unit-linked fund.
5. When acting as a trustee or managing the
portfolio of assets of the voluntary retirement fund, the fund management
company must have at least 3 employees with at least 3 years of experience in
managing retirement funds or insurance policyholder fund or investment
portfolio management experience with an average investment term of more than 5
years. These employees must have a fund management practice certificate issued
by the State Securities Commission or be a member of the Chartered Financial
Analysts (CFA) or obtain a bachelor’s degree, master’s degree, or doctorate
degree in finance or investment.
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Section 2. INVESTMENT-LINKED INSURANCE
Subsection 1. CHARACTERISTICS AND BENEFITS OF INVESTMENT-LINKED
INSURANCE
Article 101. Characteristics
of investment-linked insurance
1. Investment-linked insurance includes universal
life insurance and unit-linked insurance.
2. Insurance products in the investment-linked
insurance have the following characteristics:
a) Benefits of an investment-linked insurance
policy are separated between death and disability benefits and investment
benefits. A policyholder cannot choose to participate in the investment
benefits of an investment-linked insurance policy without also participating in
the death and disability benefits;
b) The premium structure is separated between the
investment fee and the initial fee as prescribed at Point a, Clause 1, Article
99 of this Decree;
c) The policyholder is entitled to all investment
returns from the investment fee after deducting the fees specified at Points b,
c and d, Clause 1, Article 99 of this Decree;
d) The policyholder has the flexibility to
determine the premium and sum insured in accordance with the terms of the
insurance policy.
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Article 102. Benefits of
investment-linked insurance policies
1. Benefits of an investment-linked insurance
policy include:
a) Death and disability benefits specified in
Clause 2 of this Article;
b) Investment benefits specified in Clause 3 of
this Article;
c) Other bonus benefits (if any) to increase the
account value in the investment-linked insurance policy.
2. Death and disability benefits:
a) Death and disability benefits include death benefits
and total and permanent disability benefits;
b) Death and disability benefits must meet the
minimum level as follows:
As for single premium policy: VND 50,000,000 or
125% of single premium, whichever is greater;
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The insurer can provide death benefits with the sum
insured lower than the minimum specified above for the insured from 60 years of
age or older, but not less than VND 50,000,000.
3. Investment benefits: is the entire
investment return from the policyholder's investment fee after deducting the
fund management fee as agreed in the insurance policy.
4. Within 2 years from the effective date of this
Decree, the insurer may continue to provide benefits of investment-linked
insurance policies as prescribed in the rules and terms of investment-linked
insurance products which have been approved by the Ministry of Finance before
the effective date of this Decree.
Subsection 2. UNIVERSAL LIFE INSURANCE
Article 103. Name and design
of universal life insurance products
1. The name of the universal life insurance product
must be consistent with the nature of the insurance product and contain the
phrase “Sản phẩm bảo hiểm liên kết chung” (Universal life insurance product).
2. The account value of the universal life
insurance policy is formed from the fee that is invested in the universal life
fund and other benefits as agreed in the insurance policy.
3. The insurer must commit the minimum investment
interest rate in the universal life insurance policy. In case the investment
interest rate of the universal life fund is lower than the committed minimum
interest rate, the insurer shall use the assets of the owner's fund to cover
the difference between the actual interest rate earned on the investment, of
each universal life account, and the minimum interest rate.
4. The cash surrender value of a universal life
policy is the account value of that policy on the policy termination date minus
the early termination fee.
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1. An insurer must establish a universal life fund
for all universal life insurance policies, ensuring that the assets formed from
the universal life fund are separated from the owner’s fund and other
policyholder funds.
2. The universal life fund was established before
the first universal life insurance policy was signed and has a minimum amount
of not less than VND 50 billion.
3. An insurer is entitled to an investment return corresponding
to the amount contributed to the establishment of the universal life fund at
the announced interest rate applicable to universal life insurance
policyholders. The insurer may be refunded a part or the whole of their
contributed amount if it still ensures that the total value of the universal
life fund is not lower than VND 50 billion.
4. The policyholder is entitled to investment
returns corresponding to the value of his/her account at the universal life
fund in each fiscal year and not lower than the minimum committed interest rate
specified in the insurance policy.
5. Universal life fund shall be managed and used
for investment in accordance with the financial regime applicable to insurers.
Subsection 3. UNIT-LINKED INSURANCE
Article 105. Name and design
of unit-linked insurance products
1. The name of the unit-linked insurance product
must be consistent with the nature of the insurance product and contain the
phrase “Sản phẩm bảo hiểm liên kết đơn vị” (Unit-linked insurance product).
2. The policyholder may invest fees in the
unit-linked fund established by the insurer, enjoy all investment returns and
bear all investment risks from the chosen unit-linked fund.
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4. The cash surrender value of the unit-linked
insurance policy is equal to the account value of the unit-linked fund on the
valuation date after the date on which the policyholder requests to terminate
the policy minus the early termination fee.
5. As for a unit-linked insurance policy with
single premium plan, the policyholder’s premium is only used to buy fund units
with an investment proportion of not less than 60% of value of their total
assets in the portfolio of bank deposits and other fixed-income securities.
Article 106. Establishment of
a unit-linked fund
1. The insurer must ensure at least two unit-linked
funds for each unit-linked insurance product. Each unit-linked fund must have
separate investment policy, investment objectives and investment limits, which
enables policyholders to tell the difference between unit-linked funds rolled
out by the insurer.
2. The name of each unit-linked fund must be clear
and consistent with their investment policies and objectives.
3. Before the first unit-linked insurance policy is
signed, the insurer must use part of the owner's fund to form the unit-linked
fund's assets in accordance with the investment policy, investment objectives,
and investment limits of each unit-linked fund, and must ensure that the value
of each unit-linked fund is not less than VND 50 billion.
4. If an insurer adds a new unit-linked fund that
is managed directly by the fund management company, the enterprise must ensure
that the value of each unit-linked fund is not less than VND 50 billion.
5. The insurer is entitled to investment returns
corresponding to their amount contributed to the unit-linked fund. The
insurer may be refunded a part or the whole of their contributed amount if it
still ensures that the total value of the unit-linked fund is greater than VND
50 billion. If the net asset value of the fund falls below VND 30 billion on
the valuation date, the insurer must top up the fund using the owner's fund to
ensure that the net asset value is not lower than VND 30 billion within 30
days.
6. An insurer must ensure that the assets formed
from the unit-linked fund are separated from the owner’s fund and other
policyholder funds. In case an insurer establishes unit-linked funds that are
directly managed by the fund management company, the insurer must ensure the
assets formed from these unit-linked funds must be separated from other
unit-linked funds.
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Article 107. Investment
objectives of unit-linked funds
1. The investment objectives of unit-linked funds
must be clear and detailed so that policyholders can make an informed
assessment of their current state of operation and the risks that they face.
2. The investment objectives of unit-linked funds
must be disclosed in a clear and comprehensive manner in brochures and
insurance policies.
Article 108. Investment
limits of unit-linked funds
1. The investment limits in each portfolio of
investment assets of the unit-linked fund must be consistent with the
investment policy and investment objectives specified in the method and basis
of charging premiums of the products registered with Ministry of Finance and in
compliance with Clause 2 of this Article. The investment in assets of the
unit-linked fund must comply with the general regulations on investment
principles in Clause 2, Article 99 of the Law on Insurance Business No.
08/2022/QH15.
2. Investment limits of each unit-linked fund:
a) Government debt instruments: No restriction;
b) Actively traded securities of issuers: up
to 100% of the total asset value of the unit-linked fund;
c) Actively traded securities of an insurer:
up to 10% of the total value of the actively traded securities of that
organization and up to 20% of the total asset value of the unit-linked fund;
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dd) Investment in companies in the same group of
companies with ownership relations in the following cases: parent company, subsidiary
company; companies owning more than 35% of each other's shares and contributed
capital; group of subsidiaries having the same parent company: up to 30% of the
total asset value of the unit-linked fund;
e) Investment in securities investment funds,
shares of securities investment companies established and operating in Vietnam:
0% of the total asset value of the unit-linked fund.
3. The investment limits of the unit-linked fund
may differ from those specified Clauses 1 and 2 of this Article as a result
of an increase or decrease in the value of the investment assets, legal
payments of the unit-linked fund, and the full or partial division,
consolidation, acquisition of issuers. In such circumstances, the unit-linked
fund is not allowed to invest in assets with deviations. Within 3 months from
the date of deviation, the insurer must request the fund management company to
adjust the investment portfolio to meet the investment limits’ requirements
specified in Clauses 1 and 2 of this Article.
The insurer must notify Ministry of Finance in
writing of, and disclose information to the policyholder about the causes of
the above deviations, the remedial measures taken and the effectiveness of the
remedy.
4. If the deviation is caused by the insurer or
fund management company's failure to comply with the investment limits
specified in Clauses 1 and 2 of this Article or the investment policies and
investment objectives of the unit-linked fund, which are specified in the
method, the basis on which premiums are charged, the insurer must request the
fund management company to readjust the investment portfolio within 15 days
from the date of deviation.
5. The insurer shall compensate for damage caused
to the policyholder and the unit-linked fund in the following cases:
a) They fail to comply with the investment policies
and investment objectives specified in the premium-charging method and basis
registered with the Ministry of Finance;
b) Investment in restricted assets or investment in
excess of investment limits as prescribed in Clauses 1 and 2 of this Article.
6. The amount of compensation for the policyholder
and the unit-linked fund is determined on the basis of the actual damage
incurred. Where investment activities under Clause 5 of this Article generate
profits, the insurer must account all profits to the unit-linked fund.
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Article 109. Valuation of
unit-linked funds
1. The insurer must value the assets in the
unit-linked fund's portfolio at least once a week, at market value, or fair
value (if market value is unavailable). The insurer must specify the valuation
date in the rules and terms of insurance products in order to buy and sell fund
units. If the valuation date coincides with a holiday or day off as prescribed
by law, the insurer shall determine the valuation date on the next working day.
2. The determination of the net asset value of the
unit-linked fund must comply with the principles of determining the net asset
value of the open-ended fund in accordance with applicable laws.
3. The custodian bank, which is legally established
and operating in Vietnam, approves the determination of the net asset value of
the unit-linked fund.
4. Insurers, fund management companies, and
custodian banks must have a mechanism and process in place for comparing,
reviewing, examining, and supervising the net asset valuation to ensure that it
is accurately and suitably calculated.
5. The insurer must take full responsibility in
case of misvaluing of fund units, and must compensate policyholders and the
unit-linked fund for deviations arising from the purchase and sale of these
fund units because the net asset value of the fund is misvalued with the
deviation level as follows:
a) Reach at least 0.5% of the net asset value, for
a unit-linked fund that invests in stocks. The unit-linked fund invests in
stocks no less than 70% of the total asset value in the stock portfolio;
b) Reach at least 0.75% of the net asset value, for
a unit-linked fund that invests in bonds. The unit-linked fund invests in
stocks no less than 70% of the total asset value in the bond portfolio;
c) Reach at least 1.00% of net asset value for
other unit-linked funds of the insurer.
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a) Re-determine the net asset value of the
unit-linked fund on each trading day during the time the fund is misvalued;
b) Determine compensations for the fund and
compensations for policyholders from mispricing the fund's assets on each
trading day. The insurer is not required to compensate the policyholders for deviations
of less than VND 100,000, but the entire amount corresponding to the deviation
value of less than VND 100,000 must be put into the fund.
7. The amount of compensation for the policyholder
and the unit-linked fund from the purchase and sale of fund units in case of
misvaluing the fund units is determined as follows:
a) In case the fund is undervalued, the
compensation amount for the policyholder and the unit-linked fund is determined
as follows:
If the premium is allocated to purchase fund units
before the time the fund is misvalued and the units are sold during the period
when the fund is misvalued: The amount of compensation to the policyholder is
determined based on the margin of error and the number of fund units sold by
the policyholder;
If the premium is allocated to purchase fund units
during the period when the fund is misvalued and continues to be held after the
period when the fund is misvalued: The insurer shall compensate the unit-linked
fund. The compensation amount is determined based on the margin of error and
the number of fund units that the policyholder has purchased and continues to
hold after the misvaluing period.
b) In case the fund is overvalued, the compensation
amount for the policyholder and the unit-linked fund is determined as follows:
If the premium is allocated to purchase fund units
before the time the fund is misvalued and the units are sold during the period
when the fund is misvalued: The insurer shall compensate the unit-linked fund.
The compensation amount is determined based on the margin of error and the
number of fund units that the policyholder has sold during the mispricing
period;
If the premium is allocated to purchase fund units
during the period when the fund is misvalued and continues to be held after the
period when the fund is misvalued: The compensation amount is determined based
on the margin of error and the number of fund units that the policyholder has
purchased and continues to hold after the mispricing period.
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8. Within 7 working days from the date on which the
error is found, the insurer must report to the Ministry of Finance the plan to
remedy the error when valuing the fund units, the plan to compensate for damage
to the fund and the policyholders. The plan must clearly state the cause of the
incident, the time when the fund was misvalued, the extent of the fund's
damage, the extent of the policyholder's damage, together with a list of the
policyholders with impaired benefits to be compensated and compensation amount
for each policyholder. Within 15 working days from the date of the report to
the Ministry of Finance, the insurer must pay compensation for the damage
incurred to the policyholders and the unit-linked fund.
Article 110. Determination of
selling and buying prices of fund units
1. Selling price is the price of one fund unit when
the insurer sells it to the policyholder on the valuation date.
2. Buying price is the price of one fund unit when
the insurer buys it from the policyholder on the valuation date.
3. Fund unit is the asset of the unit-linked fund
which is divided into units of equal value.
4. The selling price and buying price of fund units
are determined based on the net asset value of each fund unit on the valuation
date immediately following the day when the insurer receives request to buy or
sell fund units. The difference between the selling price and the buying price
of a fund unit must not exceed 5% of the selling price.
5. Net asset value of each fund unit is equal to
the total value of assets in the unit-linked fund minus related liabilities
divided by the total number of fund units.
Article 111. Buying and
selling fund units
1. The policyholder has the right to buy more fund
units from or redeem fund units to the insurer.
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a) The insurance policy of the policyholder is
still valid and contains the amount for additional purchase;
b) There is a request to buy more fund units
according to the insurer's form, specifying the amount of the sum they want to
buy more fund units, the percentage of each unit-linked fund, and confirmation
on the request to buy additional fund units.
3. The policyholder may redeem fund units when the
following requirements are satisfied:
a) The insurance policy of the policyholder is
still valid and the number of fund units to be redeemed meets the regulations
on the minimum amount of the insurer for the policyholder’s redemption of fund
units;
b) There is a request to redeem fund units
according to the insurer's form, specifying the amount of the number of fund
units to redeem, the percentage of each unit-linked fund to be deemed, or the
sum to be withdrawn, and confirmation on the request to redeem fund units.
4. The insurer shall handle the request to buy more
or redeem fund units on the next valuation date. The buying or selling price of
fund units is determined according to Article 110 of this Decree.
5. The account value under the unit-linked
insurance policy of the policyholder changes according to the request to buy
more or redeem fund units, calculated from the time the insurer determines
buying price or selling price and complete the purchase and sale of fund units
at the request of the policyholder. The insurer must clearly specify the sale
and purchase transactions from the unit-linked insurance policy.
6. The insurer is not allowed to refuse the policyholder’s
request to buy more or redeem fund units when the policyholder has satisfied
the requirements specified in Clauses 2 and 3 of this Article.
Article 112. Unit-linked fund
investment council
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a) Approve the investment policies and procedures
of each unit-linked fund on the most prudent basis to ensure the safety of the
unit-linked fund's assets and in accordance with their investment objectives
and strategies as disclosed to customers. Approve the valuation manual and
reach an agreement to use the valuation manual when engaging more than one fund
management company to manage the unit-linked fund. Any changes in regulations,
policies, and investment procedures of each unit-linked fund must be approved
by the Investment Council before they are implemented;
b) Decide to close the unit-linked fund and convert
its assets into a new unit-linked fund with the same investment objectives;
change the name of the unit-linked fund; split or merge existing fund units or
stop valuing fund units and transactions related to insurance policies in
exceptional cases specified in insurance policies to protect the interests of
the policyholders;
c) Approve investment assets in accordance with the
investment limits specified in Article 108 of this Decree;
d) Other tasks at the request of competent
authorities and regulations of law.
2. The Investment Council is composed of at least
three members, in which:
a) One member is an actuary of the insurer;
b) One member is an employee of the insurer, or the
insurer’s parent company, or a fund management company which obtains a
certificate of Chartered Financial Analysts (CFA) or a fund management practice
certificate issued by State Securities Commission (SSC), or an equivalent
professional degree, and have at least three years' experience in managing the
operation of an open-ended fund or a unit-linked fund;
c) One member is a lawyer of the insurer, or the
insurer’s parent company, who has professional qualifications in law on the
field of investment or has at least five years of experience directly working
in insurance, finance or banking.
3. The Investment Council must meet quarterly and may
hold ad-hoc meetings at the request of the insurer. Decisions of the Investment
Council are passed by voting at in-person meetings, meetings via telephone,
internet, and audio-visual media, or in the form of written opinions.
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1. An insurer must engage a custodian bank to
perform the following tasks:
a) The asset custody of unit-linked funds must
comply with applicable regulations on the establishment and management of
open-ended funds;
b) Supervise the asset management of unit-linked
funds of the insurer, or the fund management company authorized by the insurer,
in accordance with the investment limits, objectives, and investment policies,
portfolio structure of the insurer, and regulations of applicable law at all
times. If any violation against laws or investment trust contract is found, the
custodian bank must report to the Ministry of Finance (the Department of
Insurance Management and Supervision) without delay, and notify the fund
management company within 24 hours since the detection, and require the
corrective measure or remedial action to address the violation within the
prescribed time limit;
c) Monitor the expenses of the fund to ensure that
they are only paid from the fund's assets, in accordance with applicable law
and the fund's investment objectives;
d) Collaborate with the insurer and fund management
company to regularly review the net asset value, calculate the value of the
unit-linked fund and the net asset value per fund unit, and ensure that these
values are calculated correctly, accurately, and in accordance with the law;
dd) Monitor the implementation and evaluation of
the outcomes of the consolidation, acquisition, dissolution, and liquidation of
the unit-linked fund, in cases where the insurer is authorized to take these
measures.
2. The assets of the unit-linked fund that are held
by the custodian bank and registered in the name of the insurer are assets
owned by the unit-linked fund, not by the custodian bank or the fund management
company. The custodian bank may not use the assets of the unit-linked fund to
pay or guarantee payment for its own debts or to a third party.
3. The custodian bank shall prepare and maintain
documentation in both hard copy and electronic form for 10 years in order to
confirm that the insurer and fund management company’s investment complies with
the investment objectives of the unit-linked fund and regulations of law. These
documents must be provided upon request in writing by the Ministry of Finance.
Section 3. RETIREMENT INSURANCE
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1. Retirement insurance includes:
a) Retirement insurance for each individual;
b) Retirement insurance for groups of employees
(group-type retirement insurance); the policyholder is the employer; the
employee will receive all benefits of the insurance policy after a certain
period of time as agreed between the parties and recorded in the insurance
policy.
2. Products in the retirement insurance have the
following characteristics:
a) After the policyholder has paid the insurance
premiums in full, the insured starts being paid retirement benefits when
reaching the age agreed upon in the insurance policy, but not lower than the
retirement age in accordance with regulations of law on retirement age;
b) The premium structure of the retirement
insurance product is separated between the investment fee and the initial fee
as prescribed at Point a, Clause 1, Article 99 of this Decree;
c) Each insured person under an individual-type
policy or a group-type policy has a separate retirement insurance account as
prescribed in Article 118 of this Decree.
Article 115. Basic insurance
benefits of retirement insurance policies
1. An insurer may design their own retirement
insurance products but must include periodic retirement benefits as prescribed
in Clause 2 of this Article, and death and disability benefits as prescribed in
Clause 3 of this Article.
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a) Retirement benefits are paid periodically until
the death of the insured or for at least 10 years, depending on the terms of
the insurance policy;
b) The insurer and the policyholder agree on the
amount of retirement benefits each period, the number of periods to receive
retirement benefits;
c) Calculating the accrued interest from the unpaid
retirement benefits to the policyholder, but not lower than the committed
minimum investment interest rate agreed upon in the insurance policy.
3. With regard to death and disability benefits,
the insurer must ensure that the policyholder is entitled to these benefits
while the insurance premiums are still being paid, and the insurer may continue
to provide these benefits while the insurance benefits are being paid,
depending on the terms of the insurance policy. Death and disability benefits
include at least the following benefits:
a) Funeral allowance benefits:
Upon receipt of a claim for payment of death
benefits, the insurer must immediately pay the beneficiary(ies) the funeral
allowance agreed upon in the insurance policy, regardless of whether the
policyholder had sufficient coverage.
b) Death benefits and total permanent disability
benefits:
If the insured person's death or total permanent disability
is covered by the insurance policy and occurs within the prescribed time limit,
the insurer must pay the beneficiary the sum insured agreed upon in the
insurance policy;
The policyholder is entitled to choose the sum
insured when entering into the insurance policy and may adjust the sum insured
during the effective period of the insurance policy as agreed in the insurance
policy.
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1. When rolling out a retirement insurance, the
insurer must set up a voluntary retirement fund, and then keep separate
bookkeeping of revenues, expenses, assets, and capital sources of the voluntary
retirement fund from other policyholder’s funds and owner’s funds.
2. The voluntary retirement fund is funded by the
insurance premiums paid by policyholders and the contributions made by life
insurers as prescribed in clause 3 hereof.
3. When setting up a voluntary retirement fund, the
insurer must contribute at least 200 billion Vietnam dong from its owner's fund
to the fund and must maintain at least 200 billion Vietnam dong in the fund at
all times. The insurer is entitled to a portion of investment interest for this
contribution corresponding to the announced investment interest rate of the
voluntary retirement fund.
4. The investment of voluntary retirement funds is
subject to the investment limits prescribed in Article 117 of this Decree.
5. The insurer may not use assets of the voluntary
retirement fund to pay fines for violations of the law, debts, and transactions
unrelated to the voluntary retirement fund.
6. All assets formed from the premiums allocated to
the policyholders of the voluntary retirement fund belong to insured persons.
Article 117. Investment
limits of voluntary retirement funds
1. The investment limits in each portfolio of
investment assets of the voluntary retirement fund must be consistent with the
investment policy and investment objectives specified in the premium-charging
method and basis registered with Ministry of Finance and in compliance with
Clause 2 of this Article. The investment in assets of the voluntary retirement
fund must comply with the general regulations on investment principles in
Clause 2, Article 99 of the Law on Insurance Business No. 08/2022/QH15.
2. Investment limits of voluntary retirement fund:
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b) Government debt instruments: not limited to but
at least 40% of the total value of assets invested by the voluntary retirement
fund;
c) Government-guaranteed bonds, local government
bonds, secured corporate bonds: up to 25% of the total value of assets invested
by the voluntary retirement fund;
d) Stocks (except shares of securities companies,
finance companies, finance leasing companies), unsecured corporate bonds,
capital contribution to other enterprises: up to 20% of the total value of
assets invested by the voluntary retirement fund;
dd) Investment in issued shares of an enterprise,
corporate bonds: up to 5% of the volume of each issuance and up to 5% of the
total value of investment assets of the voluntary retirement fund;
e) Investment assets other than those specified at
Points a, b, c, d and dd of this Clause: 0% of the total value of assets
invested by the voluntary retirement fund.
Article 118. Retirement
insurance accounts
1. The retirement insurance account is a separate
account for each insured person that holds the accumulated premiums paid after
deducting the initial fee. The account is opened, monitored, and managed by the
insurer.
2. The insurer must commit the minimum investment
interest rate in the retirement insurance account in the insurance policy. At
the end of each fiscal year, the insurer is responsible for announcing the
investment interest rate and accumulated account value up to that time. If the
investment returns of the retirement insurance account are lower than the
committed interest rate, the insurer must use the assets of its owner’s fund to
cover any shortfalls. In case the insurance policy has an agreement on the
accumulation of insurance benefits into the value of the retirement insurance
account, these benefits will still be calculated with accrued interest as
prescribed at Point c, Clause 2, Article 115 of this Decree.
3. The insured person may not withdraw from the
retirement insurance account before the maturity date when he/she reaches the
retirement age, as specified in the insurance policy, except for the case
specified in Article 119 of this Decree.
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The insured is entitled to request for early
withdrawal and the insurer is responsible for paying part or all of the value
of the retirement insurance account in the following cases:
1. The insured person has a degree of impairment
from 61% or more as per applicable law.
2. The insured suffers from a fatal disease as
prescribed by law.
3. The insured person is a Vietnamese citizen who
is legally permitted to reside in a foreign country by a competent authority.
4. The insured may withdraw from the retirement
account early to pay off their personal loans (except for consumer loans) at a
bank, provided that the loan contract must remain valid for at least 24 months before
the maturity date of the retirement account.
Article 120. Transfer of
retirement insurance accounts
1. If the insured person terminates their
employment contract or loses their job and is no longer a member of the group-type
policy, they have the following options:
a) They transfer the retirement insurance account
from the group-type policy to the individual-type policy with the corresponding
value at the same insurer; or
b) They transfer their retirement insurance account
to a group-type policy of the new enterprise. The new group-type policy may be
at the same insurer, or another insurer, depending on the type of the new
enterprise.
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3. In case of switching to a group-type policy at a
new insurer, within five working days of receiving the following: a request to
transfer the retirement insurance account, and documentation showing that the
beneficiary is no longer a member of the group-type policy of the old
enterprise and is now a member of group-type policy of the new enterprise, the
insurer must transfer the entire value of that account, up to the request date,
to the new insurer, after deducting the account transfer fee (if any).
4. The transferred retirement account value will
accrue according to the agreement in the new group-type policy.
5. The new insurer is prohibited from charging an
initial fee for the value of the transferred retirement insurance account.
Article 121. Suspension of
retirement insurance accounts
1. The policyholder and the insurer may agree to
suspend the retirement insurance account temporarily if the policyholder cannot
afford the premium.
2. During the suspension of the retirement insurance
account, the insurer is prohibited from charging any fee to the policyholder.
The value of the retirement insurance account is accumulated according to the
investment rate announced annually by the insurer as agreed in the insurance
policy. The insurer is not obliged to pay out benefits during the suspension
period, except for two cases: periodic retirement benefits when the insured
reaches a certain age; or death and disability benefits if the insured dies or
has total permanent disability (with the entire value of the accumulated
retirement insurance account).
3. The policyholder may request the insurer to
revalidate the suspended retirement insurance account and resume paying the
premium.
Chapter VIII
IMPLEMENTATION
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1. This Decree comes into force as of the date of
signing, except for the cases specified in Clause 2 of this Article.
2. Article 33, the articles specified in Section 6,
Chapter II, Articles 81, 82, 83, Clauses 1, 2, 3, 4, 5 and 6, Article 93 of
this Decree take effect from January 1, 2023.
3. In case an insurer, reinsurer, or foreign branch
in Vietnam has invested in corporate bonds of an issuing enterprise before
January 1, 2023 with the purpose of restructuring the debts of that issuing
enterprise, the extension of this investment is not allowed.
4. This Decree replaces the following documents:
a) 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 Articles 10, 61, 62, 63,
64, 65, 66, 67. Articles 10, 61, 62, 63, 64, 65, 66, 67 of Decree No.
73/2016/ND-CP, take effect until the end of December 31, 2027;
b) Chapter III of Decree No. 151/2018/ND-CP dated
November 7, 2018 of the Government on amendments to Decrees regulating
investment and business conditions under the scope of state management of the
Ministry of Finance;
c) Article 1 of Decree No. 80/2019/ND-CP dated
November 1, 2019 of the Government on amendments to 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, Decree No.
98/2013/ND-CP dated August 28, 2013 of the Government on penalties of
administrative violations in the field of insurance business and lottery
business, which is amended by Decree No. 48/2018/ND-CP dated March 21, 2018 of
the Government.
Article 123. Responsibilities
for implementation
Ministers, heads of ministerial-level agencies,
heads of Governmental agencies, Presidents of People’s Committees of provinces
and centrally affiliated to cities, and regulated entities of the Decree shall
implement this Decision.
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ON BEHALF OF
THE GOVERNMENT
PP. PRIME MINISTER
DEPUTY PRIME MINISTER
Le Minh Khai