Circular No. 02/TC-TCNH guides the amendment and supplementation of the implementation of insurance commission regimes. This document classifies insurance operations and specifies the maximum commission rate applicable to each type of operation, while clearly identifying entities not entitled to receive insurance commissions.
Scope of application
Insurance enterprises, insurance brokerage organizations, insurance agents, insurance cooperative organizations, and parties involved in insurance contracts.
Key points
- Types of insurance operations are clearly classified such as voluntary health insurance, property, cargo transportation, hull and civil liability of shipowners, aviation, motor vehicles, fire, credit, business, agriculture, compulsory insurance.
- The maximum commission rate applicable to each type of insurance operation is specified concretely. For example, the maximum commission rate for hull and civil liability of shipowners insurance for ocean vessels is 0.16%, for inland waterway vessels and fishing vessels it is 10%.
- Insurance enterprises are not permitted to pay insurance commissions to Representative Offices of foreign economic organizations in Vietnam in any form.
- The maximum insurance commission rate applicable to comprehensive insurance contracts is the total of the commission rates for each type of insurance operation within that contract.
- The maximum commission rate specifically applicable to construction and installation insurance operations is 5%.
🌐 Social impact of this document
- beneficiary: Insurance enterprises and insurance brokerage organizations can conduct more effective insurance transactions with the defined commission rates.
- Insurance enterprises incur increased costs when they cannot pay commissions to Representative Offices of foreign economic organizations.
❓ Frequently asked questions
What is the maximum commission rate applicable to hull and civil liability of shipowners insurance for ocean vessels?
The maximum commission rate applicable to hull and civil liability of shipowners insurance for ocean vessels is 0.16%.
Which types of insurance operations are stipulated in this Circular?
This Circular stipulates types of insurance operations such as voluntary health insurance, property, cargo transportation, hull and civil liability of shipowners, aviation, motor vehicles, fire, credit, business, agriculture, compulsory insurance.
Are insurance enterprises allowed to pay commissions to Representative Offices of foreign economic organizations?
No, insurance enterprises are not permitted to pay insurance commissions to Representative Offices of foreign economic organizations in any form.
What is the maximum commission rate specifically applicable to construction and installation insurance operations?
The maximum commission rate specifically applicable to construction and installation insurance operations is 5%.
When does this Circular take effect?
This Circular takes effect from January 1, 1996.
Full text
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MINISTRY OF FINANCE -------------- |
SOCIALIST REPUBLIC OF VIETNAM ------------------------------- |
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Number: 02/TC-TCNH |
Hanoi, January 4, 1996 |
CIRCULAR
Guidelines for Amending and Supplementing the Implementation of Commission Regulations for Insurance
On October 25, 1995, the Ministry of Finance issued Circular No. 76-TC/TCNH stipulating insurance commission regulations. To facilitate the effective implementation of these regulations from the beginning of 1996, the Ministry of Finance provides guidelines to amend and supplement certain points as follows:
I. REGARDING THE CLASSIFICATION OF INSURANCE BUSINESS
The types of insurance business specified in the "Table of Maximum Commission Rates for Various Types of Insurance Business" attached to Circular No. 76-TC/TCNH dated October 25, 1995, are understood as follows:
1.1. Voluntary health insurance is personal accident insurance including various insurance contracts signed based on human life to cover medical expenses such as personal accident insurance, student accident insurance, passenger accident insurance, surgical treatment insurance, tourist insurance...
1.2. Property insurance and damage insurance include various insurance contracts covering property against risks of damage and loss to the insured person (excluding those insurance businesses mentioned below) such as construction and installation insurance, theft insurance...
1.3. Goods transportation insurance by road, sea, river, rail, and air includes various insurance contracts signed to cover goods and assets against risks of damage and loss during transportation, such as export and import goods insurance, domestic goods transportation insurance...
1.4. Hull insurance and shipowner's liability:
a. Marine, river, and fishing vessel hull insurance includes various insurance contracts signed to cover the hull of marine, river, and fishing vessels, machinery, and equipment thereof...
b. Shipowner's liability insurance includes various insurance contracts signed to cover the civil liability of the carrier for all damages arising from the use and operation of the vessel, including liability towards third parties.
1.5. General liability insurance includes various insurance contracts signed to cover the owner and operator of the business for liabilities arising from the use and operation of premises, products, services provided, and contractual liabilities...
1.6. Aviation insurance:
a. Aircraft insurance includes various contracts signed to cover the aircraft body, engines, and equipment...
b. Carrier's liability insurance includes various contracts signed to cover the carrier's liability for damages arising from the use and operation of the aircraft, including liability towards third parties...
1.7. Motor vehicle insurance:
a. Vehicle body insurance includes various contracts signed to cover the motor vehicle body, machinery, and equipment thereof...
b. Motor vehicle owner's liability insurance includes various contracts signed to cover the civil liability of the motor vehicle owner for all damages arising from the use and operation of the motor vehicle, such as passenger liability insurance...
1.8. Fire insurance includes various contracts signed to cover assets against losses and damages caused by fire, explosion, or similar risks...
1.9. Credit and financial risk insurance includes various contracts signed to cover losses of the lender arising from the borrower's inability to pay due debts and losses arising from financial risks such as excessively high costs, currency exchange rate losses...
1.10. Business interruption insurance includes various contracts signed to cover losses of the insured party due to business disruption or reduction in business scale...
1.11. Agricultural insurance includes various contracts for crop, livestock, and harvest insurance against losses caused by natural disasters and unexpected accidents...
1.12. Compulsory insurance: any compulsory insurance business as prescribed by current laws, such as compulsory third-party liability insurance for motor vehicles according to Decree No. 30-HĐBT dated March 10, 1988 of the Council of Ministers (now the Government) on the system of compulsory civil liability insurance for motor vehicles and Decision No. 504-TC/BH dated November 20, 1991 of the Minister of Finance on the issuance of rules and premium rates for motor vehicle insurance...
II. REGARDING THE APPLICATION OF COMMISSION RATES FOR INSURANCE
1. The table of commission rates for insurance stipulated is the maximum level for insurance companies to implement various types of insurance businesses permitted to operate. During implementation, insurance companies specifically apply these rates to insurance agents, insurance cooperative organizations, and insurance brokers without exceeding the maximum level prescribed. For comprehensive insurance, the total commission payment will be the sum of the commission rates for each type of insurance business within that comprehensive insurance contract.
2. For hull insurance and shipowner's liability insurance, to align with practical insurance operations, based on the general maximum rate stipulated in Circular No. 76-TC/TCNH dated October 25, 1995, it is now detailed as follows:
- For marine and river-sea hybrid vessel hull insurance and shipowner's liability insurance, the maximum commission rate applicable is 0.16%.
- For river and fishing vessel hull insurance and shipowner's liability insurance, the maximum commission rate applicable is 10%.
3. For insurance businesses related to property insurance and damage insurance, to facilitate insurance companies in attracting services and properly insuring construction projects in accordance with Decree No. 177-CP dated October 20, 1994 of the Government on the issuance of the Management Regulation for Investment in Construction; Circular No. 105-TC/ĐT dated December 8, 1994 of the Ministry of Finance guiding insurance for construction projects; Decision No. 663-TC/QĐ-TCNH dated June 24, 1995 of the Minister of Finance promulgating the Rules on All-Risk Insurance for Construction; Rules on All-Risk Installation Insurance; Premium Rates for Construction and Installation Insurance, the maximum commission rate now stipulated specifically for construction and installation insurance business is 5%.
4. In cases where insurance brokerage organizations conduct insurance brokerage services for insurance companies permitted to operate in Vietnam, foreign-invested enterprises, and foreign parties participating in joint venture contracts in Vietnam, the insurance commission rate shall be applied based on the agreement between the insurance company and the brokerage organization, in compliance with Vietnamese law and international practices.
III. REGARDING OBJECTS NOT ELIGIBLE FOR INSURANCE COMMISSIONS
Insurance companies are not permitted to pay insurance commissions to Representative Offices of foreign economic organizations in Vietnam in any form.
IV. IMPLEMENTATION PROVISIONS
This Circular takes effect from January 1, 1996. Insurance companies and insurance brokerage organizations are responsible for strictly implementing the insurance commission system stipulated in Circular No. 76 TC/TCNH dated October 25, 1995 and the guidance provided in this Circular issued by the Ministry of Finance.
During implementation, if there are difficulties or obstacles, they should be promptly reported to the Ministry of Finance for consideration and resolution.
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||| Article 2. General provisions regarding foreign non-governmental organizations operating in Vietnam (as stipulated from Article 5 to Article 15 of the Decree): (Signed) Nguyen Sinh Hung |
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