Circular No. 115/2013/TT-BTC guiding retirement insurance and voluntary retirement funds

CIRCULAR

Guidelines for retirement insurance and voluntary retirement funds

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Pursuant to the Law on Insurance Business No. 24/2000/QH10 dated December 9, 2000;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Insurance Business Law No. 61/2010/QH12 dated November 24, 2010;

The Minister of Finance hereby promulgates this Circular amending and supplementing some articles of Circular No. 124/2012/TT-BTC dated July 30, 2012 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Insurance Business Law and Decree No. 123/2011/NĐ-CP dated December 28, 2011 of the Government detailing the implementation of certain provisions of the Law amending and supplementing some articles of the Insurance Business Law (hereinafter referred to as "Circular No. 124/2012/TT-BTC") and Circular No. 125/2012/TT-BTC dated July 30, 2012 of the Ministry of Finance guiding the financial regime for insurance companies, reinsurance companies, insurance brokerage companies and branches of foreign non-life insurance companies (hereinafter referred to as "Circular No. 125/2012/TT-BTC").

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Management and Supervision of Insurance;

The Minister of Finance issues this Circular to guide on retirement insurance and voluntary retirement funds.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. This Circular guides the implementation of retirement insurance and voluntary retirement funds as prescribed in Clause 1, Article 1 of the Law Amending and Supplementing Certain Provisions of the Insurance Business Law 2010.

Article 2. This Circular applies to life insurance companies implementing retirement insurance (hereinafter referred to as insurance companies) and related organizations and individuals within the territory of the Socialist Republic of Vietnam.

Article 3. Retirement Insurance

Clause 1. Retirement insurance is a life insurance product implemented by insurance companies to provide additional income for insured persons upon reaching retirement age.

Clause 2. Retirement insurance includes individual retirement insurance and group employee retirement insurance. In the case of group employee retirement insurance (hereinafter referred to as group retirement insurance), the policyholder is the employer, and employees will receive all benefits of the insurance contract after a certain period agreed upon by the parties and recorded in the insurance contract.

Clause 3. Based on the premium payments made by the policyholder, the insured person begins to receive retirement insurance benefits when reaching the age stipulated in the insurance contract, but not less than fifty-five years old for females and sixty years old for males.

Clause 4. Basic benefits include periodic retirement benefits and risk insurance benefits.

Clause 5. Each insured person under an individual retirement insurance contract or a group retirement insurance contract has a separate retirement insurance account as provided for in this Circular.

Article 4. Voluntary Retirement Fund

Clause 1. A voluntary retirement fund is formed from premiums and consists of the retirement insurance accounts of insured persons.

Clause 2. When implementing retirement insurance, insurance companies must establish a voluntary retirement fund, monitor, segregate, and record separately the revenues, expenses, assets, and capital of the voluntary retirement fund from other main contract funds and owner funds.

Article 5. Conditions for Insurance Companies Implementing Retirement Insurance Products

When implementing retirement insurance products, insurance companies must meet the following conditions:

Clause 1. Capital not less than one thousand billion Vietnamese dong;

Clause 2. Solvency margin higher than the minimum solvency margin by three hundred billion Vietnamese dong;

Clause 3. Establish a voluntary retirement fund in accordance with Section 2, Chapter II of this Circular;

Clause 4. Information technology system to track and manage each transaction of the retirement insurance account in detail;

Clause 5. At least five (5) direct managers of the voluntary retirement fund with at least five (5) years of experience managing a retirement fund or a main contract fund;

Clause 6. Sales agents for retirement insurance products must meet the conditions stipulated in Article 25 of this Circular;

Clause 7. The retirement insurance product must be approved by the Ministry of Finance.

PART II

SPECIFIC PROVISIONS

Section 1

Provisions on Retirement Insurance Products

Article 6. Basic Benefits of Retirement Insurance Products

Clause 1. Insurance companies may design retirement insurance products independently but must include periodic retirement benefits and risk insurance benefits as prescribed in Clauses 2 and 3 of this Article.

Clause 2. Regarding periodic retirement benefits, insurance companies must ensure:

Point a. Retirement benefits are paid periodically until the death of the insured person or for a minimum of fifteen (15) years, whichever is agreed upon in the insurance contract;

Point b. The insurance company and the policyholder agree on the amount of retirement benefit per period and the number of periods for receiving retirement benefits;

Point c. Accumulated interest on unpaid retirement benefits is calculated for the policyholder, but not less than the minimum guaranteed investment return rate agreed upon in the insurance contract.

Clause 3. Regarding risk insurance benefits, the insurance company must provide these benefits during the premium payment period and may continue to provide them during the receipt of retirement benefits period, as agreed upon in the insurance contract. Risk insurance benefits include at least the following:

Point a. Funeral allowance: Upon receiving a claim for death benefit, regardless of whether it falls within the scope of coverage, the insurance company must immediately pay the funeral allowance to the beneficiary as stipulated in the insurance contract;

Point b. Death or total permanent disability benefit: - When the insured person dies or suffers total permanent disability within the scope of coverage and during the specified period, the insurance company pays the beneficiary the sum insured as agreed upon in the insurance contract; - The policyholder can choose the sum insured at the time of entering into the insurance contract and adjust the sum insured during the validity of the insurance contract as stipulated in the insurance contract.

Article 6. Supplementary Insurance Benefits

1. In addition to basic insurance benefits, depending on the agreement in the insurance contract, the insurance company may provide additional supplementary insurance benefits as follows:

a) Adjustment benefit for periodic pension entitlements;

b) Unemployment insurance benefit;

c) Medical care benefit;

d) Hospitalization support benefit;

đ) Insurance benefit for dependents;

e) Critical illness insurance benefit;

g) Other supplementary benefits as agreed upon in the insurance contract.

2. The method of paying premiums for supplementary insurance benefits shall be agreed upon by the parties when concluding the insurance contract. The insurance company is not permitted to deduct the premium for supplementary insurance benefits from the value of the voluntary retirement account.

Article 7. Premiums

1. Premiums are contributions made periodically or in a lump sum into the voluntary retirement fund according to the agreement in the retirement insurance contract.

2. Additional premiums are contributions made outside the regularly agreed-upon premiums in the insurance contract, invested into the voluntary retirement fund.

Article 8. Fees

1. The insurance company is entitled to deduct the following types of fees:

a) Deduction fees from collected premiums before allocating them to the retirement insurance account: Initial fees are used to cover costs related to issuing the insurance contract, insurance assessment costs, medical examination costs, agent commissions, and other expenses.

b) Types of fees deducted from the retirement insurance account:

- Risk insurance fee is the fee for risk insurance benefits as committed in the insurance contract.

 The insurance company has the autonomy to choose mortality tables and total permanent disability tables to calculate risk insurance fees. In all cases, the mortality rate applied must not exceed the CSO 1980 mortality table provisions and the total permanent disability rate must not exceed 10% of the CSO 1980 mortality table provisions set out in Appendix I issued together with this Circular;

- Management fee for maintaining the insurance contract is the fee to cover costs related to maintaining the insurance contract and providing information related to the contract to the policyholder;

- Fund management fee is used to pay for activities managing the voluntary retirement fund and shall not exceed 2% of the investment asset value of the fund in a year;

- Retirement insurance account transfer fee is the fee that the policyholder must pay to the current insurance company managing the retirement insurance account when transferring the account to a new insurance company.

The maximum retirement insurance account transfer fee for the first year of the insurance contract shall not exceed 5% of the transferred account value, for the second year (two) not more than 4%, for the third year (three) not more than 3%, for the fourth year (four) not more than 2%, and from the fifth year (five) onwards not more than 1%;

- Any other fees (if applicable) must be approved in writing by the Ministry of Finance.

2. The insurance company must accurately, fairly, and reasonably calculate the aforementioned fees, consistent with products approved by the Ministry of Finance and must inform the policyholder when concluding the retirement insurance contract.

3. The retirement insurance contract must clearly specify the maximum fees applicable to the policyholder. The insurance company must transparently and fully disclose the types of fees, methods of calculation, and fee rates applicable to the policyholder in product introduction materials and sales illustration documents.

Article 9. Approval for the Implementation of Pension Insurance Products

1. Insurance enterprises must obtain written approval from the Ministry of Finance before implementing pension insurance products.

2. The application dossier for the implementation of pension insurance products shall include:

a) A request for approval of the pension insurance product according to the form attached as Appendix II to this Circular;

b) The plan and explanation of the implementation schedule for the pension insurance product, including the following contents:

- Summary of the main content of the proposed pension insurance product, including information on the target market of the product and the expected insurance benefits; - The area where the pension insurance product is expected to be implemented;

- Explanation of the technical infrastructure ensuring the implementation of the pension insurance product, including: information technology system; accounting system; recruitment, training, and management process for distribution agents; content and training program for pension insurance agents; list and files of training staff for pension insurance agents;

- Basis for allocating insurance fees;

- Plan for handling situations involving the voluntary pension fund by the insurance enterprise, including: when customers request insurance money upon occurrence of an insured event; when customers request transfer of their pension insurance account; at maturity of the insurance contract, and other cases as stipulated in the rules and terms;

c) A written commitment accompanied by detailed explanations regarding the insurance enterprise's compliance with the conditions set forth in Article 4 of this Circular, along with certificates proving the qualifications, capabilities, and professional experience of the managers of the voluntary pension fund;

d) Rules, terms, and fee schedules for the proposed pension insurance product;

đ) Technical basis for the proposed pension insurance product, specifying formulas, methods, and explanations of the technical basis for calculating fees and setting aside reserves;

e) Product introduction materials, sales illustration materials, insurance application forms, insurance certificate forms, and other documents that customers must fill out and sign when purchasing insurance.

3. Within thirty (30) days from the date of receiving the complete dossier as prescribed in Clause 2 of this Article, the Ministry of Finance shall issue a written approval or rejection. In case of rejection, the Ministry of Finance shall clearly explain the reasons.

4. If the insurance enterprise applies to implement a new pension insurance product outside those already approved, the application dossier for approving the pension insurance product does not include the documents specified in Points b and c of Clause 2 of this Article, except in cases where these documents have changed since the time the pension insurance product was approved by the Ministry of Finance previously.

Section 2

Establishment and Management of Voluntary Pension Funds

Article 10. Establishment and Management of Voluntary Pension Funds

1. When establishing a voluntary pension fund, the insurance enterprise must use the owner's capital contribution to the voluntary pension fund not less than two hundred (200) billion VND and must maintain a minimum of two hundred (200) billion VND in the fund.

2. The voluntary pension fund shall be managed and utilized for investment in accordance with financial regulations applicable to life insurance enterprises and as stipulated in this Circular.

3. Assets of the voluntary pension fund consist of assets formed from insurance premiums, contributions from life insurance enterprises as prescribed in Clause 1 of this Article, and assets formed from investment profits from these sources. The insurance enterprise may not use assets of the voluntary pension fund to pay fines for legal violations, debts, and transactions unrelated to the voluntary pension fund.

4. All assets formed from insurance premiums of the voluntary pension fund belong to the insured person.

5. The legal representative, actuary, and chief accountant of the insurance enterprise are responsible for the accuracy of the separation of funds, determining the principles for allocating transactions related to assets, capital, revenue, and expenses to each fund.

Article 11. Provisions on investment of voluntary pension fund assets

1. The investment of voluntary pension fund assets must comply with legal regulations, bear responsibility for investment activities, ensure safety, efficiency, risk diversification, liquidity, and the value of invested assets should be commensurate with the responsibilities and specific risks of pension insurance products.

2. The assets of the voluntary pension fund shall not directly invest in real estate, gold, silver, precious metals, gemstones; nor shall they invest in shares of securities companies, financial companies, and financial leasing companies.

3. The investment portfolio and limits of voluntary pension fund assets are specified as follows:

a) Depositing funds at credit institutions without limitation, but not exceeding 20% of the total value of the voluntary pension fund's invested assets in one credit institution;

b) Purchasing government bonds without limitation, but not less than 40% of the total value of the voluntary pension fund's invested assets;

c) Corporate bonds guaranteed by the Government, local government bonds not exceeding 25% of the total value of the voluntary pension fund's invested assets;

d) Purchasing stocks, corporate bonds without guarantee, contributing capital to other corporations not exceeding 20% of the total value of the voluntary pension fund's invested assets. Investment in issued shares of a corporation, corporate bonds shall not exceed 5% of each issuance volume and shall not exceed 5% of the total value of the voluntary pension fund's invested assets.

4. Depending on changes in the financial market and investment operations, the Ministry of Finance may adjust the investment portfolio and limits prescribed in this Article.

Article 12. Fund Management Company

1. Insurance enterprises implementing pension insurance products have the right to manage and invest the assets of voluntary pension funds independently, or entrust a fund management company to invest the assets of voluntary pension funds, or hire a fund management company to manage the investment portfolio of voluntary pension fund assets according to the limits, objectives, and investment strategies of the voluntary pension fund and current legal provisions.

2. When participating in receiving mandates or managing the investment portfolio of voluntary pension fund assets, the fund management company must have at least three employees with at least three years of experience in managing pension funds or contract insurance funds or managing investment portfolios with an average investment period of more than five years. These employees must hold a fund management license issued by the State Securities Commission or be members of the CFA Institute or have a bachelor's, master's, or doctoral degree specializing in finance or investment.

3. The fund management company must open separate accounts to manage separately the investment assets from the voluntary pension fund of the insurance enterprise from other funds of the insurance enterprise and other clients. The fund management company shall not use the assets of the voluntary pension fund for any transaction or purpose other than those stipulated in the mandate agreement or investment portfolio management contract of the insurance enterprise.

4. The fund management company shall be responsible for any errors or losses caused by the mandate or management of the investment portfolio of voluntary pension fund assets.

Section III

Pension Insurance Account

Article 13. Retirement Insurance Account

1. The retirement insurance account is a collection of insurance premiums paid after deducting initial fees, opened, monitored, and managed separately for each insured person by the insurance company.

2. The insurance company must commit to a minimum investment interest rate for the retirement insurance account in the insurance contract. At the end of each fiscal year, the insurance company has the responsibility to announce the investment interest rate and the accumulated account value up to that point. The insurance company is responsible for using the assets of the owner's fund to make up for any shortfall compared to the committed interest rate for each retirement insurance account.

3. The insured person may not withdraw the retirement insurance account before reaching a certain age agreed upon in the insurance contract, except in cases stipulated in Article 14 of this Circular.

Article 14. Early Withdrawal of the Retirement Insurance Account

The insured person has the right to request the insurance company to allow early withdrawal of part or all of the value of the retirement insurance account in the following cases:

1. The insured person suffers from a reduction in working capacity of 61% or more as provided by current laws;

2. The insured person is diagnosed with a serious illness as provided by current laws.

Article 15. Transfer of the Retirement Insurance Account

1. When the insured person terminates the labor contract or loses their job and is no longer a member of the group retirement insurance contract, the insured person has the right to:

a) Transfer the value of the retirement insurance account from the group retirement insurance contract to an individual retirement insurance contract with the corresponding value at the same insurance company, or

b) Transfer their retirement insurance account to a new group retirement insurance contract of another insurance company. The new group retirement insurance contract may be at the same insurance company or another insurance company, depending on the new company.

2. For the case of transferring the retirement insurance account within the same insurance company, based on the payment confirmation document from the policyholder and the transfer request document from the insured person, the insurance company has the responsibility to transfer the account according to the insured person's request. The insurance company is not allowed to charge a transfer fee for the retirement insurance account.

3. For the case of transferring to a new group retirement insurance contract at a new insurance company, within five (5) working days from the date of receiving the request to transfer the retirement insurance account, with evidence proving that the insured person does not continue to participate in the group retirement insurance contract at the old company and is a member of the new group retirement insurance contract, the insurance company must transfer the entire accumulated value of the retirement insurance account to the receiving insurance company after deducting the transfer fee (if any).

4. The transferred value of the retirement insurance account will accumulate according to the agreement in the new group retirement insurance contract.

5. The receiving insurance company is not allowed to charge an initial fee for the transferred value of the retirement insurance account.

Article 16. Provisions on temporarily suspending the retirement insurance account

1. The policyholder and the insurer may agree to temporarily suspend the retirement insurance account in cases where they are unable to pay the insurance premium.

2. During the period of temporarily suspending the retirement insurance account, the insurer shall not be permitted to charge any fees to the policyholder. The value of the retirement insurance account will accumulate at the investment rate published annually by the insurer according to the agreement in the insurance contract. The insurer has no obligation to pay out insurance benefits during this period, except for periodic pension payments when the insured reaches a certain age or payment of the entire accumulated value of the retirement insurance account upon the death or permanent total disability of the insured.

3. The policyholder may request the insurer to restore the retirement insurance account and continue paying the insurance premium.

Section 4

Obligation to disclose information of the insurer

Article 17. Information on retirement insurance

1. The insurer has the responsibility to accurately, fully, and promptly provide the policyholder with all relevant information regarding the concluded retirement insurance contract. The information provided must be consistent with the approved retirement insurance product by the Ministry of Finance.

2. The insurer must establish a customer service department dedicated to answering and resolving any questions related to the retirement insurance contract.

3. After the approval of the retirement insurance product by the Ministry of Finance, the insurer has the responsibility to build a website on retirement insurance:

a) Guide the policyholder to set up their own retirement plan;

b) The policyholder can check the information of the retirement insurance contract and the advisory information from agents;

c) The insured can check the value of their individual retirement insurance account at each point in time;

d) Illustrative benefits for the retirement insurance product must clearly distinguish between guaranteed benefits and assumed benefits;

e) Publicly and update all rules and terms approved by the Ministry of Finance, product introduction materials, sales illustration materials, and the investment results of the voluntary retirement fund for the last five consecutive years;

4. The policyholder has the right to request the insurer to provide full information and explain the conditions and terms of the insurance contract to understand the risks associated with concluding the retirement insurance contract.

5. The insurer reports to the Ministry of Finance the results of the voluntary retirement fund's operations annually according to the form attached as Appendix III to this Circular.

Article 18. Retirement Insurance Contract

The retirement insurance contract must comply with the provisions of the law and include the following information:

1. Premiums paid by the policyholder and the insured;

2. The term of the retirement insurance contract including the premium payment period, accumulation period of premiums, and the period for receiving basic insurance benefits;

3. Responsibilities of the parties involved in the case of participating in group retirement insurance;

4. Options and benefits of the insured in the case of participating in a group retirement insurance contract;

5. Ratios, specific amounts, maximum levels, and methods of calculating premiums related to the retirement insurance contract;

6. Rights and obligations of the parties as prescribed by law;

7. Attach a table illustrating retirement benefits in the insurance contract;

8. Regulations on transferring the retirement insurance account as stipulated in Article 15 of this Circular.

Article 19. Product Introduction Documents

1. Product introduction documents must comply with legal regulations and contain at least the following information:

a) Investment policy, objectives, and asset structure of voluntary pension funds;

b) The ratio and maximum level of initial fees, risk insurance fees, contract management fees, voluntary pension fund management fees, pension insurance account transfer fees, and other fees;

c) The minimum investment return rate committed to the insurance buyer for the portion of insurance premiums allocated to the pension insurance account;

d) Basis and frequency for determining the value of the pension insurance account;

đ) Clear information for the insurance buyer that entering into a pension insurance contract is a long-term commitment and that the pension insurance account cannot be withdrawn before maturity except as provided for in Article 14 of this Circular;

2. Information in product introduction documents must be accurate, objective, complete, truthful, and consistent with the approved pension insurance products by the Ministry of Finance.

Article 20. Sales Illustration Documents

Sales illustration documents must comply with legal regulations and the following requirements:

1. Pension insurance sales illustration documents must be provided to the insurance buyer prior to entering into the insurance contract and include the minimum information set forth in Appendix IV issued together with this Circular;

2. Clearly explain to the insurance buyer the benefits they may receive upon entering into a pension insurance contract, including risk insurance benefits and periodic pension benefits;

3. Fees and maximum limits that the insurance buyer must pay must be clearly stated based on the separation between insurance premium fees for risk insurance benefits and other fees;

4. In cases where the pension insurance contract includes supplementary insurance benefits, the insurer must clearly present these supplementary benefits and their impact on the insurance buyer and insured party in the sales illustration documents.

5. Sales illustration materials must be clearly presented and easy to understand.

Article 21. Notifications Regarding Insurance Contract Status

1. Pension Insurance Account Notification: Within ninety (90) days from the end of the fiscal year or contract year, the insurer has the responsibility to notify the insured party in writing or via email about the status of the pension insurance contract according to the model form set forth in Appendix V issued together with this Circular.

2. Notification on the Operation Results of Voluntary Pension Funds: Within ninety (90) days from the end of the fiscal year, the insurer must notify the insurance buyer and insured party in writing about the following contents:

a) Summary information on the operation status of voluntary pension funds according to the model form set forth in Appendix VI issued together with this Circular;

b) Operation status of voluntary pension funds over the last five (5) years or actual existence period of the fund if the fund's operational period is less than five (5) years;

d) Details on investment benefits already distributed and expected to be allocated to the pension insurance account in the reporting year;

đ) Confirmation by an independent auditing company regarding the above information.

Article 22. Language Used

The language used in documents and information related to retirement insurance products shall be Vietnamese. For product introduction materials and sales illustration materials, the font used shall be Times New Roman with a minimum size of 13 (thirteen) or another equivalent font size, and must comply with the provisions of this Circular.

Section 5

Solvency and reserve

Article 23. Solvency

1. Life insurance enterprises must always maintain solvency in accordance with the provisions of the law.

2. The minimum solvency margin of an insurance enterprise is the sum of 4% of business reserves and 0.3% of the amount of risk-insured money.

3. The solvency margin of an insurance enterprise must always be higher than the minimum solvency margin by VND 300 billion (three hundred billion).

Article 24. Establishment of Reserves

1. The insurance company must establish an operational reserve as follows:

a) Insurance risk reserve: is the larger amount between the reserve calculated according to the unearned premium method and the reserve calculated according to the cash flow method to meet all future expenses throughout the term of the contract;

b) Claim reserve: is established on a case-by-case basis with the amount of establishment being calculated based on the statistical amount of insurance money payable for each claim requested from the insurance enterprise but not resolved by the end of the fiscal year;

c) Business reserve for retirement insurance accounts: is the total value of the retirement insurance account at the time of establishment;

d) Minimum investment return reserve: This reserve is used to ensure the minimum interest rate commitment of the enterprise to customers as agreed upon in the retirement insurance contract.

2. The actuary of the insurance enterprise is responsible for determining the methods, bases, and data of business reserves to always ensure commitments to policyholders according to widely recognized principles and calculation methods internationally.

Chapter 6

Insurance agents, insurance commissions, and insurance distribution

Article 25. Conditions for Insurance Agents

1. To launch retirement insurance products, insurance enterprises may only use insurance agents who meet the following conditions:

a) Hold an insurance agent certificate issued by a training institution approved by the Ministry of Finance;

b) Not violate the insurance agent ethical code of conduct of the insurance enterprise during their agency practice;

c) Have at least six (six) months of continuous experience in life insurance agency activities or six (six) months of continuous work in the financial, banking, or insurance sector.

2. The insurance enterprise shall be liable for any damage or loss caused by the activities of its insurance agents as stipulated in the insurance agency contract.

Article 26. Insurance Commissions

1. The maximum insurance commission for retirement insurance products is 3% of the total insurance premium.

2. An insurance enterprise is not permitted to pay insurance commissions for cases where the insured terminates an existing life insurance contract and joins a new retirement insurance contract with the enterprise.

3. An insurance enterprise is not allowed to pay any amounts other than insurance commissions and agency management costs to insurance agents. Agency management costs include initial training and certification examination fees, advanced knowledge training fees for agents, recruitment fees, incentive awards, and support fees for agents.

4. For insurance agents recruited from other insurance enterprises, the insurance enterprise can only pay insurance commissions and agency management costs as it does for current agents. Any other expenses (if any) must be taken from the post-tax profit of the owner's fund.

Article 27. Business Guidance

Insurance enterprises that launch pension insurance products must issue a business guidance manual for such products, monitor and manage the implementation of this manual, including or attaching the following documents:

1. Professional ethics rules in distributing pension insurance products;

2. Statistics on the quantity and status of life insurance contracts concluded with the insured party before concluding pension insurance contracts;

3. Documents proving that customers have read, been advised, and understood the pension insurance product;

4. Procedures and requirements for cross-checking the advisory results of the insurance enterprise regarding pension insurance contracts;

5. Business procedures related to the distribution of pension insurance products, task allocation, responsibilities, and coordination among departments and units within the insurance enterprise during the distribution process of pension insurance products;

6. Internal inspection and control over the implementation of pension insurance products in accordance with the law;

7. Regulations on responsibility for enhancing customer awareness about pension insurance products to ensure that customers understand contributions to and accumulation of pension insurance accounts, terms, fees, conditions, and clauses of insurance contracts.

Article 28. Distribution of Pension Insurance Products

Organizations and individuals distributing pension insurance products shall be responsible for:

1. Adhering to legal regulations governing insurance activities, contracts signed with insurance enterprises, and professional ethics rules issued by insurance enterprises;

2. Advising according to the prescribed procedures and other procedures issued by insurance enterprises;

3. Ensuring there are documents proving that customers have been fully advised, understand, and have been clearly explained about the benefits of the product, and recognize the specific characteristics of the chosen product before signing the insurance application form;

4. Reporting to the insurance enterprise the results of advising customers according to business guidance. This report is part of the insurance application form.

Chapter III

ORGANIZATION AND IMPLEMENTATION

Article 29. Supervision and Handling of Violations

1. Insurance enterprises, insurance agents, organizations, and individuals involved are subject to supervision by the Ministry of Finance during the implementation of pension insurance products in accordance with the law.

2. Insurance enterprises may not introduce or offer life insurance products outside the scope of pension insurance business as defined in this Circular under the name of pension insurance or other names that mislead customers into believing these products provide additional income for insured persons upon retirement.

3. Insurance enterprises, insurance agents, organizations, and individuals involved who violate the law will be dealt with according to legal provisions.

Article 30. Effective Date

1. This Circular takes effect from October 15, 2013.

2. During implementation, if there are difficulties or obstacles, they should be promptly reported to the Ministry of Finance for consideration and resolution./.