Luật Kinh doanh bảo hiểm 2022
NATIONAL
ASSEMBLY OF VIETNAM
——–
SOCIALIST
REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
—————
Law No.
08/2022/QH15
Hanoi, June 16,
2022
LAW
INSURANCE BUSINESS
Pursuant to the Constitution of the Socialist
Republic of Vietnam;
The National Assembly herein passes the Law on
Insurance Business.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
1. This Law provides for organization and operation
of insurance business; rights and obligations of entities and persons
participating in insurance; state management of insurance business activities.
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Article 2. Subjects of application
1. Insurers; reinsurers; insurance agents; brokers;
entities and persons providing ancillary benefit services; mutuals providing
microinsurance products.
2. Branches of foreign non-life insurers, foreign
reinsurers’ branches (hereinafter referred to as foreign insurance branches in
Vietnam).
3. Representative offices of foreign insurers,
foreign reinsurers, foreign insurance brokers and foreign financial and
insurance corporations in Vietnam (hereinafter referred to as foreign
representative offices in Vietnam).
4. Policyholders/the assured, the insured,
beneficiaries.
5. State regulatory authorities in charge of
insurance business affairs.
6. Entities and persons involved in insurance
business.
Article 3. Application of the Law on Insurance Business,
other relevant laws and international practices
1. If any other law passed after the entry into
force of this Law needs to contain regulations other than those laid down
herein pertaining to insurance contracts; establishment, management and provision
of insurance services, financial, bookkeeping, accounting and financial
reporting activities; payment capabilities; and intervention measures to be
applied to insurers, reinsurers, foreign branches in Vietnam, mutuals providing
microinsurance products and insurance brokers, cases of compliance or
non-compliance with regulations of this Law must be specified.
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Article 4. Interpretation
For the purposes of this Law,
terms used herein are construed as follows:
1. Insurance business industry
(also insurance industry) covers a range of such sectors as insurance,
reinsurance, cession and others related to insurance business, including
insurance agent, broker and insurance ancillary services.
2. Insurance service (also
insurance business sector) refers to an activity of an insurer, non-life
insurer’s foreign branch, mutual providing microinsurance product that insures
the risk of the insured. That activity is performed by the policyholder’s
paying insurance premiums in order for the aforesaid entity to pay indemnity or
insurance coverage in case of any policy event that occurs under terms and
conditions of an insurance contract.
3. Reinsurance service refers
to the practice whereby an insurer, a reinsurer or an insurer’s foreign branch
in Vietnam is paid a sum of reinsurance premium by another insurer, reinsurer
or insurer’s foreign branch in Vietnam; by a foreign insurer, reinsurer or
foreign insurance organization to undertake to cover the insured liability.
4. Cession refers to the
practice whereby an insurer, a reinsurer or an insurer’s foreign branch in
Vietnam transfers a portion of their insured liability and pay reinsurance
premium to another insurer, reinsurer or insurer’s foreign branch in Vietnam;
to a foreign insurer, reinsurer or foreign insurance organization.
5. Insurance agent service refers
to one or several fiduciary duties assigned by an insurer, a foreign non-life
insurer’s branch or a mutual providing microinsurance product, including giving
advice or counsels on insurance products (also insurance plans or schemes);
introducing insurance products; marketing insurance products; making
arrangements preparatory to the conclusion of insurance contracts; collecting
insurance premiums; gathering related documents necessary for settlement of
claims and payment of insurance.
6. Insurance brokerage refers
to the practice of providing a policyholder with information and advice or
counsel on type of insurance, line of insurance business, insurance product,
insurance schemes, terms and conditions, insurance premium, insurer, reinsurer,
foreign insurance branch in Vietnam; other service activities related to the
negotiation, arrangement for conclusion and execution of insurance or
reinsurance contracts or policies.
7. Ancillary insurance service covers
a range of activities, such as insurance consulting, underwriting, actuary,
loss assessment, and facilitation for settlement of insurance claims. Ancillary
insurance service does not comprise any service that an insurer, a reinsurer, a
foreign insurance branch in Vietnam or a mutual providing microinsurance
product renders on their own account to do their insurance or reinsurance
business.
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9. Insurance risk assessment refers
to an act of identification, classification, assessment, evaluation or
quantification of risks in people, property and civil liability which serves as
the prerequisite for participation in insurance and reinsurance.
10. Insurance actuarial service
refers to the function of collecting and analyzing statistical data;
calculating insurance premiums, reserves, assets and solvency; assessing
income; valuing insurance companies in order to ensure that an insurer,
reinsurer, foreign insurance branch in Vietnam or mutual providing
microinsurance product is financially prudent.
11. Insurance loss assessment refers
to the act of identifying the actual state, causes and degree of loss;
calculating the distribution in liability for compensation for the covered
loss. This service shall serve as the prerequisite to settlement of insurance
claims.
12. Support for settlement of
insurance claims refers to the act of assisting the policyholder, insured,
beneficiary or insurer, reinsurer, foreign insurance branch in Vietnam, mutual
providing microinsurance product in insurance claims settlement or payout
process.
13. Life insurance refers
to a type of insurance designed to offer protection for an insured person who
is alive or dead.
14. Non-life insurance refers
to a type of insurance designed to offer protection against property and other
losses or to provide third-party civil liability cover.
15. Health insurance refers
to a type of insurance designed to provide the insured with insurance benefits
when the insured suffers injury, accident or illness, or needs medical care.
16. Insurance contract (also
insurance policy) refers to an arrangement between a policyholder and an
insurer or a foreign non-life insurer’s branch or a mutual providing
microinsurance product whereunder the policyholder is bound to pay insurance
premiums; the insurer, the foreign non-life insurer’s branch or the mutual
providing microinsurance service is bound to pay indemnity or insurance
benefits or coverage under contractual terms and conditions.
17. Insurer (also insurance
company) refers to an enterprise that is established, managed and run as
per this Law and other relevant laws to do business in the insurance,
reinsurance and reinsurance cession sector. Insurance companies are classified
into life insurance, non-life insurance and health insurance companies.
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19. Foreign non-life insurer’s
branch (also foreign non-life insurance branch) refers to the subsidiary of
a parent foreign non-life insurer that has no legal personality and is offered
guarantee from the parent foreign non-life insurer for their obligations and
commitments arising during their existence period in Vietnam.
20. Foreign reinsurer’s branch refers
to the subsidiary of a parent foreign insurer that has no legal personality and
is offered guarantee from the parent reinsurer for their obligations and
commitments arising during their existence period in Vietnam.
21. Insurance broker (also
insurance brokerage company) refers to an enterprise that is established,
managed and run as per this Law and other relevant laws to do business in the
insurance brokerage sector.
22. Microinsurance refers
to the insurance service meant for low-income individuals and families in order
to offer them protection against life, health and property risks.
23. Mutual providing
microinsurance product refers to an entity that has legal personality,
independent accounting regime; is founded by members or institutional
representatives of members to render not-for-profit microinsurance product in
order for members participating in insurance to offer mutual aid or support to
each other according to the mechanism of voluntary contribution, financial
autonomy and self-responsibility before law if such aid or support is
restricted to their assets generated from microinsurance product.
24. Policyholder (also the
assured) refers to an entity or person entering into an insurance contract
with an insurer, foreign non-life insurer’s branch or mutual providing
microinsurance product and paying insurance premiums.
25. Insured person (also the
insured) refers to an entity and person whose property, civil liability,
health, life, obligations or economic benefit is insured under an insurance
contract.
26. Beneficiary refers to
an entity or person that is designated to receive insurance payout as agreed
upon in an insurance contract.
27. Insured or policy event refers
to an unexpected event agreed upon between contracting parties or prescribed in
law in which, when occurring, an insurer, a foreign non-life insurer’s branch
or a mutual providing microinsurance product is bound to pay compensation or
insurance cover or benefit under contractual terms and conditions.
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29. Coinsurance refers to
the situation where insurers and foreign non-life insurers’ branches jointly
agree with the policyholder to conclude an insurance contract under which
insurers and foreign non-life insurers’ branches can receive insurance premiums
and pay indemnity or insurance at the agreed-upon percentage rate.
Article 5. Policies for development of the
insurance industry
1. The Government shall provide protection for
legitimate rights and interests of entities and persons participating in
insurance and organizations rendering insurance services.
2. The Government shall provide insurers,
reinsurers, foreign insurance branches in Vietnam and mutuals providing
microinsurance product with incentive and facilitation measures for research
and development of products, services, application of advanced technologies in
the insurance industry.
3. The Government shall provide insurers,
reinsurers, foreign insurance branches in Vietnam and mutuals providing
microinsurance product with incentive and facilitation measures for resumption
of investment in the economy, re-investment and development of the insurance
market.
4. The Government shall provide incentive and
facilitation measures for launching, offering and participating in
agricultural, forestry, fishery or aquaculture insurance, microinsurance and
other insurance products serving social welfare and security purposes.
Article 6. Principles of provision and use of
insurance services
1. Entities and persons in Vietnam
wishing to participate in insurance schemes can only participate in insurance
with insurers, foreign non-life insurers’ branches or mutuals providing
microinsurance products obtaining establishment permits or business licenses in
Vietnam, except in case of using cross-border insurance services under the
international treaties to which the Socialist Republic of Vietnam is a
signatory.
2. The Government shall provide
detailed regulations on provision and use of cross-border insurance, insurance
brokerage and insurance ancillary services in conformity with the international
treaties to which the Socialist Republic of Vietnam is a signatory.
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1. There are the following types
of insurance:
a) Life insurance;
b) Health insurance;
c) Non-life insurance.
2. The Government shall elaborate
on regulations on insurance operations of respective types of insurance
referred to in clause 1 of this Article.
Article 8. Compulsory insurance
1. Compulsory insurance means an
insurance product or plan serving the purposes of protection of public
interest, environment and social safety.
2. Classes of compulsory
insurance, including:
a) Compulsory insurance against
civil liability of vehicle owner;
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c) Compulsory insurance in the
construction industry;
d) Classes of compulsory insurance
prescribed in other laws that meet the regulations laid down in clause 1 of
this Article.
3. Entities and persons eligible
for participation in compulsory insurance schemes shall be obliged to buy
compulsory insurance schemes and may opt to take compulsory insurance with
authorized insurers and foreign non-life insurers’ branches.
4. Insurers and foreign non-life
insurers’ branches obtaining permission to provide compulsory insurance shall
not be allowed to refuse to sell their insurance to entities and persons fully
meeting the eligibility conditions for buying compulsory insurance under law.
5. The Government shall impose detailed regulations
on conditions binding upon extent of cover, insurance premiums, minimum amounts
required for compulsory insurance coverage prescribed in clause 2 of this
Article.
Article 9. Prohibited acts
1. Insurance, reinsurance, reinsurance ceding and
insurance brokerage business activities are performed when none of
establishment permits or business licences is obtained.
2. Insurance, reinsurance, reinsurance ceding and
insurance brokerage business activities are performed outside of the
permissible scope of business.
3. Insurance brokerage, insurance ancillary service
business is done when eligibility conditions for doing so as prescribed in law
are not met.
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a) Conspire with insurance
beneficiaries to settle insurance claims and pay insurance illegally;
b) Forge documents, intentionally
falsify information shown in documents required for filing claims for insurance
coverage and payout;
c) Forge documents, deliberately falsify
information to reject payment of insurance indemnities and insurance when
insurable events happen;
d) Cause self-harm or bodily
self-injury or deliberately self-inflicted loss or damage to property to claim
insurance benefits.
5. Using threats and force to
obtain the consent to insurance contracts.
Article 10. Socio-professional organizations
involved in the insurance industry
1. Socio-professional
organizations engaged in the insurance industry must be incorporated and
operated under law on associations; shall comply with regulatory provision
regarding the insurance industry and be kept under the supervision of the
Ministry of Finance.
2. Socio-professional
organizations involved in the insurance industry shall issue the professional
code of conduct and ethics, rules and standards to be applied to all of their
members; shall cooperate with state regulatory authorities in charge of the
insurance industry on promulgation, dissemination and enhancement of awareness
of law on insurance business.
Article 11. Insurance industry database
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2. Insurers; reinsurers; foreign insurance branches
in Vietnam; insurance brokers; insurance ancillary service providers; mutuals
providing microinsurance product shall be responsible for providing
policyholder, the insured, subject matter insured, insurance agent and other
relevant information used as inputs into the database in the insurance
industry.
2. According to the principle of insurable
interest, a policyholder must be entitled to the insurable benefit varying
according to specific types of insurance contract under this Law;
3. According to the principle of indemnity, the
amount of coverage or indemnity that the insured can get shall not exceed the
actual loss incurred in a policy event, unless otherwise agreed upon in an
insurance contract;
4. According to the principle of subrogation, the
insured shall be responsible for giving the insurer or foreign non-life insurer
the right to claim the amount of loss from the third party responsible for such
loss if such amount falls within the permissible loss limit. This principle
shall not apply to life and health insurance policies;
5. According to the principle of unpredictable
risk, in order for a risk to be covered or insured against, it must be an
unexpected and unanticipated one.
Article 17. Contents of insurance contracts
1. An insurance contract must include but not
limited to the followings:
a) The policyholder, the insured, the beneficiary
(if any), the insurer or the foreign non-life insurer’s branch;
b) Subject matter insured;
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d) Scope of insurance coverage and insurance
benefits; insurance rules, terms and conditions;
dd) Rights and obligations of the insurer, the
foreign non-life insurer’s branch and the policyholder;
e) Insurance policy period, date of entry into
force of the insurance contract;
g) Insurance premium, premium payment option;
h) Insurance coverage and payment option;
i) Dispute resolution method.
2. Minister of Finance shall elaborate on clause 1
of this Article with respect to life and health insurance contracts.
Article 18. Presentation and proof of conclusion
of insurance contracts
Insurance contracts must be made in writing. Proof
of conclusion of an insurance contract shall comprise insurance contract,
certificate of insurance, insurance policy or others prescribed in law.
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1. Disclaimer clauses shall prescribe cases in
which insurers or foreign non-life insurers’ branches can refuse to pay claims
and insurance.
2. In the presence of clauses on disclaimer of
insured liability, insurers and foreign non-life insurers’ branches must
clearly elaborate them in insurance contracts, give explicit, adequate
explanations and evidence about the fact that insurers have already received
full and clear explanations of these disclaimer clauses by insurers and foreign
non-life insurers’ branches when concluding insurance contracts.
3. Where any force majeure event or circumstantial
obstacle results in the policyholder’s late notice of any policy event, the
insurer or foreign non-life insurer’s branch is not allowed to apply disclaimer
clauses.
Article 20. Rights and obligations of insurers
and foreign non-life insurers’ branches
1. An insurer and foreign non-life insurer’s branch
shall have the following rights:
a) Collect insurance premiums under contractual
terms and conditions;
b) Request the policyholder to provide full and
accurate information related to conclusion and execution of the insurance
contract;
c) Revoke the insurance contract as per clause 2 of
Article 22 or unilaterally terminate the insurance contract under Article 26
herein;
d) Reject payment of insurance claims or insurance
if insurance claims fall outside of the limit of insured liability or fall
within the scope of application of the disclaimer clause as provided in the
insurance contract;
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e) Request the third party to repay the amount that
the insurer or the foreign non-life insurer’s branch pay as indemnity or coverage
to the insured in case of loss or damage to property; economic interests or
contractual or lawful obligations; civil liability that the third party causes;
g) Other rights prescribed by law.
2. An insurer and a foreign non-life insurer’s
branch shall take on the following obligations:
a) Provide the policyholder with proposal and
questionnaire related to insurable risks, subject matters insured, rules, terms
and conditions of insurance;
b) Give the policyholder with clear and full
explanations about insurance benefits, clauses on disclaimer of insured
liability, rights and obligations of the policyholder when concluding the
insurance contract;
c) Provide the policyholder with the proof of
conclusion of the insurance contract prescribed in Article 18 herein;
d) Issue premium invoices to the policyholder as
agreed upon in the insurance contract and stipulated in regulatory provisions
of relevant law;
dd) Pay indemnity and insurance in case of policy
event that occurs;
e) Give written explanations as to why payment of
any insurance claim or coverage is rejected;
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h) Store and retain insurance contract-related
documents and records under law;
i) Ensure confidentiality and security for
information provided by the policyholder or the insured, except as requested by
competent regulatory authorities or agreed by the policyholder or the insured;
k) Other obligations prescribed by law.
Article 21. Rights and obligations of the
policyholder
1. The policyholder shall have the following
rights:
a) Decide on the insurer or the foreign non-life
insurer’s branch with which the policyholder may conclude the insurance
contract;
b) Request the insurer or the foreign non-life
insurer’s branch to provide proposal and questionnaire related to risks covered
against, subject matters insured, rules, terms and conditions of insurance, and
interpret contractual terms and conditions;
c) Request the insurer or the foreign non-life
insurer’s branch to provide proof of conclusion of the insurance contract
referred to in Article 18 herein;
d) Request the insurer or the foreign non-life
insurer’s branch to issue premium invoices as agreed upon in the insurance
contract and stipulated in regulatory provisions of relevant law;
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e) Request the insurer or the foreign non-life
insurer’s branch to pay insurance claims or coverage or indemnity in case of
any policy event that occurs;
g) Transfer the insurance contract under
contractual terms and conditions or as provided by law;
h) Other rights stipulated by law.
2. The policyholder shall take on the following
obligations:
a) Provide all full and accurate information
related to the insurance contract upon the request of the insurer or the
foreign non-life insurer’s branch;
b) Carefully read and understand policy terms and
conditions, rights and obligations of the policyholder when entering into the
insurance contract, and other contents of the insurance contract;
c) Pay insurance premiums in full and on time under
contractual terms and conditions;
d) Inform the insurer or the foreign non-life
insurer’s branch of cases in which it is likely to assume aggregated or
alleviated risks or additional liability during the contract term as agreed
upon in the insurance contract;
dd) Inform the insurer or the foreign non-life
insurer’s branch of occurrence of any policy event as agreed upon in the
insurance contract; cooperate with the insurer or the foreign non-life
insurer’s branch on insurance loss assessment;
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g) Other obligations prescribed by law.
Article 22. Responsibilities and legal
consequences for breach of information disclosure obligations
1. When entering into insurance contracts, insurers
and foreign non-life insurers’ branches shall have the burden of providing full
and accurate information related to insurance contracts; give explanations
about contractual terms and conditions to policyholders. Meanwhile,
policyholders shall have the burden of providing full and accurate information
related to subject matters of insurance for insurers and foreign non-life
insurers’ branches.
2. Where any policyholder deliberately provides
inadequate or untrue information with the aim of concluding an insurance
contract to receive insurance indemnity or coverage, the insurer or foreign
non-life insurer’s branch may nullify the insurance contract. To such extent,
the insurer or the foreign non-life insurer’s branch shall not be obliged to
pay insurance indemnity or coverage and must reimburse insurance premiums that
the policyholder pays after deducting reasonable expenses (if any) under
contractual terms and conditions. The policyholder is bound to compensate for
any possible loss that the insurer or the foreign non-life insurer’s branch
incurs due to such act.
3. Where the insurer or the foreign non-life
insurer’s branch deliberately fails to discharge its information disclosure
obligations or provides untrue information with the intention of obtaining the
insurance contract, the policyholder can terminate the insurance contract and
be repaid insurance premiums. The insurer or the foreign non-life insurer’s
branch is bound to compensate for any loss that the policyholder may suffer due
to such act.
Article 23. Changes in levels of insurable risks
1. Whenever there is any change in threshold
factors used for calculation of insurance premium that leads to any decrease in
risks insured, under contractual terms and conditions, the policyholder may
request the insurer or the foreign non-life insurer’s branch to perform one of
the following tasks:
a) Reduce insurance premiums during days left to
the expiry date of the insurance contract;
b) Increase the sum insured during days left to the
expiry date of the insurance contract;
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d) Expand the scope of insurance cover during days
left to the expiry date of the insurance contract.
2. Where the insurer or the foreign non-life
insurer’s branch fails to accept the request specified in clause 1 of this
Article, the policyholder may unilaterally terminate the insurance contract by
promptly notifying it of the intention of such termination.
3. Whenever there is any change in threshold
factors used for calculation of insurance premium that results in any increase
in insurable risks, under contractual terms and conditions, the insurer or the
foreign non-life insurer’s branch may take one of the following actions:
a) Re-compute insurance premiums during days left
to the expiry date of the insurance contract;
b) Decrease the sum insured during days left to the
expiry date of the insurance contract;
c) Shorten the insurance policy period;
d) Limit the scope of insurance cover during days
left to the expiry date of the insurance contract.
4. Where the policyholder refuses to accept the
request specified in clause 3 of this Article, the insurer or the foreign
non-life insurer’s branch may unilaterally terminate the insurance contract by
promptly notifying the policyholder of the intention of such termination.
Article 24. Interpretation of insurance
contracts
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Article 25. Null and void insurance contracts
1. An insurance contract shall be made null and
void in the following cases:
a) The policyholder has no insurable interest at
the time of conclusion of an insurance contract;
b) No subject matter of insurance exists at the
time of conclusion of an insurance contract;
c) At the time of conclusion of the insurance
contract, the policyholder has the knowledge of the policy event that occurs;
d) Objectives and contents of an insurance contract
are in contravention of prohibition clauses and social ethics;
dd) The insurer, the foreign non-life insurer’s
branch and the policyholder enter into the fraudulent insurance policy;
e) The policyholder is a minor; the person who is
incapable of civil acts; the person who have cognitive and behavioral
difficulties; the person whose capacity to perform civil acts is restricted;
g) When being entered into, an insurance contract
contains any confusion that causes one or more parties to fail to achieve the
purposes of entering into that contract, unless the contractual purposes of the
contracting parties have been achieved, or the contracting parties can take
immediate remedial actions against such confusion to make the purposes of
entering into the contract successfully achieved;
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i) The insurance contract is concluded under threat
or pressure;
k) The policyholder lives with health condition
related to cognitive disability and impulse control disorder when entering into
the insurance contract;
l) The insurance contract is in contravention of
regulations on presentation of insurance contracts laid down in Article 18
herein.
2. When an insurance contract is null and void, it
is no longer in effect from the date of conclusion. The insurer or the foreign
non-life insurer’s branch and the policyholder shall be obliged to return what
they have received to each other. The party at fault must be liable to pay
compensation.
Article 26. Unilateral termination of insurance
contracts
The insurer, the foreign non-life insurer’s branch
or the policyholder may unilaterally terminate the insurance contract in the
following cases:
1. The policyholder defaults on insurance premiums
or does not pay insurance premiums in full by the agreed due date or after the
extended due date;
2. The insurer, the foreign non-life insurer’s
branch or the policyholder does not accept the request for change in the level
of insurable risk under Article 23 herein;
3. The insured fails to apply safety measures to
protect subject matters insured as provided in clause 3 of Article 55 herein;
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Article 27. Legal consequences of unilateral
termination of insurance contracts
1. In case of unilateral termination of an
insurance contract prescribed in clause 1 of Article 26 herein, the following
actions shall be taken as follows:
a) Insurance premiums remain to be paid in full by
the policyholder till the time of unilateral termination of the insurance
contract. This regulation shall not apply to life insurance contracts and
health insurance contracts, except group insurance contracts;
b) When unilaterally terminating a life insurance
contract or health insurance contract in this case, the insurer or the foreign
non-life insurer’s branch shall be responsible for paying insurance to the
insured if the policy event occurs before the time of unilateral termination of
the insurance contract, and may deduct insurance premiums paid till the time of
unilateral termination of the insurance contract;
c) When unilaterally terminating a property insurance
contract, a property damage liability insurance contract or a liability
insurance contract, the insurer or the foreign non-life insurer’s branch shall
be responsible for indemnifying the insured if the policy event occurs before
the time of unilateral termination of the insurance contract, and may deduct
insurance premiums as agreed upon in the insurance contract.
2. When unilaterally terminating an insurance
contract as provided in clause 2 and 3 of Article 26 herein, the insurer or the
foreign non-life insurer’s branch shall be responsible for refunding insurance
premiums paid in advance for days left to the expiry date of the insurance
contract as agreed upon in the insurance contract. The insurer or the foreign
non-life insurer’s branch shall be responsible for paying insurance indemnity
or coverage as agreed upon in the insurance contract if the policy event occurs
before the time of unilateral termination of the insurance contract.
3. When unilaterally terminating a life insurance
contract involving cash surrender value in the cases stipulated in clause 1 and
2 of Article 26 herein, the insurer shall be obliged to pay the policyholder
the cash surrender value agreed in the insurance contract, unless otherwise
agreed by contracting parties.
4. When unilaterally terminating an insurance
contract as stipulated in clause 4 of Article 26 herein, the policyholder may
be refunded the cash surrender value or insurance premiums that he/she already
pays in advance in proportion to the days left to the expiry date of the policy
term, depending on specific types of insurance products. Where the property
value is less than technical provisions in the transferred portfolio of
insurance contracts, the refund that the policyholder receives shall be
calculated according to the proportion of property value to technical
provisions in the transferred portfolio of insurance contracts.
Article 28. Transfer of insurance contracts
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2. The transferee of the insurance contract must
have insurable benefits and may inherit rights and obligations from the
transferor.
3. The transfer of an insurance contract shall only
come into effect when the policyholder sends the written notice of such
transfer and the written consent is obtained from the insurer or the foreign
non-life insurer’s branch, except when the transfer is made according to
international practices or as agreed upon in the insurance contract.
Article 29. Responsibilities arising in case of
reinsurance
1. The insurer or the foreign non-life insurer’s
branch shall bear sole responsibility to the policyholder under the insurance
contract, even in case of reinsuring insured liabilities. The insurer or the
foreign non-life insurer’s branch shall not be allowed to refuse or delay their
assumption of responsibility to the policyholder, even when the reinsurer
defaults on their reinsurance payment obligations for liabilities reinsured.
2. The reinsurer shall not be permitted to request
the policyholder to pay insurance premiums directly to them, unless otherwise
agreed upon in the insurance contract.
3. The policyholder shall not be permitted to
request the policyholder to pay insurance premiums directly to them, unless
otherwise agreed upon in the insurance contract.
Article 30. Time limits for submission of
insurance claims
1. The time limit for submission of an insurance
claim under an insurance contract shall be 01 (one) year from the date of
occurrence of the policy event. The period
during which a force majeure event or circumstantial obstacle occurs shall not
make any increase in the time limit for filing an insurance claim.
2. Where the insured or the beneficiary proves that
they have no knowledge of the time of occurrence of the policy event, the time
limit specified in clause 1 of this Article may start from the day on which the
insured or the beneficiary has knowledge of occurrence of that policy event.
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Article 31. Time limits for payment of insurance
indemnity and coverage
1. In case of occurrence of the policy event, the
insurer or the foreign non-life insurer’s branch shall pay insurance indemnity
or coverage within the time limit agreed upon in the insurance contract. In the
absence of any agreement on the time limit, the insurer or the foreign non-life
insurer’s branch shall pay insurance indemnity or coverage within the time
limit of 15 days of receipt of all valid documents concerning request for
payment of insurance claims and coverage.
2. If the insurer or the foreign non-life insurer’s
branch makes late payment of insurance claims or coverage prescribed in clause
1 of this Article, the amount of interest on the overdue payment must be paid
in proportion to the period of late payment. The interest rate of the late
payment shall be determined according to the agreement between parties in accordance
with the Civil Code.
Article 32. Dispute resolution mechanism
Any dispute about an insurance contract shall be
resolved through negotiation between involved parties. In cases where such
negotiation fails, the dispute shall be settled through the mediation,
arbitration or court process as agreed upon in the insurance contract and
according to regulatory provisions.
Section 2. LIFE INSURANCE POLICIES AND HEALTH
INSURANCE POLICIES
Article 33. Subject matters
1. Human life and life expectancy is the subject
matters of a life insurance policy.
2. Human health is the subject matters of a health
insurance policy.
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1. The policyholder shall have insurable interests
for the following persons:
a) The policyholder himself;
b) The policyholder’s spouses, parents, offspring;
c) The policyholder’s biological siblings or other
persons who are in care or support relationships with the policyholder;
d) The persons having financial interests or labor
relations with the policyholder;
dd) Insured persons giving their written consent
for purchase of health insurance policies to the policyholder.
2. At the time of conclusion of an insurance
contract, the policyholder must have insurable interests.
Article 35. Time limits for consideration of
participation in insurance
For a term insurance contract lasting for more than
one year, within 21 days of receipt of the insurance contract, the policyholder
may refuse to continue to participate in insurance. Where the policyholder
refuses to continue to participate in insurance, the insurance contract shall
be terminated and the policyholder shall be refunded insurance premiums that
they have paid after deducting reasonable costs and expenses (if any) as agreed
upon in the insurance contract; the insurer shall not be obliged to pay
insurance indemnity or coverage in case of occurrence of a policy event.
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The insurer shall offer temporary coverage to the
policyholder upon receiving the insurance proposal and advance premiums from
the policyholder. Insurance term, sum insured and terms and conditions of
temporary coverage shall be negotiated between the insurer and the policyholder.
Temporary coverage is terminated after the insurer accepts or refuses
insurance, or unless otherwise agreed.
Article 37. Payment of life insurance premiums
1. The insurer can pay insurance premiums on a
one-off basis or in installments according to the time limit and approach
agreed upon in an insurance contract.
2. In the cases where insurance premiums are paid
in installments and the policyholder pays one or several installments of
insurance premiums, if the policyholder is unable to proceed to pay further,
the extended duration of payment of premiums shall be 60 days.
3. Parties can agree to restore the effect of the
insurance contract that is unilaterally terminated under clause 1 of Article 26
herein within 02 years of termination when the policyholder has paid
outstanding debts on insurance premiums.
4. Where the policyholder defaults on insurance
premiums or fails to pay insurance premiums in full, the insurer shall not be
allowed to arbitrarily deduct premiums from the surrender value of the
insurance contract without the policyholder’s consent, and take legal action to
request the policyholder to pay insurance premiums. This regulation shall not
apply in case of group insurance.
Article 38. Prohibition against request for
third-party reimbursement
Notwithstanding that the insured is deceased,
injured or sick due to direct or indirect acts of the third party, the insurer
or the foreign non-life insurer’s branch shall discharge their obligation to
pay insurance indemnity or coverage as agreed upon in the insurance contract
without having the right to request the third party to reimburse the amount
that the insurer or the foreign non-life insurer’s branch has already paid to
the beneficiary. The third party shall still have the burden of paying
indemnity to the insured under law.
Article 39. Conclusion of life insurance
contracts and health insurance contracts insuring the death of other person
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2. Conclusion of a life insurance contract and
health insurance contract insuring the death of the following persons shall be
prohibited:
a) Minors, except as agreed in writing by their
parents or guardians;
b) People incapable of civil acts;
c) Persons who have cognitive and impulse control
difficulties;
d) People with restricted capabilities of civil
acts.
1. Insurers and foreign non-life insurers’ branches
shall not be exempted from paying insurance indemnity and coverage in the
following cases:
a) The insured is deceased within 02 years of the
first payment of premium or restoration of the insurance contract’s effect;
b) The insured’s death is caused willfully and
intentionally by the policyholder or the beneficiary, except as prescribed in
clause 2 of this Article;
c) The insured’s permanent injury or impairment is
caused willfully and intentionally by the insured himself, the policyholder or
the beneficiary, except as prescribed in clause 2 of this Article;
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dd) Other cases are stipulated in the insurance
contract.
2. In the cases where there are more than one
beneficiary, despite the fact that one or more beneficiaries intentionally
cause death or permanent injury or impairment for the insured, the insurer or
the foreign non-life insurer’s branch shall have the burden of paying insurance
indemnity or coverage to the other beneficiaries under contractual terms and
conditions.
3. When any situation specified in clause 1 of this
Article arises, the insurer or the foreign non-life insurer’s branch shall pay
the policyholder the surrender value of the insurance contract or all of the
premiums already paid after deducting any reasonable costs and expenses as
agreed upon in the insurance contract, except as provided in clause 2 of this
Article. In case of the death of the policyholder, all of the refunds shall be
treated according to law on inheritance.
1. The policyholder shall have the right to
designate the beneficiary, except group insurance contracts. If the
policyholder is not the insured, the policyholder must obtain the written
consent for designation of the beneficiary from the insured; if the insured is
a minor or is incapable of civil acts or faces cognitive or impulse control
problems or has restricted capabilities of civil acts, in order to designate a
beneficiary, the approval from his/her legal representative must be sought.
2. If there are multiple beneficiaries, the persons
entitled to designate beneficiaries as referred to in this Law may determine
the beneficiary line or order of precedence or the percentage of benefit that
each beneficiary can enjoy. If not doing so, all beneficiaries may be entitled
to the equal percentage of benefit.
3. The policyholder can change any beneficiary
provided that the written consent for such change from the insured is obtained,
and the insurer or the foreign non-life insurer’s branch is informed in writing
beforehand of such change. If the insured is a minor or incapable of civil acts
or faces cognitive or impulse control problems or has restricted capabilities
of civil acts, in order to change a beneficiary, the approval from his/her
legal representative must be sought. The insurer or the foreign non-life
insurer’s branch must give their certification in the insurance contract or the
document attached hereto after receiving the notice of such change from the
policyholder.
1. Group insurance contract is the arrangement
between the policyholder and the insurer or the foreign non-life insurer’s
branch that is made to offer insurance on the insured group members under the
same insurance contract.
2. A group of members participating in the
insurance contract must be the group set up not to serve the purpose of
participation in insurance.
3. The policyholder and the insured may negotiate
for the joint payment of premiums.
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5. The policyholder, the insurer or the foreign
non-life insurer’s branch shall have the right to amend and supplement the
group insurance contract in the following cases:
a) At least one insured person is no longer the
group member;
b) Insurance premiums specific to the insured
persons are not paid under terms and conditions of the insurance contract;
c) Other cases are agreed upon in the insurance
contract.
6. In addition to those regulations laid down in
Article 17 herein, a group insurance contract must contain the followings:
a) Conditions for participation in insurance to be
applied to the insured;
b) Conditions and procedures for transformation
into the individual insurance contract.
Section 3. PROPERTY INSURANCE CONTRACTS,
PROPERTY DAMAGE LIABILITY INSURANCE CONTRACTS
1. The property or assets stipulated in the Civil
Code are the subject matters of a property insurance contract.
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1. Under a property insurance contract, the
policyholder has insurable interests when acquiring the ownership right; other
rights to property or assets; right of possession and use of the non-owner.
2. Under a damage liability insurance contract, the
policyholder has insurable interests when they have financial interests; assume
financial obligations and liabilities; incur economic losses towards the
subject matters insured.
3. At the time of occurrence of insured losses, the
policyholder or the insured must have insurable interests.
The sum insured is the amount of money that a
policyholder and an insurer or foreign non-life insurer’s branch are agreed
upon in the insurance contract to provide insurance for property or assets and
against losses upon the policyholder’s request as per this Law.
1. The policyholder is bound to notify the insurer
or the foreign non-life insurer’s branch when having the knowledge of an
occurrence within the time limit agreed upon in the insurance contract. Where
the policyholder fails to comply with the obligation of notification or gives
late notification, the insurer or the foreign non-life insurer’s branch can
deduct the amount of money that must be paid as insurance in proportion to
losses that the insurer or the foreign non-life insurer’s branch incurs, except
in force majeure events or objective obstacles.
2. The insurer or the foreign non-life insurer’s
branch is not allowed to apply the regulations laid down in clause 1 of this
Article if the insurance contract does not have any terms and conditions
relating to liabilities of the policyholder, sanctions against failure to
comply with the obligation of notification or the deferred notification of the
policy event.
1. An overinsurance contract is the contract where
the sum insured is greater than the market value of the insured property at the
time of conclusion of the contract. The insurer, the foreign non-life insurer’s
branch and the policyholder shall not be allowed to deliberately enter into an
overinsurance contract.
2. Where an overinsurance contract is concluded
through the policyholder’s intentional fault, the following actions shall be
taken:
a) If there is no policy event that occurs, the
insurer or the foreign non-life insurer’s branch shall repay the policyholder
the amount of premiums paid in advance in proportion to the sum insured in
excess of the market value of the insured property at the time of conclusion of
the insurance contract after deducting reasonable costs and expenses (if any)
as agreed upon in the insurance contract;
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1. An underinsurance contract is the contract where
the sum insured is less than the market value of the insured property at the
time of conclusion of the contract.
2. When entering into a property underinsurance
contract, the insurer or the foreign non-life insurer’s branch shall pay losses
in proportion to the sum insured and the market value of the insured property
at the time of conclusion or as agreed upon in the insurance contract.
1. A double insurance contract is the situation
where there are at least two insurance contracts that provide insurance in the
same scope of insurance, for the same subject matter, during the same policy
term and against the same insured event, and total sum insured of these
insurance contracts exceeds the market value of the insured property at the
time of conclusion of the insurance contracts.
2. After entering into a double insurance contract,
in case of occurrence of a policy event, the amount of the indemnity in each
insurance contract is calculated according to the relevant proportion of the
agreed sum insured to total of the sums insured in all insurance contracts that
the policyholder enters into. Total of the indemnities of all insurance
contracts shall not be greater than the actual loss of the insured property.
The insurer or foreign non-life insurer’s branch
can disclaim indemnification responsibility for the insured property damaged
due to normal wear and tear or inherent vice or nature of that property, unless
otherwise agreed upon in the insurance contract.
1. The amount of indemnity that the insurer or the foreign
non-life insurer’s branch must pay the insured is calculated on the basis of
the market value of the insured property at the time and place of occurrence of
loss or damage and actual loss percentage, unless otherwise agreed upon in the
insurance contract. Costs and expenses incurred from determination of the
market value and loss percentage shall be covered by the insurer or the foreign
non-life insurer’s branch.
2. The amount of indemnity that the insurer or the
foreign non-life insurer’s branch pays the insured shall not be greater than
the sum insured, unless otherwise agreed upon in the insurance contract.
3. In addition to paying indemnity, the insurer or
the foreign non-life insurer’s branch shall pay the insured necessary or
reasonable expenses agreed upon in the insurance contract to provide and hedge
against losses, and claims-arising expenses that the policyholder or the
insured must incur to follow the instructions of the insurer or foreign
non-life insurer’s branch.
1. The policyholder and the insurer or the foreign
non-life insurer’s branch can agree on one of the following methods:
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b) Replacing the damaged property with another
equivalent one;
c) Paying indemnity.
2. If the insurer, the foreign non-life insurer’s
branch and the policyholder are unable to agree on the method of providing
indemnity, cash indemnity can be paid.
3. Where either or both of the indemnification
methods specified in point b and c of clause 1 of this Article is used, the
insurer or the foreign non-life insurer’s branch shall be entitled to keep the
damaged property after replacing it with another equivalent one or paying the
indemnity in full according to the market value of the insured property.
1. In case of the policy event that occurs, the
insurer or the foreign non-life insurer’s branch or the person authorized by
the insurer or the foreign non-life insurer’s branch shall conduct the
assessment of loss and damage in order to determine the causes and levels of
loss or damage. Costs and expenses incurred from the loss assessment process
shall be covered by the insurer or the foreign non-life insurer’s branch.
2. Where contracting parties fail to reach any
agreement on the causes and levels of loss or damage, independent assessors may
be hired by mutual consent, unless otherwise agreed upon in the insurance
contract. Where the contracting parties disagree on hiring of the independent
assessor, one of the parties may request the Court having relevant jurisdiction
or the Arbitrator to solicit the independent assessor for their assessment
feedback. The independent assessor’s conclusions or consultative opinions shall
be binding upon concerned parties.
1. In a policy event that occurs, if the third
party carried the burden of paying compensation for any loss or damage to the
insured, the following actions shall be taken:
a) After the insurer or foreign non-life insurer’s
branch completes their payment of the insured’s insurance claim, the insured
shall assign the right to claim reimbursement from the third party for that
insurance claim to them;
b) The insurer or the foreign non-life insurer’s
branch may deduct the amount of insurance claim, depending on how serious the
insured’s fault is, if the insured refuses to the right to claim for
reimbursement from the third party.
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3. The insurer or the foreign non-life insurer’s
branch is not allowed to request the insured’s parent, spouse or offspring to
reimburse the insurance claim that they pay the insured, except as these
requested kin cause any loss or damage through their intentional fault.
1. The insured shall be bound to comply with fire
prevention and control; occupational safety and hygiene; and other regulations
of relevant law in order to ensure their safety.
2. Insurers and foreign non-life insurer’s branches
shall have the right to inspect safety conditions for the insured or advise and
request the insured to apply measures to provide and hedge against risks.
3. Where the insured fails to apply safety measures
to provide sufficient protection for the subject matter insured, insurers and
foreign non-life insurer’s branches shall have the right to set the deadline
for the insured’s execution of these measures. After such deadline, if the
insured fails to comply, insurers and foreign non-life insurer’s branches shall
reserve the right to increase insurance premiums or unilaterally terminate the
insurance contract.
In case of any loss or damage that occurs, the
insured shall not be allowed to abandon the insured property and shall apply
necessary measures within their competence to prevent or minimize loss or
damage, unless otherwise prescribed in law or agreed upon by parties.
The subject matter of a liability insurance
contract is the civil liability of the insured towards the third party under
the regulatory provisions of law.
1. Responsibilities of the insurer or the foreign
non-life insurer arise only when the third party requests the insured to pay
them compensation for any loss or damage occurring within the policy term.
2. The third party shall not be entitled to
directly demand compensation from the insurer or the foreign non-life insurer’s
branch, unless otherwise provided by law.
1. The limit of liability is the amount of money
that an insurer or a foreign non-life insurer’s branch is bound to pay to the
insured under terms and conditions of the insurance contract.
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3. In addition to paying the insurance claim as per
clause 2 of this Article, the insurer or the foreign non-life insurer’s branch
is bound to pay expenses related to the resolution of disputes over liability
towards the third party, together with any interest payable to the third party
that is charged on the insured’s late payment of the compensation claim
according to the instructions of the insurer or the foreign non-life insurer’s
branch.
4. Total amount of insurance claim paid by the
insurer or the foreign non-life insurer’s branch as per clause 2 and 3 of this
Article must fall within the limit of liability, unless otherwise agreed in the
insurance contract.
5. Where the insured is required to provide a
pledge or security deposit to ensure that the insured property is not
forfeited; or taking legal action in court is not required, upon the request of
the insured and under the insurance contract, the insurer or the foreign
non-life insurer’s branch shall be obliged to provide a pledge or security
deposit within the limit of liability that they insure against.
Insurers and foreign non-life insurers’ branches
shall have the right to act on behalf of the insured persons to negotiate with
the third party about the amount of compensation for loss or damage, unless
otherwise agreed upon in insurance contracts.
As requested by the insured, insurers or foreign
non-life insurers’ branches can directly pay insurance claims to the insured or
pay compensation to the third parties suffering insured loss or damage.
Chapter III
INSURANCE COMPANIES, REINSURANCE COMPANIES, FOREIGN
INSURANCE BRANCHES IN VIETNAM
Section 1. BUSINESS PERMITS AND LICENSES
1. Joint-stock company.
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1. Insurers and foreign non-life
insurers’ branches can be involved in the following range or area of business
activities:
a) Insurance, reinsurance or
reinsurance cession business;
b) Management of funds and
investment of funds generated in the insurance industry;
c) Provision of insurance
ancillary services;
d) Other activities directly
related to the insurance industry.
2. Reinsurance companies and
foreign reinsurance branches can be involved in the following range or area of
business activities:
a) Reinsurance, reinsurance
cession sector;
b) Management of funds and investment of funds
generated from rendering reinsurance services;
c) Other activities directly related to reinsurance
services.
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a) Non-life insurance companies are involved in the
health insurance sector;
b) Non-life insurance companies and foreign
non-life insurance branches are involved in business of health insurance
products, each of which has the maximum insurance term of 01 year, and casualty
insurance products, each of which has the maximum insurance term of 01 year;
c) Health insurance companies are involved in
business of casualty insurance products, each of which has the maximum
insurance term of 01 year.
1. Licensing conditions concerning founding
shareholders or members:
a) In order to obtain business licences or permits,
entities and persons applying for these licenses or permits must have the
rights of business incorporation and management in Vietnam under the Corporate
Law;
b) In order to obtain business licences or permits,
entities applying for these licenses or permits need to have legal personality
and is operating in Vietnam; if each entity makes at least 10% of capital
contribution, they must ensure that they generate profits within 03 consecutive
fiscal years immediately before the date of submission of application packages
for these licenses or permits, and must meet financial conditions in accordance
with the Government’s regulations;
c) In order to obtain business licences or permits,
insurers and reinsurers previously licensed for their establishment and
operation in Vietnam that contribute capital to set up insurance companies; new
reinsurers must generate business profits during 03 consecutive years immediately
before the date of submission of application packages for these licenses and
permits, and must meet the prudential ratio or the minimum required capital
requirement specified herein.
2. Licensing conditions concerning capital or
assets:
a) The amount of Vietnamese-dong contribution to
the charter capital must not be less than the minimum required amount of
charter capital under the Government’s regulations;
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3. Licensing conditions concerning personnel: Any
nominee for a Chairperson of the Board of Directors or Chairperson of the Board
of Members, Director or General Director, legal representative or actuary in an
entity applying for such business licence and permit must meet managerial
competency and qualification conditions and standards prescribed in Article 81
herein.
4. The applicant for such business licence and
permit must choose their business type in accordance with this Law and must
have the draft charter conforming to the regulations of the Corporate Law.
The founding member of an
insurance limited liability company or a reinsurance limited liability company
must be an entity and meet general licensing conditions prescribed in Article
64 herein and the following conditions:
1. Regulatory conditions for
eligibility as the capital-contributing entity established under foreign law:
a) It must be a foreign insurance
company, reinsurance company or finance and insurance corporation;
b) It must obtain certification
from a foreign competent regulatory authority that, as a foreign insurance
company, reinsurance company or finance and insurance corporation, it has not
committed any serious offence against domestic legislation on insurance
business of the country where their head office is located during 03
consecutive years immediately before the time of submission of application
packages for such license or permit;
c) The business sector in which it
proposes to get involved in Vietnam must comprise business activities that the
foreign insurance company, reinsurance company or finance and insurance
corporation applying for the license or permit is directly performing, or their
subsidiaries are performing, within the latest 07 consecutive years;
d) It must own the minimum total
asset of USD 02 billion in the year immediately preceding the year of
submission of application packages for such business license or permit;
dd) It must be committed to
offering financial, technological, corporate management, risk management,
governance and operational support for the insurance company or reinsurance
company to be incorporated in Vietnam; must ensure that the insurance company
or reinsurance company-to-be complies with regulatory provisions concerning
compliance with financial prudence and risk management requirements laid down
herein;
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2. In order to meet the licensing
conditions, each economic organization established under Vietnam’s law must own
their minimum total asset of VND 2,000 billion in the year immediately before
the year of application for such business license or permit;
3. Pursuant to the regulations
laid down in point d of clause 1 and 2 of this Article, the Government shall
impose detailed regulations on the minimum required total assets varying over
periods of time.
Article 66. Regulatory
conditions concerning the structure of shareholders contributing capital to
establish insurance joint-stock companies and reinsurance joint-stock companies
In order to establish an insurance
joint-stock company or reinsurance joint-stock company, in addition to
conforming to the licensing conditions specified in Article 64 herein, the
following conditions must be satisfied:
1. There must be at least two
shareholders that are entities and each of which meets the following
conditions:
a) Their equity contribution must
make up at least 10% of the charter capital of the insurance company or the
reinsurance company-to-be;
b) The conditions specified in
Article 65 hereof must be satisfied;
2. An individual shareholder’s
equity contribution shall not exceed 10% of the charter capital of the
insurance company or reinsurance company-to-be.
1. In order to obtain a license or
permit to establish a branch in Vietnam, a non-life insurance company or a
foreign insurance company must meet the following conditions:
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b) The foreign state insurance
authority of the place where the parent company’s head office is located gives
permission to establish their branch in Vietnam that can render authorized
insurance services;
c) It must acquire at least 07
years’ experience in the proposed business activities that it is applying for
the license or permit to perform in Vietnam;
d) Their minimum required total of
assets must conform to the conditions specified in point d of clause 1 and 3 of
Article 65 herein;
dd) It generates profits during 03
consecutive fiscal years immediately before the time of submission and must
meet financial conditions prescribed in the Government’s regulations;
e) It must provide guarantee and
bear responsibility for all obligations and commitments of their branch in
Vietnam.
2. The branch of a foreign
non-life insurance company or a foreign reinsurance company to be established
and operate in Vietnam must meet the following conditions:
a) The minimum allocated amount of
Vietnamese-dong funds must not be less than the minimum limit prescribed in the
Government’s regulations;
b) Funding for establishment of
the branch must be legitimate and not include borrowed funds or investment
funds held in trust in any form;
c) The branch’s nominated Director
and actuaries must meet managerial competency and professional qualification
conditions and standards specified in Article 81 herein.
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Foreign investors may have the
ownership interest in shares or contributed capital that makes up as high as
100% of the charter capital of an insurance company or reinsurance company.
Each set or package of application
documents for a business licence or permit must be comprised of the followings:
1. Form of request or application
for the business license or permit;
2. The draft charter of an
insurance company or reinsurance company; the draft regulations on organization
and operation of the foreign branch in Vietnam;
3. Business plan to be executed in
the first five years. The plan must specify recommended insurance services,
risk management model, technical provisioning method, reinsurance scheme,
investment of funds, solvency of the insurance company, the reinsurance company
or foreign branch in Vietnam;
4. Resume, police record,
duplicate copy of certificate or qualification indicating professional
competency and expertise of the nominee for the Chairperson of the Managing
Board or the Chairperson of the Board of Members, Director or General Director,
legal representative or actuary;
5. Rate of contributed capital and
method of contributing capital; list of founding entities or persons or members
or shareholders that intend to contribute at least 10% of the charter capital,
and documents evidencing compliance with conditions relevant to specific
business types of insurance company, reinsurance company, foreign branch in
Vietnam referred to in Article 64, 65, 66 and 67 of this Law that the
institutional or individual applicant chooses to operate;
6. List of beneficial owners of
the insurance company or reinsurance company applying for such license or
permit. The Government shall establish criteria for determining beneficial
owners of insurance companies and reinsurance companies.
1. Within 60 days of receipt of
the valid application package, the Ministry of Finance shall decide whether a
business license or permit is issued. In case of refusal to issue the business
licence or permit, the written notice clearly stating reasons for such refusal
must be issued.
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1. Business license or permit is also the business
registration certificate.
2. The Ministry of Finance shall be vested with
authority to issue, reissue, revise, amend or revoke business licenses or
permits; suspend part or all of business activities of insurance companies,
reinsurance companies or foreign branches in Vietnam in accordance with this
Law and other regulatory provisions of relevant law.
3. After issuance, revision, amendment or
revocation of business licenses or permits, the Ministry of Finance shall have
the burden of issuing the written notification of these acts in order for
registration agencies of the provinces where insurance companies, reinsurance
companies or foreign branches in Vietnam are based to keep the National
Information System for business registration updated.
4. The Government shall impose detailed regulations
regarding application procedures and documentation requirements for issuance,
reissuance, revision, modification or revocation of business licenses or
permits; suspension of part or all of business activities of insurance
companies, reinsurance companies and foreign branches in Vietnam.
1. The Ministry of Finance shall make information
about business licences of insurance companies, reinsurance companies or
foreign branches in Vietnam available to the public on the Web Portal of the
Ministry of Finance within 30 days of issuance of these business licenses or
permits.
2. At least 30 days before their business is
officially commenced, licensed insurance companies, reinsurance companies or
foreign branches in Vietnam must post the most updated information about
business licenses or permits and the proposed date of official business on a
print newspaper in three successive issues or on an electronic newspaper of
Vietnam.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam must officially commence their business within 12
months of issuance of business licenses or permits, except in case of force
majeure events or circumstantial obstacles. In case of force majeure events or
circumstantial obstacles, insurance companies, reinsurance companies and foreign
branches in Vietnam must report on such unexpected events in writing and
receive the written consent to extension of the time limit for commencement of
their official business from the Ministry of Finance; the extension of the time
limit for commencement of official business shall not be longer than 12 months.
2. An insurance company, reinsurance company or
foreign branch in Vietnam must meet the following regulations to officially
commence their business:
a) Transform funds kept in their escrow account
into charter capital or allocation;
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c) Issue internal rules and regulations regarding
operations management and governance; internal rules and regulations on risk
management and other basic operational procedures in accordance with law;
d) Provide security deposit in full prescribed in
this Law at commercial banks that are active in Vietnam;
dd) Have their office, facilities, technical
utilities and technological systems tailor-made for operations processes in the
insurance industry;
e) Publicly communicate and disseminate information
about their business license or permit as provided in clause 2 of Article 72
herein.
3. Insurance companies, reinsurance companies or
foreign branches in Vietnam must notify the Ministry of Finance of their
compliance with the regulations laid down in clause 2 of this Article at least
15 days before their business is officially commenced. The Ministry of Finance
shall be accorded authority to cease the official business commencement of
insurance companies, reinsurance companies or foreign branches in Vietnam when
regulations laid down in clause 2 of this Article are not satisfied yet.
4. Insurance companies, reinsurance companies and
foreign branches in Vietnam shall not be allowed to perform any insurance
transactions before the official commencement date.
1. Insurance companies,
reinsurance companies or foreign branches in Vietnam need to seek the written
approval of any change in the following information from the Ministry of
Finance:
a) Their name or their head
office’s address;
b) Amount of charter capital;
allocated capital;
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d) Assignment of shares or
ownership interests that help shareholders or members contributing capital to
own at least 10% of their charter capital, or cause shareholders or members
contributing capital to own less than 10% of their charter capital;
dd) Chairperson of the Managing
Board or Chairperson of the Board of Members, Director or General Director or
the Actuary;
e) Split-up, split-off, merger,
amalgamation, dissolution of or transformation into other business type or type
of business ownership;
g) Outward investment, including
the establishment of new branches, representative offices, and other types of
commercial establishment in foreign countries.
2. Within 10 days of receipt of
the written consent to any change prescribed in clause 1 of this Article from
the Ministry of Finance, the Ministry of Finance shall be responsible for
posting updated information on the Web Portal of the Ministry of Finance.
3. Insurance companies,
reinsurance companies or foreign branches in Vietnam need to notify the
Ministry of Finance in writing within 15 days after making the following
changes:
a) Changes in the charter of the
insurance company or reinsurance company; rules and regulations for operations
of the foreign branch in Vietnam;
b) Opening, closing or change of
location of the branch or representative office of the insurance company or the
reinsurance company;
c) Opening, closing or change of
the business location;
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4. The Government shall impose
detailed regulations regarding conditions, application procedures,
documentation requirements and processes for approval of changes referred to in
point b of clause 3 of this Article.
1. The business license or permit
of an insurance company, reinsurance company or foreign branch in Vietnam shall
be revoked in the following cases:
a) Application for the business
license or permit contains fraudulent information provided with the aim of
satisfying licensing conditions;
b) They do not officially commence
their business after the expiry date of official commencement of their business
prescribed in clause 1 of Article 73 herein;
c) They are split up, split off,
amalgamated, resolved or closed;
d) Their business activities are
not the same as those specified in the business license or permit that they are
holding;
dd) The insurance company or
reinsurance company is declared bankrupt by the Court’s judgement;
e) The foreign non-life insurance
company or the foreign reinsurance company that has their branches established
in Vietnam goes bankrupt or has their business license or permit withdrawn or
revoked.
2. When having their business
licence or permit withdrawn or revoked as stipulated in point a, c, d and e of
clause 1 of this Article, the affected insurance companies, reinsurance
companies and foreign branches in Vietnam must immediately cease the conclusion
of new insurance contracts or reinsurance contracts; the affected insurance
companies and branches of foreign non-life insurance companies must transfer
the portfolio of insurance contracts; the transfer of the portfolio of
insurance contracts shall not be permitted in case of insurance contracts that
are made null or void as provided in this Law.
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1. Foreign insurance companies;
foreign reinsurance companies; foreign finance and insurance corporations;
foreign insurance brokerage companies may establish representative offices in
Vietnam. Foreign representative offices in Vietnam are dependent units of
foreign insurance companies; foreign reinsurance companies; foreign finance and
insurance corporations; foreign insurance brokerage companies, and shall not be
allowed to conduct insurance business in Vietnam.
2. Foreign representative offices
in Vietnam may perform the following functions:
a) Perform the function of a
contact office;
b) Conduct market researches;
c) Promote the development of
investment projects of foreign insurance companies; foreign reinsurance
companies; foreign finance and insurance corporations; foreign insurance
brokerage companies in Vietnam;
d) Promote and monitor the
implementation of projects financed by foreign insurance companies; foreign
reinsurance companies; foreign finance and insurance corporations; foreign
insurance brokerage companies in Vietnam;
dd) Perform other activities in
compliance with domestic law of Vietnam.
3. The life of a foreign
representative office in Vietnam shall not be longer than 05 years and may be
extended.
4. Reporting on performance,
notifying changes and publicly announcing foreign representative offices in
Vietnam shall be subject to the regulations of the Minister of Finance.
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a) Perform their minimum business
functions in the latest five years;
b) Obtain permission to establish
representative offices in Vietnam from the insurance regulatory authorities in
the foreign countries where their head offices are located.
2. The Government shall impose
detailed regulations on conditions, application procedures, documentation
requirements and processes for issuance, reissuance, revision, supplementation,
modification, extension, termination and revocation of licenses or permits for
establishment of representative offices in Vietnam.
3. The Ministry of Finance shall
be vested with authority to issue, reissue, revise, modify, supplement, extend
and revoke or withdraw licenses or permits to establish foreign representative
offices in Vietnam, and close or terminate operation of foreign representative
offices in Vietnam.
1. The domestic-side structure of
an insurance company or reinsurance company shall consist of their head office,
branch(es), representative office(s) and business location(s).
2. The foreign-side structure of
an insurance company or reinsurance company shall consist of their branch(es),
representative office(s) and other types of commercial establishment under
regulatory provisions of law.
3. The organizational structure of
a foreign branch in Vietnam shall consist of their head office and business
location(s).
1. Insurance joint-stock companies
and reinsurance joint-stock companies may decide on either of the two
governance structures:
a) Shareholders’ General Meeting,
Managing Board, Supervisory Board, Director or General Director. A Supervisory
Board consists of 03 – 05 controllers under the regulatory provisions of the
Company’s Charter;
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2. Insurance limited liability
companies and reinsurance limited liability companies shall decide on using the
corporate governance structure consisting of the Board of Members, Director or
General Director. Insurance companies and reinsurance companies may make their
own decisions to set up Supervisory Boards in accordance with law.
1. A manager of an insurance
company or reinsurance company can hold the following posts:
a) Chairperson of the Managing
Board, Member of the Managing Board; Chairperson of the Board of Members,
Member of the Board of Members;
b) Director or General Director,
Vice Director or Deputy General Director, Legal Representative;
c) Chief Accountant, Director of a
branch, Head of a representative office, Head of an operations department and
the like under the Company’s Charter.
2. A manager of a foreign branch
in Vietnam can hold the following posts:
a) Director, Deputy Director;
b) Chief Accountant, Head of an
operations department and the like under the rules and regulations on
organization and operation of foreign branches in Vietnam.
3. A controller of an insurance
company, reinsurance company or foreign branch in Vietnam shall exercise
his/her freedom of making decisions related to insurance services or
operations, and can hold the following posts:
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b) Head of the risk management
department, Head of the compliance management department, Head of the internal
audit department;
c) Actuary.
4. Insurance companies, reinsurance companies and
foreign branches in Vietnam must keep at least two titles, including Director
and Actuary or General Director and Actuary. Where any change is needed, within
the maximum period of 75 days from the date of discharge from the title of
Director or General Director or Actuary, insurance companies, reinsurance
companies and foreign branches in Vietnam must apply to seek the Ministry of
Finance’s approval of new Director and Actuary or General Director and Actuary.
1. General requirements and standards:
a) Reserve the corporate governance rights
prescribed in the Corporate Law;
b) Not be subject to any penalty for administrative
violations arising in the insurance industry; not be disciplined in the form of
dismissal for any of their violations against internal regulatory procedures
for handling work within 03 consecutive years before the appointment date; not
be the object of the decisions on initiation of legal proceedings under the regulatory
provisions of law at the election or appointment time.
2. Specific requirements and standards of the
Chairperson of the Managing Board, the Chairperson of the Board of Member; the
Member of the Managing Board, the Member of the Board of Members:
a) Satisfy the general requirements and standards
specified in clause 1 of this Article;
b) Hold at least an undergraduate degree;
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3. Specific requirements and standards of the
Director, General Director and Legal Representative:
a) Satisfy the general requirements and standards
specified in clause 1 of this Article;
b) Hold at least an undergraduate degree in the
insurance major. If not, he/she must hold at least an undergraduate degree in
any other major and must complete the practicing certificate in the insurance
industry conferred by an legally-licensed domestic or foreign insurance
training institution;
c) Have at least 05 years’ experience of working in
the insurance, finance or banking sector, including 03 years’ experience of
holding the post as a manager or controller of an insurance company,
reinsurance company or foreign branch;
d) Reside in Vietnam during his/her term in office.
4. Specific requirements and standards of the
managers other than those specified in clause 2 and 3 of this Article of an
insurance company, reinsurance company or foreign branch in Vietnam:
a) Satisfy the general conditions and standards
specified in clause 1 of this Article;
b) Hold at least an undergraduate decree on the
insurance major. If not, he/she must hold at least an undergraduate degree in
any other major and must complete the practicing certificate in the insurance
services within the employing enterprise’s scope of business is issued by
legally-licensed domestic or foreign insurance training institutions;
c) Spend at least 03 years on working in the
insurance, finance or banking sector or holding the post for which he/she is
recommended in the past. In particular, the nominee for a head of an operations
department must have at least 03 years’ experience of working in the insurance,
finance or banking sector or holding the post for which he/she is recommended;
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5. Controllers of insurance companies, reinsurance
companies or foreign branches in Vietnam are required to satisfy the general
conditions and standards referred to in clause 1 of this Article and others
prescribed in the Government’s regulations.
6. The Minister of Finance shall elaborate point b
of clause 3 and point b of clause 4 of this Article, and impose detailed
regulations regarding training curriculum or program, application requirements,
procedures and processes for certification testing, issuance, revocation,
withdrawal and reissuance of insurance practising certificates issued by
legally-licensed domestic insurance training institutions.
1. Chairperson of the Managing Board, Chairperson
of the Board of Members or Member of the Managing Board, Member of the Board of
Members of an insurance company or reinsurance company cannot concurrently hold
the post as the Member of the Managing Board or the Member of the Board of
Members of another insurance company or reinsurance company in the same life
insurance, non-life insurance, health insurance or reinsurance sector in
Vietnam.
2. Director or General Director of an insurance
company, reinsurance company or foreign branch in Vietnam cannot concurrently
work for another insurance company, reinsurance company or foreign branch in
the same life insurance, non-life insurance, health insurance or reinsurance
sector in Vietnam.
3. Director or General Director, Director of a
branch or Head of a representative office of an insurance company or
reinsurance company can hold only one more post like the Director of a branch
or the Head of a representative office or the Head of an operations department
in the same insurance company or reinsurance company. The Director of a foreign
branch in Vietnam is the legal representative and can hold only one more post
as the Head of an operations department of that branch.
4. Meanwhile, the Actuary, Head of the risk
management department or Head of the compliance department of an insurance
company, reinsurance company or foreign branch in Vietnam shall not be allowed
to hold any other executive post at the same host entity; shall not be allowed
to concurrently work for any other insurance company, reinsurance company or
foreign branch in Vietnam. The Actuary must perform the duties assigned by the
Minister of Finance.
5. The Head of the Supervisory Board or the
Controller shall not be allowed to hold any other executive post at the same
host entity. The Head of the Supervisory Board cannot concurrently hold another
post as the Controller or manager of any other insurance company or reinsurance
company operating in Vietnam.
6. The Chief Accountant, Head of the internal audit
department in an insurance company, reinsurance company or foreign branch in
Vietnam shall not be allowed to hold any other post in the same host entity;
shall not be allowed to concurrently work for any other insurance company,
reinsurance company or foreign branch in Vietnam.
1. The Ministry of Finance shall be accorded
authority to termination or temporarily suspend the enforcement of rights and
obligations of the Chairperson of the Managing Board, Chairperson of the Board
of Members, Director or General Director or Actuary of an insurance company,
reinsurance company, foreign branch in Vietnam if he/she commits any violation
against the office-holding principles stipulated in Article 82 herein, or no
longer meets eligibility requirements and standards prescribed in Article 81
herein.
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3. Persons whose rights and obligations are
terminated or temporarily suspended as per clause 1 of this Article shall be
responsible for being involved in the process for handling of issues and
violations concerning personal liabilities upon the request of insurance
companies, reinsurance companies or foreign branches in Vietnam.
4. The Government shall impose detailed regulations
on termination and temporary suspension of execution or enforcement of rights
and obligations of the Chairperson of the Managing Board, Chairperson of the
Board of Members, Director or General Director and Actuary that are prescribed
in clause 1 and 2 of this Article.
1. Insurance companies, reinsurance companies or
foreign branches in Vietnam must conduct the intracorporate control or
supervision in order to ensure compliance with the following requirements:
a) Effectiveness and safety in all operations and
security, management and utilization of corporate property and resources;
b) Honesty, reasoning, adequacy, timeliness in
financial and executive information systems;
c) Compliance with law, internal rules, regulations
and procedures.
2. Insurance companies, reinsurance companies or
foreign branches in Vietnam must formulate internal control standards,
procedures and procedures; must ensure that managers, controllers,
superintendents, employees or staff members clearly understand and strictly
comply with them.
3. Internal control activities of insurance
companies, reinsurance companies or foreign branches in Vietnam must be
assessed annually through the internal audit processes.
4. The Minister of Finance shall elaborate on this
Article.
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2. Each year, insurance companies, reinsurance
companies or foreign branches in Vietnam must take the following internal audit
actions:
a) Review and assess control and risk management
activities in an independent and objective manner;
b) Conduct the arm’s-length assessment of relevance
and compliance with internal rules, regulations, policies, procedures and
processes that have already been made available for use within insurance
companies, reinsurance companies or foreign branches in Vietnam;
c) Make requests for actions to be taken to correct
or mitigate errors or defects, and give recommendations about solutions to
perfecting and improving effectiveness in internal systems, procedures, rules
and regulations, contributing to ensuring that insurance companies, reinsurance
companies and foreign branches in Vietnam do business safely, effectively and
legally.
3. Findings or results of internal audit
engagements of or by insurance companies or reinsurance companies must be
reported on time to Managing Boards, Boards of Members and sent to Directors or
General Directors thereof.
Findings or results of internal audit engagements
of or by foreign branches in Vietnam must be reported on time to parent foreign
non-life insurers, foreign reinsurers, and sent to Directors thereof.
4. The Minister of Finance shall elaborate on this
Article.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam shall have responsibility to establish risk
management systems performing the functions of determining, measuring,
assessing, reporting and controlling risks arising from business activities in
an effective manner.
2. Risk management of and by insurance companies,
reinsurance companies and foreign branches in Vietnam must satisfy the
following requirements:
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b) Clarify roles and responsibilities of specific
departments and persons involved in the risk management process and risk
management structure;
c) Adopt explicit and transparent risk management
policies that clearly identify material and other associated risks arising from
business activities, risk appetite and management methods specific to types of
risk. Before being put to use, the approval for risk management policies must
be sought from Managing Boards, Boards of Members of insurance companies,
reinsurance companies; foreign non-life insurance companies or foreign
reinsurance companies that own or control foreign branches in Vietnam;
d) Formulate the full set of risk acceptance
criteria to be applied to specific material or other associated risks, allowing
for correlation between these risks. Risk acceptance criteria must be aligned
with risk management policies, business strategies, human resources and
information technology facilities;
dd) Formulate the complete procedures for risk
management, including supervision, handling and response steps against any risk
changes.
3. On an annual basis, insurance companies,
reinsurance companies and foreign branches in Vietnam shall assume
responsibility to make reports on assessment of solvency and risk management
capabilities, including the rating of completeness of risk management, present
and future payment capabilities, within the time frames in line with business
plans; determine all of financial resources needed for business management
within allowed risk acceptance capabilities and business plans; check their
risk tolerance and give the analysis of their business continuity.
4. The Minister of Finance shall elaborate on this
Article.
1. Insurance companies and branches of foreign
non-life insurance companies shall have the autonomy and sole responsibility
towards creating, designing and developing insurance products.
2. Rules, terms, conditions and tariffs of
insurance products that are formulated by insurance companies and branches of
foreign non-life insurance companies must conform to the following
requirements:
a) Complying with law, conforming to practices and
standards of ethics, cultural and traditional values and customs of Vietnam;
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c) They must clearly and transparently show
insurable interests; subject matters insured; scope of insurance cover; covered
risks; rights and obligations of the policyholder and the insured; liabilities
of the insurance company or non-life insurance company’s branch; disclaimer of
insured liabilities; methods of payment of insurance claims; other regulations
regarding settlement of disputes;
d) Insurance premiums must be calculated or
determined according to statistical data; can vary, depending on insurance
conditions and insured liabilities and must be matched with payment capabilities
of insurance companies or branches of foreign non-life insurance companies.
3. Insurance companies and branches of foreign
non-life insurance companies are required to register and seek the Ministry of
Finance’s consent to the premium calculation methods and bases of insurance
products classified into classes or lines of life insurance, health insurance,
vehicle liability coverage or vehicle insurance, except insurance coverage
against vehicle owner’s civil liability.
4. Insurance companies and branches of foreign
non-life insurance companies may have the freedom of supplying insurance
products:
a) directly or in person;
b) via insurance agents or brokers;
c) through the tendering or tendering process;
d) via electronic transactions;
dd) in other permissible ways.
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6. The Minister of Finance shall impose detailed
regulations on premium calculation methods and bases specified in clause 3 of
this Article and provision of insurance products stipulated in clause 4 of this
Article.
1. Launching, offering and participating in
agriculture, forestry, fishery or aquaculture insurance and other insurance
products serving social welfare and security purposes shall be encouraged,
supported and facilitated by the Government through one or several methods as
follows:
a) Simplify or streamline administrative
formalities;
b) Communicate and propagate insurance policies;
c) Establish insurance risk funds;
d) Build the database, provide support for
application of technologies in designing and creating insurance products,
assessing loss or damage and paying insurance claims;
dd) Establish distribution channels according to
the chain of value in the agriculture, forestry, fishery or aquaculture
industry;
e) Give partial grants in the annual central and/or
local budget estimates or other legitimate funds prescribed by law to pay
insurance premiums;
g) Formulate the mechanism for executive and
supervisory information cooperation and sharing between Ministries and central
authorities in order to promote connection and collaboration in the insurance
business industry.
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1. Insurance companies,
reinsurance companies or foreign branches in Vietnam may share risks with other
insurance companies, reinsurance companies or foreign branches in Vietnam,
foreign insurance companies, foreign reinsurance companies or foreign insurance
organizations in the form of reinsurance or reinsurance ceding.
Foreign insurance companies,
foreign reinsurance companies or foreign insurance organizations that accept
reinsurance must be satisfactorily ranked by international credit rating
providers and must meet other conditions under the Government’s regulations.
2. Insurance companies or branches
of foreign non-life insurance companies can provide coinsurance on the basis of
jointly agreeing with the policyholder to conclude an insurance contract under
which insurance companies or branches of foreign non-life insurance companies
can receive insurance premiums and pay indemnity or insurance at the
agreed-upon percentage rate.
Insurance companies or branches of
foreign non-life insurance companies participating in coinsurance plans must be
insurance companies or branches of foreign non-life insurance companies
obtaining business licenses or permits under this Law.
3. The motor vehicle insurance
fund may be formed from contributions of non-life insurance companies or
branches of foreign non-life insurance companies providing compulsory insurance
against civil liability of vehicle owners and other legitimate funds to serve
the purposes of paying for offering humanitarian aid or support and other
activities in order to boost success in discharging obligations of compulsory
insurance against civil liability of motor vehicle owners. The vehicle insurance
fund shall be managed in a centralized manner; the mechanism for management and
use of the vehicle insurance fund shall be subject to the Government’s
regulations.
4. Insurance companies,
reinsurance companies and foreign branches in Vietnam can negotiate about
establishment of the insurance risk fund to spread and distribute insurance
against major risks, catastrophic risks or new risks that are not or are less
insured against on the insurance market. Arrangements and agreements on
establishment of the state-contributed or state-aided insurance risk fund shall
be subject to the Government’s regulations; where the fund is funded by the
state budget’s grants, the regulations of the Law on State Budget shall apply.
5. The Minister of Finance shall
impose detailed regulations on reinsurance, cession and coinsurance.
1. Outsourcing is an act of entering into an
outsourcing contract between an insurance company, reinsurance company or
foreign branch in Vietnam and another entity or person to perform part of the
procedures or activities, except the followings:
a) Internal control;
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c) Risk management;
d) Insurance product consulting, launching,
offering and marketing; arranging for conclusion of insurance contracts.
2. Where part of the procedures or activities
directly related to insurance business is outsourced, the insurance company,
reinsurance company or foreign branch in Vietnam, as the outsourcing purchaser,
shall assume the sole and ultimate responsibility towards the policyholder and
take on the following obligations:
a) Formulate regulations on outsourcing management,
including rules and regulations binding on the scope of business activities
that can be outsourced, framework for assessment of associated risks, criteria
for approval of outsourcing contracts and conditions binding upon the
outsourcing supplier, ensuring compliance with law. Regulations on outsourcing
management must be subject to approval sought from Managing Boards or Boards of
Members of insurance companies, reinsurance companies or entities having
control over foreign branches in Vietnam;
b) Formulate outsourcing procedures, risk
management procedures and procedures for internal control of outsourcing
activities and take measures to ensure prevention, mitigation of and timely
response to risks arising from outsourcing, especially those related to
legitimate rights and interests of the policyholder and the insured;
c) Temporarily suspend, modify or terminate any
outsourcing contract when it is established that outsourcing activities may
cause adverse impacts on legitimate rights and interests of the policyholder or
the insured;
d) Have contingency plans to ensure that business
activities are not interrupted in the event that the outsourcing supplier is
unable to perform or fails to duly perform responsibilities for outsourcing
tasks under terms and conditions of the outsourcing contract;
dd) Conduct regular inspection and supervision of
the outsourcing supplier’s performance during the effective period of
outsourcing agreements in order to ensure outsourced tasks are performed
according to quality and progress requirements set out in outsourcing
contracts. The outsourcing supplier must manage to perform at least 75% of the
outsourced amount of work by itself; if the outsourcing supplier wishes to hire
any subcontractor to perform part of their amount of work, they must seek the
prior written approval from the insurance company, reinsurance company or
foreign branch in Vietnam as the outsourcing client, and must guarantee that
their responsibilities and obligations are kept unchanged;
e) Ensure personal data and information security
for clients in accordance with law;
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3. An outsourcing contract must be made in writing
and include but not limited to the following:
a) Scope of outsourced services, description of
outsourced services;
b) Time and location when/where outsourcing takes
place;
c) Rights and obligations of the insurance company,
reinsurance company or foreign branch in Vietnam as the client and the supplier
of outsourced services;
d) Standards and requirements concerning quality of
the outsourced services that are completely supplied;
dd) Mechanism and responsibilities for providing
information and reports by the outsourcing supplier to the insurance company,
reinsurance company or foreign branch in Vietnam as the client during the
outsourcing period;
e) Contingency and response plans against loss or
damage, compensation paid by the outsourcing supplier in the event that the
outsourcing supplier fails to carry out or is in breach of terms and conditions
of the outsourcing contract;
g) Supervision, control and audit mechanism for
performance of the outsourcing supplier; requirements binding the outsourcing
supplier to track outsourcing transactions and ensure that outsourced service
transactions in the insurance industry must be accounted for separately from
those in other industries; the insurance company, reinsurance company or
foreign branch in Vietnam must account for their outsourced service
transactions independently;
h) Regulations on restriction on subcontractor
agreements;
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k) Dispute settlement facility.
Transfer of the entire portfolio
of insurance contracts pertaining to one or several respective lines of
insurance, property and liabilities between insurance companies or foreign
non-life insurance companies shall occur in the following cases:
1. As requested by the Ministry of
Finance as provided in point c and d of clause 8 of Article 113 herein;
2. Service or business shrinking;
3. Split-up, split-off, merger,
amalgamation, dissolution, closing or termination of business;
4. Other cases specified in point
a, d and e of clause 1 of Article 75 in this Law.
1. An insurance company or foreign
non-life insurance company’s branch may receive the transferred portfolio of
insurance contracts when meeting the following conditions:
a) They are rendering the
insurance service to be transferred;
b) They meet the minimum capital
requirements and the capital adequacy or prudential ratios prescribed in this
Law;
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2. The transfer of the portfolio
of insurance contracts must entail the transfer of relevant property put up as
technical provisions for all of portfolios of insurance contracts to be
transferred.
3. Rights and obligations agreed
upon in an insurance contract that are subject to the process of portfolio
transfer shall remain unchanged until that insurance contract expires. In the
case of transfer of the portfolio of insurance contracts prescribed in clause 1
of Article 91 herein, if the value of property is less than the value of
technical provisions for the portfolio of insurance contracts to be
transferred, the insurance company or foreign non-life insurance company’s
branch as the transferee shall agree with the policyholder or the insured on
reduction in the sum insured or insurance benefit and other obligations under
the insurance contract.
4. In case of disagreeing over the
transfer, the policyholder may unilaterally terminate the insurance contract.
1. When transferring the portfolio
of insurance contracts, an insurance company or branch of a foreign non-life
insurance company shall submit the written request for transfer of the portfolio
of insurance contracts to the Ministry of Finance, clearly stating the reasons
for such transfer, enclosing the transfer plan and contract. Transfer of the
portfolio of insurance contracts shall proceed only after receipt of the
written consent to such transfer from the Ministry of Finance.
2. Within 30 days of receipt of
the Ministry of Finance’s consent to such transfer, the insurance company or
the foreign non-life insurance company’s branch that transfer the portfolio of
insurance contracts shall post the news of such transfer on their websites and
notify the transfer in writing to the policyholder.
3. The Government shall impose
detailed regulations on documentation requirements, application procedures and
processes for transfer of portfolios of insurance contracts.
1. Charter capital is total sum that a member
already contributes or is committed to contribute when establishing a limited
liability company; is total par value of shares that have been sold or of which
purchase is registered when establishing a joint-stock company, and that are
recorded in the charter of the insurance company or reinsurance company.
2. Allocated capital of a foreign branch in Vietnam
is total capital that a foreign non-life insurance company or foreign
reinsurance company allocates to their branch in Vietnam.
3. Equity is composed of the amount of
contributions to the charter capital and allocated capital of a foreign branch
in Vietnam, reserve funds, undistributed post-tax profits and owner’s funds
created by pooling after-tax profits in accordance with regulations.
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5. Risk-weighted asset is determined by the
measurement and quantitative assessment of impacts of classes of risk on
business of an insurance company, reinsurance company or foreign branch in
Vietnam, including:
a) Insurance risk class, including risks arising
from changes in technical factors in response to lines of life, non-life or
health insurance;
b) Market risk class, including risks arising from
market activities to investments of an insurance company, reinsurance company
or foreign branch in Vietnam;
c) Operational risk class, including risks arising
from the operating procedures, system and governance of an insurance company,
reinsurance company or foreign branch in Vietnam;
d) Other risks, including risks arising from other
partners or other factors that have not yet been allowed for during the process
of quantitatively assessing insurance risks, market risks and operational
risks.
6. The Government shall impose detailed regulations
on the minimum requirements of charter capital and the minimum requirements of
allocated capital corresponding to business types of insurance company,
reinsurance company or foreign branch in Vietnam.
1. Capital adequacy ratio is the ratio of available
capital to risk-weighted assets.
2. Insurance companies, reinsurance companies or
foreign branches in Vietnam must always maintain the capital adequacy ratio not
less than the prescribed one.
3. When determining the capital adequacy ratio, insurance
companies, reinsurance companies or foreign branches in Vietnam shall not be
allowed to include sums invested in the form of capital contribution or share
purchase in other insurance companies, reinsurance companies, subsidiaries of
insurance companies or subsidiaries of reinsurance companies.
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1. Insurance companies, reinsurance companies or
foreign branches in Vietnam must set aside part of charter capital or allocated
capital as an escrow held at commercial banks operating in Vietnam.
2. The sum held in escrow must make up 02% of the
minimum requirement of charter capital or allocated capital at the time of
establishment of an insurance company, reinsurance company or foreign branch in
Vietnam.
3. Insurance companies, reinsurance companies and
foreign branches in Vietnam can use sums held in escrow to meet commitments to
the policyholder only when they are short of capability to pay and the written
consent to such use is given by the Ministry of Finance. Within 90 days of use
of sums held in escrow, insurance companies, reinsurance companies or foreign
branches in Vietnam shall be responsible for replenishing escrow accounts with
sums equaling the sums that they have withdrawn for use.
4. Insurance companies, reinsurance companies or
foreign branches in Vietnam may withdraw all of money left in escrow accounts
only when their business is closed or terminated.
1. Technical provision is a sum of money that an
insurance company, reinsurance company or foreign branch in Vietnam needs to
set aside to serve the purposes of paying for insured liabilities that may
arise from insurance contracts that have already been entered into.
2. Technical provisions can be made when the
following requirements are satisfied:
a) They vary among insurance services;
b) Each technical provision is equivalent to part
of committed liabilities agreed upon in an insurance contract;
c) They vary between insurance contracts against
the subject matters insured inside Vietnam and those outside Vietnam, even in
the same insurance service or insurance product, unless otherwise prescribed in
law;
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dd) An actuary may be employed to measure and make
the technical provision;
e) Regularly conducting the review and assessment
of technical provisioning; taking prompt measures to ensure adequate technical
provisions used for paying for liabilities of insurance companies, reinsurance
companies or foreign branches in Vietnam.
3. Insurance companies, reinsurance companies or
foreign branches in Vietnam must apply to seek the approval of technical
provisioning methods from the Ministry of Finance.
4. The Government shall impose detailed regulations
on technical provisioning, documentation requirements, application procedures
and processes for approval of technical provisioning methods.
1. Insurance companies, reinsurance companies or
foreign branches in Vietnam must establish compulsory reserve funds to
supplement equity and ensure conformance to solvency requirements.
2. Each year, a compulsory reserve fund shall
receive 05% of total after-tax profit set aside until it meets the maximum
limit prescribed in the Government’s regulations.
3. In addition to compulsory reserve funds,
insurance companies, reinsurance companies and foreign branches in Vietnam may
set up other reserve funds that receive fiscal years’ after-tax profits set
aside according to charters of insurance companies, reinsurance companies, or
organizational and operational statutes of foreign branches in Vietnam.
1. Investment funds of insurance companies,
reinsurance companies and foreign branches in Vietnam shall be comprised of the
followings:
a) Equity;
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c) Other legitimate funds prescribed in law.
2. Investments made by insurance companies,
reinsurance companies or foreign branches in Vietnam must adhere to the
following principles:
a) Ensure safety, liquidity and efficiency; comply
with law and self-responsibility rules applied to investment activities;
b) Technical provisions may be used as investments
in Vietnam only, except those specified in point b of clause 2 of Article 100
herein;
c) It is prohibitory that borrowed funds are used
for investment and fiduciary investment in securities, real estate business or
contribution of capital to other enterprises;
d) It is prohibitory that investment accounting for
30% of the portfolio of investments in companies belonging to the same group of
companies having mutual ownership relationship is made. This prohibition clause
shall not apply to deposits made at credit institutions and outward investment
funds existing in the form of establishment of companies or establishment of
foreign branches in the receiving foreign countries;
dd) Investments made in return for those of
shareholders or members contributing capital or persons associated with these
shareholders or members contributing capital are not allowed, except in case of
deposits made at transaction offices of shareholders or members that are credit
institutions;
e) Purchase of corporate bonds issued to serve
certain purposes of restructuring of loans of issuing companies is not allowed;
g) In case of fiduciary investments, trustees must
be licensed to perform fiduciary investment activities falling within the scope
of fiduciary investment.
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a) Investment in real estate business, except in
the following cases: purchasing stocks of real estate businesses listed on the
securities market, fund certificates of public funds; purchasing, investing in
or owning real property used as business offices, locations or treasure vaults
for direct uses for their insurance business; leasing out unoccupied business
establishments under their control or management; seizing real property by
managing or disposing of mortgage bonds, or recovering loans secured by real
property within 03 years from the lien date;
b) Investment in precious metals, jewels;
c) Investment in intangible fixed assets, except
those used for commercial and business purposes of insurance companies or
branches;
d) Investment in derivatives or derivative
contracts, except those listed as provisions for risks arising from insurance,
reinsurance contracts and portfolios of stocks that insurance companies,
reinsurance companies or foreign branches in Vietnam are holding.
4. Insurance companies, reinsurance companies and
foreign branches in Vietnam shall be in charge of valuation of investment
assets as per the regulations imposed by the Minister of Finance.
5. The Government shall impose detailed regulations
on investment quotas or limits applicable to insurance companies, reinsurance
companies and foreign branches in Vietnam.
1. Insurance companies and reinsurance companies
can invest abroad by:
a) Establishing; contributing capital to establish;
making equity participation in; purchasing shares of; purchasing ownership
interest in insurance companies or reinsurance companies in foreign countries;
establishing branches of insurance companies or reinsurance companies in
foreign countries; setting up representative offices and other types of
commercial establishment in foreign countries;
b) Purchasing and selling stocks, other financial
instruments or investing through securities investment funds, financial
intermediaries in foreign countries under the Government’s regulatory
provisions.
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a) Portion of equity left after deducting the
portion of funds satisfying the capital adequacy and solvency requirements
under the regulatory provisions of this Law;
b) Portion of idle funds from technical provisions
for insurance contracts whereunder their interests are associated with domestic
investment indices of foreign countries, and portion of idle funds from
technical provisions for insurance contracts entered into with overseas
entities or persons.
3. Outward investments made by insurance companies
and reinsurance companies must conform to general regulations on investment set
out in Article 99 herein and the following stipulations:
a) Each outward investment must ensure conformance
to the capital adequacy and solvency requirements of insurance companies or
reinsurance companies as outward investors;
b) Each outward investment must conform to law on
insurance business, law on investment and law on foreign exchange management;
c) Each outward investment must be made in the own
name of the insurance company or reinsurance company as the outward investor;
d) Outward investment funds, investment assets,
revenues and expenses related to outward investments must be managed and
monitored separately;
dd) Using sums of money and/or property of domestic
policyholders to compensate for any losses to or deficits in funds for outward
investment is prohibited, unless otherwise provided in law;
e) Each outward investment shall be subject to
application for the written consent from the Ministry of Finance prior to
commencement.
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5. The Government shall impose detailed regulations
on conditions, quotas, documentation requirements, application procedures and
processes for approval of outward investments made by insurance companies and
reinsurance companies.
1. Insurance companies, reinsurance companies or
foreign branches in Vietnam must register implementation principles with the
Ministry of Finance and must carry out the process of separately managing,
individually recording and tracking:
a) Equity, premiums and assets classified by
specific types of capital;
b) Revenues, expenses and incomes arising from
insurance business or investment of equity and premiums;
c) Premiums arising from insurance business
activities performed inside and outside Vietnam; revenues, expenses, technical
provisions and other relevant expenses arising from insurance business
conducted inside and outside Vietnam.
2. Life insurance companies must separately manage,
individually record and track assets, capital, revenues, expenses or incomes of
dividend-paying life insurance contracts according to the methods approved by
the Ministry of Finance.
3. The Government shall impose detailed regulations
on documentation requirements, application procedures and processes for
registration or approval referred to in clause 1 and 2 of this Article.
4. The Minister of Finance shall impose detailed
regulations on separate management of equity and premiums, and principles of
distribution of surpluses, with regard to dividend-paying life insurance
contracts.
1. Financial regimes of insurance companies, reinsurance
companies and foreign branches in Vietnam shall be subject to regulatory
provisions of this Law and others of relevant law.
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1. The fiscal year of insurance companies,
reinsurance companies and foreign branches in Vietnam shall start on January 1
and end on December 31 in the same calendar year.
2. The first fiscal year of insurance companies,
reinsurance companies and foreign branches in Vietnam shall start from the date
of issuance of their license or permit and end on the last day of the year in
question.
Accounting regimes applied to insurance companies,
reinsurance companies and foreign branches in Vietnam shall be subject to
regulatory provisions of legislation on accounting.
1. Annual financial statements of insurance
companies, reinsurance companies and foreign branches in Vietnam shall be
subject to annual independent audit.
2. Insurance companies, reinsurance companies and
foreign branches in Vietnam must receive confirmatory opinions of independent
audit bodies on their reports on assessment of their solvency and risk
management capabilities; reports on their separate management of equity and
premiums; assessment reports on performance of universal life insurance funds,
unit-linked insurance funds and pension funds.
3. When conducting audit or giving confirmation of
reports specified in clause 1 and 2 of this Article, independent audit bodies
shall assume the following responsibilities:
a) Comply with law on independent auditing;
b) Engage actuaries in audit of capital adequacy
ratios and technical provisions; risk management specialists in audit of risk
management practices and other professionals appropriate for independent audit
engagements;
c) Provide, present and account for data and
information related to audits of insurance companies, reinsurance companies and
foreign branches in Vietnam upon the request of the Ministry of Finance;
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dd) Protect information security and privacy in
accordance with law.
4. The Minister of Finance shall elaborate on
clause 2 of this Article.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam shall have the burden of submitting the following
reports and statements to the Ministry of Finance:
a) Financial statements; when getting opinions or
conclusions that are not unqualified from independent audit bodies towards any
reports or operations that are audited, insurance companies, reinsurance
companies and foreign branches in Vietnam are required to report to the
Ministry of Finance on causes and current state;
b) Operational reports;
c) Reports on separate management of equity and
insurance premiums;
d) Reports on assessment of solvency and risk
management capabilities;
dd) Reports on changes in capital and assets
associated with specific types of risk.
2. In addition to those reports specified in clause
1 of this Article, insurance companies, reinsurance companies and foreign
branches in Vietnam shall be obliged to report to the Ministry of Finance when:
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b) they fail to meet financial and other regulatory
requirements.
3. The Minister of Finance shall imposed detailed
regulation on reporting and provision of information prescribed in clause 1 and
2 of this Article.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam shall be allowed to transfer their profits and
assets abroad under domestic law of Vietnam and the following regulations:
a) Remitting the amount of profits under the
foreign investor’s ownership left after earmarking some profits to set up
funds, fulfilling financial obligations and ensuring conformance to the capital
adequacy and solvency requirements prescribed herein;
b) Remitting the remaining amount of property and
assets under the foreign investor’s ownership after termination of their
business in Vietnam.
2. Outward transfer or remittance of money and
other property or assets shall be subject to domestic law of Vietnam.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam may adopt financial autonomy and
self-responsibility practices towards effective management and supervision of
their operations and business; carry out the obligations and commitments to
policyholders, interested entities or persons and the Government in accordance
with law.
2. Insurance companies, reinsurance companies and
foreign branches in Vietnam shall be obliged to formulate strategies,
procedures, regulations, procedures and organization structures as
prerequisites to financial management and supervision, ensuring safety,
effectiveness and compliance with law; actively prevent, control and minimize
risks.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam may be deemed financially safe and prudent when
meeting regulations regarding capital, assets, solvency and investment.
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3. The Minister of Finance shall impose regulations
on subjects of application of enhancement measures, early intervention measures
and control measures stipulated in Article 111, 112 and 113 herein for
maintenance of financial safety.
1. Insurance companies, reinsurance companies and
foreign branches in Vietnam must maintain their conformance to solvency
requirements during their business.
2. Insurance companies, reinsurance companies and
foreign branches in Vietnam may be deemed fully solvent when meeting both of
the following conditions:
a) Make technical provisions in full;
b) Meet capital adequacy ratios.
1. Where it is mandatory to apply enhancement
measures, insurance companies, reinsurance companies and foreign branches in
Vietnam may have the freedom of deciding on and carrying out one or several
enhancement measures prescribed in clause 2 of this Article, and shall notify
the Ministry of Finance of the current state, causes and enhancement measures
to be applied.
2. Enhancement measures shall comprise the
following actions:
a) Increase the amount of charter capital or
allocated capital;
b) Improve business performance, including focusing
on offering insurance products in an effective manner; reviewing insurance
premiums in line with conditions and responsibilities of insurance;
restructuring reinsurance plans or schemes; reducing operating expenses,
administrative expenses and selling expenses;
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d) Strengthen risk management; reorganize the
management and staff machinery; control purchase of fixed assets; control
setting-aside of funds for establishment and use of funds;
dd) Take other measures in
accordance with law.
3. During the process of implementation of
enhancement measures, insurance companies, reinsurance companies and foreign
branches in Vietnam shall not be allowed to perform the following acts:
a) Remittance of profits abroad, distribution of
profits, payment of dividends;
b) Increase in acceptance of reinsurance.
1. If any insurance company, reinsurance company or
foreign branch in Vietnam has their capital adequacy ratio which is not
satisfactory to the extent of needing an early intervention measure; or if such
capital adequacy ratio remains unsatisfactory even after completing an
enhancement measure specified in Article 111 herein during 12 consecutive
months, the Ministry of Finance shall issue the written instruction on
application of the early intervention measure.
2. Within 60 days from the date of the Ministry of
Finance’s issuance of the written instruction on application of the early intervention
measure, the receiving insurance company, reinsurance company or foreign branch
in Vietnam shall be responsible for formulating the plan for correction of the
capital adequacy ratio prescribed in clause 4 of this Article and implementing
that plan; concurrently, reporting to the Ministry of Finance on the current
state, causes and the plan for correction of the capital adequacy ratio. The
Ministry of Finance shall issue the written demand for any modification of the
correction plan to the insurance company, reinsurance company or foreign branch
in Vietnam where necessary.
3. The maximum time limit for implementation of the
correction plan shall be 12 months since the Ministry of Finance has issued the
written instruction on application of the early intervention measure.
4. The correction plan shall comprise one or
several measures as follows:
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b) Involuntary or voluntary termination of office
of managers;
c) Ineffective service and business shrinking;
temporary suspension of ineffective new products or services.
5. When any early intervention measure is being
taken, insurance companies, reinsurance companies or foreign branches in
Vietnam shall be prevented from performing the following acts:
a) Those acts specified in clause 3 of Article 111
herein;
b) Purchase of treasury stocks;
c) Expansion of lines, scope and duration of
business.
6. Within the time limit specified in clause 2 of
this Article, if the insurance company, reinsurance company or foreign branch
in Vietnam fails to formulate the plan for correction of their capital adequacy
ratio or has not managed to correct their capital adequacy ratio before expiry of
the time limit specified in clause 3 of this Article, depending on the type and
level of risk, the Ministry of Finance can request them to take one or several
measures stipulated in clause 4 of this Article.
7. The Ministry of Finance shall publicly announce
the list of insurance companies, reinsurance companies and foreign branches in
Vietnam required to apply the early intervention measure on the website of the
Ministry of Finance.
8. The Ministry of Finance can consider issuing the
written instruction on termination of the early intervention measure to any
insurance company, reinsurance company or foreign branch in Vietnam when:
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b) They are bound to apply any control measure
prescribed in Article 113 in this Law.
1. If any insurance company, reinsurance company or
foreign branch in Vietnam has their capital adequacy ratio which is not
satisfactory to the extent of needing a control measure, then the Ministry of
Finance shall consider deciding to issue the written instruction on application
of the control measure to that insurance company, reinsurance company or
foreign branch in Vietnam.
2. The Ministry of Finance shall notify application
of the control measure to the following recipients:
a) Owners, members or shareholders whose equity
participation accounts for at least 10% of the charter capital in insurance
companies, reinsurance companies; foreign non-life insurance companies, foreign
reinsurance companies whose branches are located in Vietnam;
b) Foreign insurance regulatory authorities having
jurisdiction over companies owning 100% of charter capital or allocated capital
of foreign insurance companies, reinsurance companies or foreign branches in
Vietnam.
3. Within 30 days from the date of the Ministry of
Finance’s issuance of the written instruction on application of the control
measure, the receiving insurance company, reinsurance company or foreign branch
in Vietnam must hire an independent audit body to review and assess the current
financial status, determine the real value of charter capital, allocated
capital and solvency. Where they fail to hire an independent audit body within
the permissible time limit, the Ministry of Finance shall reserve the right to
appoint an independent audit body. Audit costs and expenses shall be covered by
the insurance company, reinsurance company or foreign branch in Vietnam.
4. Within 120 days from the date of the Ministry of
Finance’s issuance of the written instruction on application of the control
measure, the receiving insurance company, reinsurance company or foreign branch
in Vietnam shall be responsible for formulating the plan for correction of the
capital adequacy ratio and implementing that plan; concurrently, reporting to
the Ministry of Finance on the current state, causes and the plan for
correction of the capital adequacy ratio. The Ministry of Finance shall issue
the written demand for any modification of the correction plan to the insurance
company, reinsurance company or foreign branch in Vietnam where necessary.
5. The maximum time limit for implementation of the
correction plan shall be 18 months since the Ministry of Finance has issued the
written instruction on application of the control measure.
6. The correction plan shall comprise one or
several measures as follows:
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b) Termination of any business or operation that
may result in failure to meet the permissible capital adequacy ratio.
7. During the process of implementation of a
control measure, the insurance company, reinsurance company or foreign branch
in Vietnam shall not be allowed to perform the following acts:
a) Perform those acts specified in clause 5 of
Article 112 herein;
b) Contribute capital to establish a business;
purchase real property used as a business office or location or vault facility
for direct provision of services;
c) Invest in high-risk property or assets or
perform business activities, causing any reduction in their capital adequacy
ratio.
8. Within the time limit specified in clause 4 of
this Article, if the insurance company, reinsurance company or foreign branch
in Vietnam fails to formulate the plan for correction of their capital adequacy
ratio or has not managed to correct their capital adequacy ratio before expiry
of the time limit specified in clause 5 of this Article, depending on the type
and level of risk that such failure may pose, the Ministry of Finance can
perform one or several actions as follows:
a) Cease part or all of services
provided by the insurance company, reinsurance company or foreign branch in
Vietnam at fault;
b) Request implementation of the process of
split-up, split-off, merger or amalgamation of the insurance company or
reinsurance company at fault;
c) Request the transfer of portfolios of insurance
contracts;
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9. During the period of cessation of business
stated in point a of clause 8 of this Article, the affected insurance company,
reinsurance company or foreign branch in Vietnam shall remain to make technical
provisions in full in accordance with law; closely monitor and supervise
insurance contracts remaining valid; ensure that insurance claims and coverage
must be paid on time and in full under the contractual terms and conditions and
regulatory provisions; fulfill their tax obligations; continue to pay debts and
finish executing the contract entered into with the policyholder and the
employee under law, unless otherwise agreed upon between contracting parties.
10. The Ministry of Finance shall publicly
announce the list of insurance companies, reinsurance companies and foreign
branches in Vietnam subject to control measures on the website of the Ministry
of Finance.
11. The Ministry of Finance can consider issuing
the written instruction on termination of application of the control measure to
the controlled insurance company, reinsurance company or foreign branch in
Vietnam when:
a) Such controlled insurance
company, reinsurance company or foreign branch in Vietnam is given confirmation
by an independent audit body that their capital adequacy ratio is corrected
successfully;
b) The insurance company or
reinsurance company under control has been amalgamated, merged or closed;
c) Such controlled insurance
company, reinsurance company or foreign branch in Vietnam fails to correct the
state causing them to be subject to the control measure.
In addition to the responsibilities specified in
Article 111, 112 and 113 herein, insurance companies, reinsurance companies and
foreign branches in Vietnam that are bound to apply enhancement measures,
intervention measures or control measures shall assume the following
responsibilities:
1. Manage, control and administer their business as
well as provide protection for their property and assets;
2. Bear responsibility for the accuracy of
administrative, operational and other relevant information, documents, records
and matters;
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4. Assume other responsibilities prescribed by law.
1. An insurance company,
reinsurance company or foreign branch in Vietnam can be terminated in the
following cases:
a) They are dissolved or
terminated of their own accord;
b) The business life specified in
their business license or permit is expired;
c) Their business license or
permit is revoked or withdrawn as per point a, b, d and e of clause 1 of
Article 75 herein;
d) The foreign branch in Vietnam
fails to correct their capital adequacy ratio after being subject to the
control measure;
dd) They fall into other cases
specified in law.
2. Dissolution of insurance
companies, reinsurance companies or termination of foreign branches in Vietnam
shall be subject to the written consent from the Ministry of Finance.
3. The Government shall impose
detailed regulations on conditions, documentation requirements, application
procedures and processes for dissolution of insurance companies, reinsurance
companies or termination of foreign branches in Vietnam.
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2. Upon receipt of the petition to initiate the
bankruptcy proceedings against the insurance company or reinsurance company as
provided in clause 1 of this Article, the Court shall start the procedures for
handling of the request for declaring bankruptcy and declare that the insurance
company or reinsurance company is bankrupt without resort to any meeting of
creditors to be held and business recovery actions to be taken.
3. Property and assets of an insurance company or
reinsurance company in case of bankruptcy shall be distributed in the following
order of priority to pay:
a) Bankruptcy-related costs;
b) Outstanding wages, salaries,
severance allowance, social insurance or health insurance contributions for
employees;
c) Insurance indemnities or
coverage in insurance claims under which the insurance company or reinsurance
company has accepted payment of surrender value, account balance of insurance
contracts or insurance premium refunds;
d) Financial obligations to the
Government; unsecured debts that need to be repaid to creditors on the list of
creditors; secured debts that are not repaid yet due to the imbalance between
the value of collateral and the amount of debts payable;
dd) Owners, capital-contributing
members and shareholders of the insurance company or reinsurance company.
4. If the value of property or asset is not enough
to pay as prescribed in clause 3 of this Article, the payees in the same group
of priority may receive payments in percent in proportion to the amount of
debts owed.
5. Issues related to
bankruptcy of insurance companies and reinsurance companies that are not
mentioned in this Article shall be subject to regulatory provisions of the Law
on Bankruptcy.
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Where there is any change in the piece of
information that has been disclosed previously, insurance companies,
reinsurance companies and foreign branches in Vietnam shall be required to give
full and timely update on such change and reasons for such change.
2. Insurance companies, reinsurance companies or
foreign branches in Vietnam shall post information to be disclosed on websites
of these companies or branches. Posting information shall be subject to the
regulations of the Minister of Finance. Duration of information disclosure
shall be subject to the following regulations:
a) Information must be disclosed within 07 working
days from the final deadline for submission of reports prescribed in Article
118 in this Law, or from the day on which any of the events related to
information to be disclosed as per Article 119 in this Law occurs;
b) Information must be disclosed within 03 working
days from the day on which any of the events related to information to be
disclosed as per Article 120 in this Law occurs;
3. Within 07 working days from the date of
information disclosure, insurance companies, reinsurance companies or foreign
branches in Vietnam shall be responsible for notifying the Ministry of Finance
of pieces of information to be disclosed.
4. Insurance companies and reinsurance companies
that are public companies shall disclose information under this Law and
regulatory provisions of the Law on Securities.
1. Full-year financial statements that have been
audited; mid-year financial statements.
2. Reports on assessment of solvency and risk
management capabilities.
3. Available capital and capital adequacy ratio.
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a) Details given in their business license or
permit;
b) Information about the Chairperson of the
Managing Board or the Chairperson of the Board of Members, the Director or
General Director, the legal representative and the Actuary;
c) Address of their head office, branch,
representative office or business location;
d) Hotline.
2. Information about insurance operations and
services, including:
a) Rules, terms and conditions, tariff of specific
insurance products currently available on the market; attention that clients
should pay when participating in each insurance plan;
b) Procedures and documentation requirements for
filing insurance claims;
c) Investment management objectives and policies;
d) Objectives and policies of assessment of capital
adequacy ratio.
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a) Temporary suspension of business; termination of
insurance business lines or services; revocation or withdrawal of the business
license or permit;
b) Split-up, split-off, merger,
amalgamation, dissolution of or transformation into other business type or type
of business ownership; outward investment; establishment or closing of branches
or representative offices;
c) Termination of operation of
foreign branches in Vietnam;
d) Any changes in applied accounting policies;
retroactive adjustments in financial statements; opinions other than
unqualified opinions of an independent audit body as to financial statements;
designation or substitution of the independent audit body;
dd) Assignment of shares or
ownership interests that helps shareholders or members contributing capital to
own at least 10% of charter capital, or cause shareholders or members
contributing capital to own less than 10% of charter capital;
e) Penalty decisions against administrative
offences arising in insurance business sectors;
g) Court judgements or decisions legally in force
that are related to operations and services of insurance companies, reinsurance
companies and foreign branches in Vietnam;
h) Court decisions on initiation of bankruptcy
proceedings against insurance companies or reinsurance companies;
i) Decisions on initiation of legal proceedings
against enterprises, managers and controllers that are related to business of
insurance companies, reinsurance companies and foreign branches in Vietnam;
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l) Information related to insurance companies,
reinsurance companies or foreign branches in Vietnam that causes material
effects on capital, assets, solvency, risk management and corporate governance
capabilities;
m) Loss or damage to the property
whose value makes up at least 10% of equity;
n) Transfer of portfolios of
insurance contracts;
o) Other information prescribed in
law.
2. The Minister of Finance shall
impose detailed regulations on information to be irregularly disclosed as
provided in point k and l of clause 1 of this Article.
Insurance
companies, branches of foreign non-life insurance companies, policyholders,
insured persons and other concerned parties shall assume their responsibilities
for prevention and control of loss or damage in insurance; prevention and
control of insurance fraud.
1. Prevention and control of loss
or damage in insurance is the act of performing measures to prevent and reduce
possible loss or damage to the subject matters insured.
2. Policyholders and insured
persons shall be responsible for proactively taking measures to prevent and
reduce loss or damage; immediately notifying insurance companies or branches of
foreign non-life insurance companies of occurrence of insured events; carrying
out measures to prevent and reduce loss or damage according to the instructions
of insurance companies (if any).
3. Insurance companies and
branches of foreign non-life insurance companies shall be responsible for
taking the following risk prevention and control measures:
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b) Provide funding for access to
and donate equipment and physical resources for prevention and control of
risks;
c) Back development of
construction structures used for the purposes of preventing and mitigating
possible effects of risks to subject matters insured;
d) Hire other entities and persons
to monitor, prevent and control loss or damage.
4. Relevant entities shall provide
guidance and propagation sessions on implementation of measures to prevent and
control loss or damage.
1. Prevention and control of
fraudulent or dishonest conduct in the insurance industry is the practice of
taking any measures to prevent and control fraudulent acts during the process
of concluding and carrying out an insurance contract to illegally take money
and property from an insurance company, branch of a non-life insurance company
or policyholder.
2. Insurance companies and
branches of foreign non-life insurance companies shall be responsible for
actively formulating and implementing measures to prevent, detect and minimize
insurance frauds; hold propagation sessions on prevention and control of
insurance frauds.
3. Policyholders and insured
persons shall actively participate in the task of prevention and control of
insurance frauds; if any insurance fraud is detected, they must promptly notify
these frauds to insurance companies, branches of foreign non-life insurance
companies and regulatory authorities.
4. Relevant entities can cooperate with insurance
companies, branches of foreign non-life insurance companies, policyholders and
insured persons on insurance fraud prevention and control activities.
INSURANCE AGENTS, INSURANCE BROKERAGE COMPANIES,
ENTITIES AND PERSONS PROVIDING INSURANCE ANCILLARY SERVICES
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1. A person rendering insurance
agent services must:
a) be a Vietnamese citizen
permanently residing in Vietnam;
b) have full civil capacity;
c) hold the certificate of
practising as an insurance agent conforming to Article 130 herein.
2. An entity rendering insurance
agent services must:
a) be licensed or permitted for
their establishment and operation in Vietnam;
b) obtain registration for their
scope of insurance agent services under the regulatory provisions of the
Corporate Law. As for any entity engaged in conditional business sectors and
industries, a license, certificate and other approval or certification document
(if any) containing information about permission for insurance agent services
that is issued by a competent agency shall be needed;
c) be staffed by employees
directly rendering insurance agent services that meet the conditions specified
in clause 1 of this Article;
d) meet personnel and other
conditions under the Government’s regulations.
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a) The entity is a commercial
legal entity facing the criminal prosecution process; an entity that is subject
to the temporary suspension, perpetual termination or prohibition of their
business or the prohibition of their engagement in the insurance-related
sectors;
b) The person is facing criminal
prosecution actions; is serving a prison sentence; is serving the sentence of
prohibition of practising in the insurance-related sectors.
An insurance contract must
include, but not limited to, the followings:
1. Name and address of the
insurance agent;
2. Name and address of the head
office of the insurance company, branch of the non-life insurance company or
mutual providing microinsurance products;
3. Rights and obligations of the
insurance company, branch of the non-life insurance company, mutual providing
microinsurance products, insurance agent;
4. Scope of business of the
insurance agent;
5. Insurance agent commissions,
rewards, support provided for the insurance agent and other interests (if any);
6. Contract term;
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1. Persons cannot be insurance
agents for other insurance companies or branches of foreign non-life insurance
companies operating in the business lines or sectors that are the same as those
in which the principal insurance companies or branches of foreign non-life
insurance companies for which these persons are acting as agents are performing
transactions. A person acting as an insurance agent for a mutual providing
microinsurance products shall not be allowed to act as the insurance agent for
the other mutual providing microinsurance products.
2. An entity cannot be an
insurance agent for the other insurance company or branch of a foreign non-life
insurance company or mutual providing microinsurance products without the
written approval from the insurance company, branch of the foreign non-life
insurance company or mutual providing microinsurance products for which that
entity is acting as the agent.
3. Persons rendering insurance agent services or
employees of entities doing insurance agent business can only render insurance
agent services for insurance schemes or products in which they are trained.
4. Biodata about persons rendering
insurance agent services and staff members of entities rendering insurance
agent services that are directly involved in insurance agent services must be
registered and updated in the database of insurance agent services according to
Article 11 herein.
5. Persons that have obtained
certificates of practising in the insurance agent business sector, but have not
operated in the insurance agent business sector, during 03 consecutive years
must take tests to obtain new ones before commencement of the insurance agent
services.
1. Insurance companies, branches
of non-life insurance companies and mutuals providing microinsurance products
shall have the following rights:
a) Organize insurance agent
systems designed for implementation of business strategies;
b) Recruit insurance agents and
enter into insurance agent agreements;
c) Decide the amount of insurance
agent commissions, rewards and grants for insurance agents and other interests
specified in insurance agent agreements provided that such amount is not
greater than the limit regulated by the Minister of Finance;
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dd) Request insurance agents to
remit collections under terms and conditions of insurance agent agreements;
e) Check and supervise execution
of insurance agent agreements; measure the performance in insurance product
consulting and offering activities of insurance agents and staff members of
entities rendering insurance agent services;
g) Enjoy other legitimate rights
and benefits arising from rendering insurance agent services;
h) Have other rights stipulated by
law.
2. Insurance companies, branches
of non-life insurance companies and mutuals providing microinsurance products
shall take on the following obligations:
a) Bear responsibility for
organization, management and engagement of insurance agents;
b) Organize training and knowledge
updating sessions to be provided for insurance agents under law;
c) Fully and accurately provide
guidance, necessary information and documents related to the insurance agent
business;
d) Perform responsibilities
arising in insurance agent agreements that have been entered into;
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e) Return security deposit or
collateral to insurance agents under contractual terms and conditions;
g) Bear responsibility to perform
obligations agreed upon in insurance contracts that insurance agents or staff
members of entities rendering insurance agent services arrange to conclude.
Where any insurance agent or staff member of an entity rendering insurance
agent services is in breach of an insurance contract, causing any loss or
damage to legitimate rights and interests of an insured persons and
policyholder, the insurance company, branch of the foreign non-life insurance
company or mutual providing microinsurance products, as the principal, must
bear responsibility for discharging obligations agreed upon in the insurance
contract that such insurance agent arranges to conclude;
h) Have their insurance agent
business put under the inspection and supervision of competent regulatory
authorities;
i) Protect and avoid encumbering
legitimate rights and interests of insurance agents under contractual terms and
conditions and in accordance with law;
k) Report on the training and
employment of insurance agents under the regulations adopted by the Minister of
Finance;
l) Register and update biodata
about persons rendering insurance agent services and staff members of entities
rendering insurance agent services that are directly involved in insurance
agent services in the database of insurance agent services according to Article
11 herein;
m) Assume other obligations
prescribed by law.
1. Insurance agents shall have the
following rights:
a) Decide on and conclude
insurance agent agreements. This right is intended for insurance companies,
branches of non-life insurance companies or mutuals providing microinsurance
products in accordance with law;
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c) Receive insurance agent commissions, rewards and
grants for insurance agents and other interests from insurance agent services
according to insurance agent agreements;
d) Request insurance companies,
branches of non-life insurance companies and mutuals providing microinsurance
products to return security deposit or collateral under contractual terms and
conditions of insurance agent agreements;
dd) Exercise other rights in
accordance with law.
2. Insurance agents shall take on
the following obligations:
a) Discharge their contractual
obligations;
b) Provide security deposit or
collateral on behalf of insurance companies, branches of non-life insurance
companies and mutuals providing microinsurance products if this obligation is
prescribed in an insurance agent agreement;
c) Fulfill financial obligations
in accordance with law;
d) Provide insurance product
consulting, offering and marketing services; provide full and accurate
information about insurance products, insurance companies, branches of non-life
insurance companies or mutuals providing microinsurance products to
policyholders and give clear and comprehensive explanations about insurance
benefits, disclaimer clauses, rights and obligations of policyholders; avoid
providing information for policyholders without approval from policyholders;
implement other obligations falling within the scope of authorization specified
in insurance agent agreements;
dd) Participate in training and knowledge updating
sessions designed for insurance companies, branches of non-life insurance
companies and mutuals providing microinsurance products;
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g) Refund insurance companies,
branches of foreign non-life insurance companies or mutuals providing
microinsurance products sums that they have paid as insurance indemnities or
coverage to insured persons or policyholders in the event that insurance agents
or staff members of entities rendering insurance agent services are in breach
of insurance agent agreements, causing loss or damage to legitimate rights and
interests of these insured persons or policyholders;
h) Adhere to eligibility standards
for operation of insurance agents that are set by insurance companies, branches
of non-life insurance companies and mutuals providing microinsurance products;
i) Protect client privacy and
personal information of clients; use client’s information to serve permitted
purposes; avoid providing information for any third party without client’s
consent, except as provided in law;
k) Take on other obligations
prescribed by law.
3. Insurance agents shall be
prohibited from performing the following acts:
a) Provide false information and
advertisements about insurance services and scope of business of insurance
companies, branches of non-life insurance companies and mutuals providing
microinsurance products; insurance terms and conditions prejudicing legitimate
rights and interests of policyholders;
b) Prevent policyholders from
providing information related to insurance contracts or incite policyholders or
insured persons not to declare information related to insurance contracts;
c) Compete for clients by
precluding, enticing, bribing and threatening employees or clients of other
insurance companies, branches of foreign non-life insurance companies, mutuals
providing microinsurance products, insurance agents or insurance brokerage
companies;
d) Incite clients to nullify
insurance contracts that are in effect in any form.
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1. Insurance agent practising certificates are classified
into the followings:
a) Life insurance agent practising certificate;
b) Non-life insurance agent practising certificate;
c) Health insurance agent practising certificate.
2. Each training course or program that a trainee
must take to graduate an insurance agent practising certificate must comprise:
a) General knowledge about insurance; principles of
rendering of insurance services that vary depending on types of insurance agent
practicing certificate;
b) Code of professional ethics and conduct in the
insurance agent business;
c) Rights and obligations of insurance companies,
branches of non-life insurance companies, mutuals providing microinsurance
products and insurance agents in the insurance agent business sector;
d) Domestic law of Vietnam applicable in the
insurance industry;
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3. The Minister of Finance shall
impose detailed regulations on types of insurance agent practising certificate;
content of training curriculum or program, documentation requirements,
application procedures and processes for certification testing, issuance,
revocation and reissuance of insurance agent practising certificates.
1. Root insurance brokerage and
reinsurance brokerage.
2. Provision of insurance
ancillary services.
3. Other services related to
insurance contracts that are rendered upon policyholders’ request.
1. Honesty, objectivity,
transparency; ensuring legitimate rights and interests of related parties.
2. Adherence to the rules
professional ethics adopted by socio-professional organizations.
3. Insurance brokerage companies must agree in
writing with clients when rendering insurance brokerage services.
1. Licensing conditions of founding shareholders or
members, including:
a) In order to obtain business licences or permits,
entities and persons applying for these licenses or permits must have the
rights of business incorporation and management in Vietnam under the Corporate
Law;
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2. Licensing conditions concerning capital or
assets:
a) The amount of Vietnamese-dong contribution to
the charter capital must not be less than the minimum required amount of
charter capital under the Government’s regulations;
b) Shareholders and capital-contributing members
shall not be allowed to contribute borrowed funds or funds or assets held in
trust for other entities and persons for equity participation purposes.
3. Licensing conditions concerning personnel: Any
nominee for a Chairperson of the Managing Board or Chairperson of the Board of
Members, Director or General Director or legal representative must meet
managerial competency and professional qualification requirements and
credentials prescribed in Article 138 herein.
4. The applicant for such business licence and
permit must choose their business type in accordance with this Law and must
have the draft charter conforming to the regulations of the Corporate Law.
5. In order to be licensed or permitted to
contribute capital to establish; purchase shares or ownership interest making
up at least 10% of charter capital of an insurance brokerage company, the
entity incorporated under foreign law must satisfy the following conditions:
a) It must be an entity established under domestic
law of a foreign country that is directly involved in or has their subsidiary
render insurance brokerage services during 05 consecutive years promptly before
the date of submission of application for the business license or permit;
b) It must be licensed or permitted to establish their
insurance brokerage company in Vietnam, and must be certified not to commit any
serious violation against law on insurance brokerage of the country where their
head office is located, by the competent authority of the foreign country
within 03 consecutive years immediately before the date of submission of
application for the business license or permit.
1. Each set or package of
application documents for a business licence or permit must be comprised of the
followings:
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b) Company’s draft charter;
c) First five years’ business
plan, including clear description of proposed service activities;
d) Resume, police record,
duplicate copy of certificate or qualification indicating professional
competency and expertise of the nominee for the Chairperson of the Managing
Board or the Chairperson of the Board of Members, Director or General Director
or legal representative;
dd) Rate and method of capital
contribution; list of founding entities or persons or members or shareholders
that intend to contribute at least 10% of the charter capital; and documents
evidencing compliance with the conditions set out in Article 133 herein.
2. The Government shall impose
detailed regulations on conditions, documentation requirements, procedures and
processes for application for business licenses or permits of insurance
brokerage companies.
Regulations on organization and
operation of an insurance brokerage company, including the business type;
ownership percentage of the foreign investor; time limit for issuance of the
business license or permit; authority to issue, reissue, revise, modify, revoke
or withdraw the business license or permit, or terminate any service or
business; announcement of contents of the business license or permit;
revocation or withdrawal of the business license or permit, shall be subject to
the regulations laid down in Article 62, 68, 70, 71, 72 and clause 1 and 3 of
Article 75 herein.
1. In order to make any change in
the following information, insurance brokerage companies need to seek the
written approval from the Ministry of Finance:
a) Corporate name or head office’s
address;
b) Amount of charter capital;
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d) Assignment of shares or
ownership interests that helps shareholders or members contributing capital to
own at least 10% of charter capital, or cause shareholders or members
contributing capital to own less than 10% of charter capital;
dd) Chairperson of the Managing
Board or Chairperson of the Board of Members, Director or General Director;
e) Business split-up, split-off,
merger, amalgamation and transformation into another business type;
establishment of new branches, representative offices, and other types of
commercial establishment in foreign countries.
2. Insurance brokerage companies
need to notify the Ministry of Finance in writing within 15 days after making
the following changes:
a) Company’s charter;
b) Opening, termination and
relocation of the branch or representative office.
3. Within 10 days of receipt of
the written consent to any changes prescribed in clause 1 of this Article from
the Ministry of Finance, the Ministry of Finance shall be responsible for
posting updated information on the Web Portal of the Ministry of Finance.
4. The Government shall impose detailed regulations
regarding application conditions, procedures, documentation requirements and
processes for approving changes referred to in clause 1 of this Article, and
documentation requirements, application procedures and processes for recording
the changes referred to in point b of clause 2 of this Article.
1. Insurance brokerage companies
shall have the following rights:
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b) Gain proceeds from provision of
insurance ancillary services;
c) Gain proceeds from other
activities related to insurance contracts that are requested by policyholders;
d) Reserve other rights prescribed
by law.
2. Insurance brokerage companies
shall take on the following rights:
a) Ensure privacy and security for
information provided by clients, insurance companies, reinsurance companies and
foreign branches in Vietnam, except as requested by the competent regulatory
authority or agreed by clients, insurance companies, reinsurance companies and
foreign branches in Vietnam;
b) Pay clients compensation for
any loss or damage caused during the process of rendering insurance brokerage
services;
c) Disclose pieces of information
authorized by the Minister of Finance to clients;
d) Separately account for and
track collections or payments authorized by insurance companies, reinsurance
companies or foreign branches in Vietnam;
dd) Purchase professional
liability insurance plans tailored for insurance brokerage services;
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3. Insurance brokerage companies
shall be prohibited from performing the following acts:
a) Prevent policyholders or
insured persons from providing information related to insurance contracts or
incite policyholders or insured persons not to give details about insurance
contracts;
b) Do promotion in the form of
promises to provide illegal benefits to incite clients to enter into insurance
contracts;
c) Incite policyholders to nullify
insurance contracts remaining in effect to purchase new insurance contracts;
d) Recommend clients to buy
insurance bound by less competitive requirements, terms and conditions at
insurance companies or branches of foreign non-life insurance companies than
those at others in order to earn higher insurance brokerage commission;
dd) Provide clients with false
information or information irrelevant to insurance requirements, terms and
conditions imposed by insurance companies or branches of foreign non-life
insurance companies.
1. Chairpersons of the Managing Boards,
Chairpersons of the Boards of Members, members of the Managing Boards, members
of the Boards of Members, Directors or General Directors, legal
representatives, Vice Directors or Deputy General Directors, Chief Accountants,
heads of operations departments of insurance brokerage companies must satisfy
qualification, experience and other requirements and credentials under the
Government’s regulations.
2. Persons directly involved in
the insurance brokerage sector must hold at least undergraduate degrees in the
insurance major or insurance practicing certificates appropriate for the types
of insurance or insurance brokerage practicing certificates conferred by
legally-licensed domestic or foreign training institutions according to the
Ministry of Finance’s regulations.
3. Insurance brokerage companies
must maintain the rate or amount of their charter capital and equity that is
not less than the required minimum requirement of charter capital and must
carry out insurance regimes under the Government’s regulations.
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5. Insurance brokerage companies
shall follow the instructions on reporting regime of the Minister of Finance
with respect to the following reports:
a) Financial report;
b) Periodic operations report;
irregular, information or other data report.
6. Foreign-invested insurance
brokerage companies may remit or transfer earnings and property abroad as per
Article 107 herein.
7. Insurance brokerage companies
shall follow financial management regulations laid down in Article 108 herein.
8. Insurance brokerage companies
shall post information about financial statements that have been audited and
any changes relying upon the Ministry of Finance’s approval or consent as
prescribed in clause 1 of Article 136 herein and the information prescribed in
point a, b and e of clause 1 of Article 120 herein on their websites. Responsibilities
for information disclosure shall be subject to Article 117 herein.
1. Insurance brokerage training course or program
shall mainly comprise:
a) General knowledge about insurance and insurance
services;
b) Principles, responsibilities and code of ethics
for practising as an insurance broker;
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d) Insurance brokerage skills and practising as an
insurance broker.
2. The Minister of Finance shall
impose detailed regulations on training program or curriculum, application
requirements, procedures and processes for certification testing, issuance,
revocation, withdrawal and reissuance of insurance brokerage practising
certificates issued by legally-licensed domestic insurance training
institutions.
1. Insurance companies and
branches of foreign non-life insurance companies can provide insurance
ancillary services for insurance companies, reinsurance companies, foreign
branches in Vietnam, insurance brokerage companies or mutuals providing microinsurance
products.
2. Insurance brokerage companies
can provide insurance ancillary services for insurance companies, reinsurance
companies, foreign branches in Vietnam, insurance brokerage companies, mutuals
providing microinsurance products, other entities or persons.
3. Other entities having legal
personality can provide insurance ancillary services for insurance companies,
reinsurance companies, foreign branches in Vietnam, insurance brokerage
companies or mutuals providing microinsurance products.
4. Persons can provide consulting
services for insurance companies, reinsurance companies, foreign branches in
Vietnam, insurance brokerage companies or mutuals providing microinsurance
products.
1. Honesty, impartiality,
transparency; protecting legitimate rights and interests of stakeholders.
2. Conforming to regulatory
standards in the insurance ancillary service sector.
3. Adherence to the rules of
professional ethics issued by socio-professional organizations.
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1. Protect client’s privacy and
information security; use client’s information for permissible purposes; avoid
providing information for any third party without client’s permission, except
as provided in law.
2. Insurance brokerage companies
shall not be allowed to provide loss assessment services for insurance
contracts that they have arranged to conclude.
3. Entities providing insurance
ancillary services can provide loss assessment services and support for payment
of insurance claims against insurance contracts whereunder these entities are
also policyholders, insured persons or beneficiaries.
4. Persons providing consulting
services must buy professional liability insurance providing coverage and
protection for provision of consulting services; entities providing insurance
ancillary services must buy professional liability insurance specific to types
of insurance ancillary service.
1. In order to be licensed to
render insurance ancillary services, a person providing consulting services
must meet the following conditions:
a) He/she has full civil capacity;
b) He/she holds at least an
undergraduate decree on the insurance major. If not, he/she must hold at least
an undergraduate degree on any other major and must complete the practicing
certificate in the insurance ancillary service, including the consulting
activity, issued by legally-licensed domestic or foreign training institutions.
2. In order to be licensed to
render insurance ancillary services, an entity providing insurance ancillary
services must meet the following conditions:
a) They must have legal
personality; be legally permitted or licensed for their establishment and
operation;
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c) Their staff members directly
involved in loss assessment services must meet the conditions prescribed in
point b of this clause and other credentials as assessors in accordance with
law on commerce;
d) Their staff members directly
involved in actuarial services must meet the conditions prescribed in point b
of this clause and other credentials as actuaries.
3. The Government shall elaborate
point b, c and d of clause 2 of this Article.
4. The Minister of Finance shall impose detailed
regulations on types of practising certificates of insurance ancillary
services, training program or curriculum, documentation requirements,
application procedures and processes for certification testing, issuance,
reissuance, revocation or withdrawal of practising certificates of insurance
ancillary services.
MICROINSURANCE
A microinsurance product shall have the following
basic characteristics:
1. It must be concise, easy to understand; needs to
involve streamlined or simplified actuarial procedures; or requires no
actuarial service.
2. It merely includes insurance benefits to meet
basic demands for protection against life, health and property risks for
participants in coverage plans that last no more than 05 years;
3. The sum insured per an insurance contract and
annual costs of coverage for each insured person in a contract shall not exceed
the maximum limit specified in the Government’s regulations.
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2. Entities providing microinsurance products must
register and obtain the Ministry of Finance’s consent to the insurance premium
calculation method and basis for microinsurance products.
3. The Government shall impose detailed regulations
on measures specified in clause 1 of this Article provided that these
regulations are aligned with developmental orientations and socio-economic
conditions over periods of time; detailed regulations on documentation
requirements, procedures and processes for registration for premium calculation
methods and bases to be applied to microinsurance products.
4. The Minister of Finance shall impose detailed
regulations on premium calculation methods and bases to be applied to
microinsurance products.
1. Entities providing microinsurance products,
including:
a) Insurance companies, branches of foreign
non-life insurance companies established and operated in Vietnam;
b) Mutuals providing microinsurance products that
are established and operated in Vietnam.
2. The Government shall impose detailed regulations
on procedures and processes for issuance, reissuance, revision, modification,
withdrawal or revocation of business licenses or permits, or termination of
services offered by mutuals providing microinsurance products.
3. The Ministry of Finance shall be vested with
authority to issue, reissue, revise, modify, withdraw or revoke business
licenses or permits, or terminate services offered by mutuals providing
microinsurance products.
1. Insurance companies and branches of non-life
insurance companies can, on their own account, provide microinsurance products
that are relevant to authorized insurance services:
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b) via insurance agents;
c) via any person who is a staff member or member
of a socio-political organization, socio-professional organization or
cooperative authorized by insurance companies or branches of foreign non-life
insurance companies to provide counsels on or make arrangement for conclusion
of insurance contracts on behalf of such organization or cooperative;
d) in other permissible ways.
2. Insurance companies and branches of non-life
insurance companies must track, manage and account for revenues and expenses
arising from provision of microinsurance products separately from those arising
from services rendered by others.
1. Mutuals providing microinsurance products can
only provide microinsurance products for their own members. Members
participating in insurance plans must be both owners of mutuals providing
microinsurance products and policyholders.
2. Insurance contracts between mutuals providing
microinsurance products and members participating in insurance plans must
conform to general regulations on insurance contracts, life insurance
contracts, health insurance contracts and property insurance contracts prescribed
in Chapter II herein.
3. The Government shall impose detailed regulations
on provision of microinsurance products by mutuals providing microinsurance
products.
1. Conditions of a founding member, including:
a) If that member is a person, he/she must be a
Vietnamese citizen having full civil capacity and a member of the entity
proposing establishment of the mutual providing microinsurance products;
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2. The amount of Vietnamese-dong contribution must
not be less than the minimum limit under the Government’s regulations.
3. Any nominee for a Chairperson of the Managing
Board, Director or General Director, legal representative or actuary of
microinsurance products must meet the conditions and standards under the
Government’s regulations.
4. A plan to offer microinsurance products that is
in place must allow for the number of members and the network of the mutual to
be established.
5. The available draft charter must be in line with
business objectives of the mutual providing microinsurance products and conform
to the Government’s regulations.
6. The available information technology system must
be appropriate; can give support for or track activities of specific
microinsurance contracts; can help in financial and accounting matters related
to microinsurance.
1. Mutuals providing microinsurance service shall
practise their financial autonomy and bear sole responsibility before law
within the scope of property formed from rendering of microinsurance services.
2. Mutuals providing microinsurance
products shall be responsible for managing and supervising performance;
complying with regulations on financial regimes in order to ensure financial
security, successful implementation of obligations and commitments to members
participating in insurance, concerned entities and persons under law.
3. Mutuals providing
microinsurance products shall be responsible for carrying out risk management
practice in order to effectively control risks arising from offering
microinsurance products.
4. All of profits earned from offering
microinsurance products by mutuals providing microinsurance products can be
accessible to serve the interest of members participating in insurance plans by
means of reduction in insurance premiums, increase in insurance benefits of the
insured, support for members and assistance in accomplishment of other
objectives as per the charters of mutuals providing microinsurance products.
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STATE MANAGEMENT OF INSURANCE BUSINESS
1. The Government shall carry out its uniform state
management of insurance business.
2. The Ministry of Finance shall be held
accountable to the Government for its state management of insurance business
and shall have the following duties and entitlements:
a) Promulgate or seek competent authorities’
approval of promulgation and instructions on implementation of legislative
documents on insurance business, formulation of strategies, projects and
policies for development of Vietnam’s insurance market;
b) Conduct statistics and forecast of the insurance
market;
c) Supervise insurance companies, reinsurance
companies and foreign branches in Vietnam, mutuals providing microinsurance
products and insurance brokerage companies through their rendering of services,
financial status, corporate management, risk management and compliance with law
on insurance business; supervise performance of foreign representative offices
in Vietnam;
d) Supervise performance of insurance agents and
insurance ancillary services through insurance companies, reinsurance companies
and foreign branches in Vietnam;
dd) Examine and inspect insurance companies,
reinsurance companies and foreign branches in Vietnam, mutuals providing
microinsurance products and insurance brokerage companies; examine performance of
foreign representative offices in Vietnam;
e) Ensure international cooperation in the
insurance sector;
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1. The Ministry of Finance shall
cooperate with state foreign insurance authorities on management, supervision,
inspection and examination of foreign branches in Vietnam in accordance with
the Government’s regulations.
2. The Ministry of Finance shall
establish the mechanism for sharing of administrative and supervisory
information with the State Bank of Vietnam, Ministries, other central
authorities and socio-professional organization in the insurance industry.
3. The Ministry of Finance shall
cooperate with relevant Ministries and central authorities on affiliation and
cooperation between the insurance sector and the social or health insurance
sector under the state control.
4. Business registration agencies
shall not be allowed to accept the use of the phrase or term “insurance”,
“reinsurance” or the like in a company’s name if such use can result
in the confusion to such an extent that the company is wrongly considered an
insurance company, reinsurance company or foreign branch in Vietnam.
5. Business registration agencies
shall not be allowed to accept the use of the phrase or term “insurance
brokerage”, “reinsurance brokerage” or the like in a company’s
name if such use can result in the confusion to such an extent that the company
is wrongly considered an insurance brokerage company.
1. During the process of examination, inspection
and handling of administrative offences arising in the insurance business, in
addition to the duties and powers prescribed in law on inspection, law on
handling of administrative offences and other regulatory provisions of relevant
law, the Ministry of Finance shall have the following duties and powers:
a) Request shareholders,
capital-contributing members, managers, controllers, staff members of insurance
companies, reinsurance companies, foreign branches in Vietnam or insurance
brokerage companies to give explanations about and provide information,
documents and data related to the scope of inspection and examination activities;
b) Request entities and persons possessing
information, documents and data related to the scope of inspection and
examination of the insurance business to provide these information, documents
and data, or request entities or persons to give explanations about and contact
it to deal with issues related to the scope of examination and inspection;
c) Request credit institutions or
foreign bank branches to provide information related to accounts of insurance
companies, reinsurance companies, foreign branches in Vietnam, insurance
agents, insurance brokerage companies, insurance ancillary service providers,
fund management companies of insurance companies, foreign representative
offices in Vietnam and entities or persons suspected of committing the prohibited
acts specified in Article 9 herein, or committing violations against
regulations on capital adequacy ratios, investment of insurance companies,
reinsurance companies, foreign branches in Vietnam, financial safety and
solvency referred to in Article 95, 99, 100, 109 and 110 herein. Procedures and
processes for requesting and providing information shall be subject to
regulatory provisions on banking.
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3. Information provided by credit
institutions, foreign bank branches, entities and persons as per this Article
must be secured as per regulatory provisions and can only serve the purposes of
inspection, examination and sanctioning of administrative offences of related
entities or persons.
1. State insurance business authorities shall
perform the functions of specialized inspection of insurance business.
2. Where necessary, in order to carry out the
specialized inspection of insurance business, those authorities specified in
clause 1 of this Article can hire independent audit bodies, consulting
companies or specialists to assess and give professional comments on several
matters that are alleged to cause any impacts on inspectees’ safety and health
where necessary, including:
a) Technical provisions;
b) Solvency;
c) Reinsurance;
d) Investment;
dd) Separate management of equity and insurance
premiums, and distribution of surpluses;
e) Rules, terms and conditions and tariff of
insurance premiums.
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4. Organization and operation of insurance business
inspectorates shall be subject to regulations of this Law and legislation on
inspection.
IMLEMENTATION PROVISIONS
Article 155. Amendments and
supplements to Appendix IV to Law on Investment 61/2020/QH14 amended or
supplemented by Law No. 03/2022/QH15
Amending, supplementing the sector
or industry No. 29 and adding the sector or industry No. 29a underneath No.29
of Appendix IV on the Conditional Industry Classification as follows:
“29. Insurance brokerage
29a. Insurance ancillary services”
1. This Law is entering into force
as from January 01, 2023, unless otherwise prescribed in clause 2 of this
Article.
2. Clause 3 of Article 86; clause
4 and 5 of Article 94; Article 95; clause 3 and 4 of Article 99; Article 109,
110, 111, 112, 113, 114 and 116 herein shall take effect as of January 1, 2028.
3. Law
on Insurance Business No. 24/2000/QH10 amended and supplemented according to
the Law No. 61/2010/QH12 and Law No. 42/2019/QH14 shall be expired after the
entry into force of this Law, except in the following cases:
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b) Article 77, 78, 79, 80, 81, 83, 94 and 98 of the
Law on Insurance Business No. 24/2000/QH10 that have been amended and
supplemented according to Law No. 61/2010/QH12 and Law No. 42/2019/QH14 shall
be abolished by end of December 31, 2027.
1. Insurance contracts that have
been entered into before the effective date of this Law and remain valid can
continue to apply in accordance with legislation at the time of conclusion of
insurance contracts, except when contracting parties are agreed on amendments
and supplements thereto to make them aligned with this Law and apply
regulations of this Law.
2. Insurance agent practising
certificates issued before the entry into force of this Law can continue to be
used till end of December 31, 2025. Minister of Finance shall impose detailed
regulations on transformation from insurance agent practising certificates
issued before the entry into force of this Law into new ones referred to in
this Law.
3. Insurance practising
certificates, insurance agent practising certificates and certificates of
practising in insurance ancillary services that have been issued before the
entry into force of this Law shall continue to be used.
4. As from January 1, 2023,
insurance companies and branches of foreign non-life insurance companies shall
cease paying into the Fund for protection of insured persons.
5. Disposal and management of
balance of the Fund for protection of insured persons stipulated in Article 97
in the Law on Insurance Business No. 24/2000/QH10 amended and supplemented by
the Law No. 61/2010/QH12 and the Law No. 42/2019/QH14 shall be subject to the
following regulations:
a) All balance existing in the
Fund for protection of insured persons shall be in the custody of the Ministry
of Finance to serve the purposes of protecting insured persons’ interests when
insurance companies are declared insolvent or bankrupt;
b) The Government shall impose
detailed regulations on management and use of balance of the Fund for
protection of insured persons.
This Law is passed in the 3rd plenum
of the XVth National Assembly of the Socialist Republic of Vietnam
on June 16, 2022.
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CHAIRMAN
Vuong Dinh Hue
