Circular No. 124/2012/TT-BTC guiding the implementation of certain Articles of Government Decree No. 45/2007/NĐ-CP dated March 27, 2007 detailing the implementation of certain provisions of the Insurance Business Law and Government Decree No. 123/2011/NĐ-CP dated December 28, 2011 detailing the implementation of certain provisions of the Law Amending and Supplementing Certain Provisions of the Insurance Business Law.

CIRCULAR

Guidelines for implementing 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 Certain Provisions of the Insurance Business Law.

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

Pursuant to Decree No. 123/2011/NĐ-CP dated December 28, 2011 detailing the implementation of certain provisions of the Law Amending and Supplementing Certain Provisions of the Insurance Business Law and amending and supplementing 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;

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

The Minister of Finance issues this Circular 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 Certain Provisions of the Insurance Business Law.

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This Circular guides the establishment and operation of life insurance companies, non-life insurance companies, health insurance companies, reinsurance companies, insurance brokerage companies, branches of foreign non-life insurance companies; the conduct of life insurance business, non-life insurance business, health insurance business, reinsurance business, insurance brokerage business, insurance agency business; the establishment and operation of representative offices of life insurance companies, non-life insurance companies, health insurance companies, reinsurance companies, foreign insurance brokerage companies in Vietnam.

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").

Life insurance companies, non-life insurance companies, health insurance companies, reinsurance companies, insurance brokerage companies, branches of foreign non-life insurance companies, insurance agencies, and related organizations and individuals are responsible for complying with the provisions of this Circular and relevant laws; ensuring fair competition and cooperation, and preventing monopolistic practices in insurance business activities.

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;

The terms used in this Circular shall be understood as follows:

1. Insurance company means a life insurance company, a non-life insurance company, a specialized health insurance company, a reinsurance company, and an insurance brokerage company.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

2. Insurance business company means a life insurance company, a non-life insurance company, and a specialized health insurance company.

Article 2. Applicability

3. Insurance joint-stock company means a life insurance joint-stock company, a non-life insurance joint-stock company, a specialized health insurance joint-stock company, a reinsurance joint-stock company, and an insurance brokerage joint-stock company.

Article 3. Explanation of Terms

4. Limited liability insurance company means a life limited liability insurance company, a non-life limited liability insurance company, a specialized health insurance limited liability company, a reinsurance limited liability company, and an insurance brokerage limited liability company.

5. Foreign branch means a foreign non-life insurance company branch.

6. Commercial bank means a bank established and operating legally in Vietnam.

3. A joint-stock insurance company is a joint-stock life insurance company, a joint-stock non-life insurance company, a joint-stock company specializing in health insurance business, a joint-stock reinsurance company, and a joint-stock insurance brokerage company.

4. A limited liability insurance company is a limited liability life insurance company, a limited liability non-life insurance company, a limited liability company specializing in health insurance business, a limited liability reinsurance company, and a limited liability insurance brokerage company.

5. A foreign branch is a branch of a foreign non-life insurance company.

6. A commercial bank is a bank established and operating legally in Vietnam.

Chapter II

SPECIFIC PROVISIONS

Section 1

LICENSE ISSUANCE FOR ESTABLISHMENT AND OPERATION

Article 4. General Conditions for Issuing a Business Registration Permit

1. Organizations and individuals contributing capital to establish insurance enterprises must meet the conditions stipulated in Article 63 of the Insurance Business Law, Clause 8, Article 1 of the Law Amending and Supplementing Certain Provisions of the Insurance Business Law, and Point a, Clause 1, Article 6 of Decree No. 45/2007/NĐ-CP. Foreign non-life insurance enterprises establishing branches in Vietnam must meet the conditions stipulated in Clause 1, Article 9 of Decree No. 123/2011/NĐ-CP.

2. Insurance enterprises must have a subscribed charter capital not less than the statutory capital as prescribed in Article 4 of Decree No. 46/2007/NĐ-CP (for insurance enterprises and insurance brokerage enterprises), Clause 4, Article 43 of Decree No. 123/2011/NĐ-CP (for reinsurance enterprises). The foreign branch must have a granted capital not less than the statutory capital as prescribed in Point a, Clause 1, Article 19 of Decree No. 123/2011/NĐ-CP.

3. Organizations and individuals contributing capital must submit an application for a Business Registration Permit in accordance with Article 64 of the Insurance Business Law, Article 7 of Decree No. 45/2007/NĐ-CP (for life insurance enterprises, non-life insurance enterprises, and insurance brokerage enterprises), Article 40 of Decree No. 123/2011/NĐ-CP (for health insurance enterprises), Clauses 2 and 3, Article 43 of Decree No. 123/2011/NĐ-CP (for reinsurance enterprises). Non-life insurance enterprises establishing branches in Vietnam must submit an application in accordance with Article 10 of Decree No. 123/2011/NĐ-CP.

4. The proposed insurance enterprise must have a business form and bylaws consistent with the Insurance Business Law and related laws. The foreign branch must have organizational and operational regulations consistent with the Insurance Business Law and related legal documents.

5. The proposed management and operation personnel of the insurance enterprise and foreign branch must meet the conditions regarding management capacity and professional expertise as stipulated in Article 13 of Decree No. 45/2007/NĐ-CP (for insurance enterprises) and Clause 2, Article 12 of Decree No. 123/2011/NĐ-CP (for foreign branches) and the guidelines of the Ministry of Finance.

6. The insurance enterprise and foreign branch must have technical facilities, equipment, and information technology systems to be able to operate after being issued a Business Registration Permit.

Article 5. Conditions for Issuing a Business Registration Permit for Insurance Enterprises

In addition to the general conditions stipulated in Article 4 of this Circular, organizations and individuals contributing capital to establish insurance enterprises must also meet the following additional conditions:

1. For the establishment of an insurance joint-stock company

1.1. There must be at least two founding shareholders who are organizations. For a reinsurance joint-stock company, the organizational shareholders must operate in the financial, banking, or insurance sectors.

1.2. The subscribed charter capital structure must comply with the following provisions:

a) One individual shareholder may own up to 10% of the charter capital;

b) One organizational shareholder may own up to 20% of the charter capital;

c) Shareholders and related parties may own up to 20% of the charter capital;

d) The founding shareholders must collectively own at least 50% of the ordinary shares that can be offered by the insurance joint-stock company within a minimum period of three (03) years from the date the company is issued a Business Registration Permit.

1.3. Contributing organizations must meet the following conditions:

a) They must use their own equity capital and cannot use borrowed funds or entrusted investment funds from other organizations or individuals to participate in capital contribution; their equity capital minus long-term investments formed from equity capital must be greater than the amount of capital planned to be contributed to the insurance enterprise in the year immediately preceding the year of submitting the application for a Business Registration Permit;

b) Organizations participating in capital contributions of 10% or more of the charter capital must have been operating profitably and without cumulative losses in the three (03) years immediately preceding the year of submitting the application for a Business Registration Permit;

c) They must have a minimum equity capital equal to 50% of the statutory capital of the insurance enterprise; they can contribute capital up to 25% of their own equity capital;

d) If the contributing organization is an insurance enterprise, commercial bank, or finance company, these organizations must ensure they maintain and meet the capital safety conditions and other financial conditions as prescribed by specialized laws.

1.4. Contributing individuals must meet the following conditions:

a) They must use their own capital and cannot use borrowed funds or entrusted investment funds from other organizations or individuals to contribute capital.

b) They must prove their ability to contribute capital in cash: confirmation from a bank about the balance of Vietnamese dong (including savings deposits) or freely convertible foreign currency in their account at the bank (the minimum balance must be equal to the amount of capital participation). The bank's confirmation date must not exceed thirty (30) days from the date of submitting the application for a Business Registration Permit.

2. For the establishment of an insurance limited liability company (LLC)

2.1. The investing organization participating in capital contribution must be a legal entity, including:

a) Vietnamese organizations participating in capital contribution must meet the conditions stipulated in Clause 2, Article 39 of Decree No. 123/2011/NĐ-CP (for insurance enterprises), Clause 3, Article 43 of Decree No. 123/2011/NĐ-CP (for reinsurance enterprises).

b) Foreign organizations participating in capital contribution must meet the conditions stipulated in Clauses 2 and 3, Article 6 of Decree No. 45/2007/NĐ-CP.

2.2. Contributing organizations must meet the conditions stipulated in Point 1.3, Clause 1 of this Article.

Article 6. Conditions for Issuing a License to Establish and Operate a Foreign Branch

A foreign insurance company wishing to establish a foreign branch in Vietnam must meet the conditions stipulated in point c and point d, Clause 2, Article 9 of Decree No. 123/2011/NĐ-CP; and the provisions set forth in Article 4, paragraph a and paragraph b, point 1.3, Clause 1, Article 5 of this Circular.

Article 7. Documents for Application for a License to Establish and Operate

1. An application form for a license to establish and operate according to the model prescribed in Appendix 1 issued together with this Circular.

2. Draft Articles of Organization and Operation (for insurance companies) or draft Rules of Organization and Operation (for foreign branches). The draft Articles of Organization and Operation of an insurance company must be fully signed by the authorized representatives of all parties involved in capital contribution as required by law. The draft Rules of Organization and Operation of a foreign branch must be approved by the foreign non-life insurance company.

3. Business operation plan for the first five years of the insurance company, foreign branch including the following main contents:

a) General assessment of the business operation plan of the insurance company, foreign branch in the context of the market, including challenges and prospects;

b) Assessment of the ability to compete on the market of the insurance company, foreign branch to be established, demonstrating the advantages of the company, branch when entering the market;

c) Detailed analysis of the insurance businesses, customer targets, and the network to be deployed;

d) Conditions for implementing insurance businesses in accordance with the law (for conditional insurance businesses);

đ) Strategy of the insurance company, foreign branch in expanding the operational network;

e) Projected business results, revenue, compensation for each business, management costs, financial investment plans from equity capital and business reserve funds. The projected indicators must be based on sound grounds and assumptions;

g) Draft procedures for exploitation, appraisal, compensation, internal control, financial management and investment, reinsurance program management;

h) Projected method of setting aside business reserves in accordance with Decree No. 46/2007/NĐ-CP and guiding documents;

i) Projected solvency margin in accordance with Decree No. 46/2007/NĐ-CP and guiding documents;

k) Investment plan for information technology, specifying: scale of investment, time frame for implementation, type of technology to be applied, capability of applying information technology in the operations of the insurance company, foreign branch;

l) Organizational structure diagram; description of functions of each department; organizational structure and number of staff in each department; initial and ongoing training plans of the insurance company, foreign branch.

4. List, curriculum vitae, certified copies of documents proving the qualifications and professional expertise of managerial positions of the insurance company, foreign branch. For the position of Chairman of the Board of Directors (Board of Members, Company Chairman), General Director (Director) of the insurance company and the position of General Director (Director) of the foreign branch, a criminal record must be provided.

5. Documents related to shareholders (or members) who are founders or contribute 10% or more of the charter capital:

5.1. For shareholders (or members) contributing capital as organizations:

a) Certified copy of the Decision on Establishment, Operating Permit, and Business Registration Certificate of the organization participating in capital contribution within three (03) months from the date of submitting the application for a license;

b) Articles of Organization and Operation of the contributing organization;

c) Document of the competent authority deciding to participate in the establishment of the insurance company, foreign branch in Vietnam;

d) Authorization document for the representative of the contributing organization specifying the duration of authorization and the matters authorized (if any). The representative must have valid personal identification documents (certified copies) as required by law;

đ) Audited financial statements for the last three (03) consecutive years prior to the submission of the application and documents proving the ability to contribute capital as stipulated in point 1.3, Clause 1, Article 5 of this Circular.

5.2. For shareholders (or members) contributing capital as individuals:

a) Valid personal identification documents (certified copies) and criminal record as required by law;

b) Documents proving the ability to contribute capital as stipulated in point 1.4, Clause 1, Article 5 of this Circular.

5.3. Confirmation from a commercial bank regarding the registered capital at the frozen account in the bank, including the registered capital contributed by each founder shareholder (or member) or those contributing 10% or more of the registered capital.

5.4. Commitment letter from shareholders (or members) contributing capital stating that the capital for establishing the insurance company, foreign branch is legal and not borrowed or entrusted under any form.

6. Rules, terms, and premium rates of insurance products to be implemented. This provision does not apply to applications for a license to establish and operate a brokerage insurance company.

7. Evidence proving the construction and establishment of technical facilities for insurance business operations including:

a) Right to use the location for the headquarters and branches (if any) of the company to be established;

b) Establishment of a ready infrastructure system, equipment, and information technology software to support business activities, monitor compliance with legal regulations and internal processes of the insurance company, foreign branch.

Article 8. Documents for Application to Obtain Insurance Company Establishment and Operation License

1. The documents for application to obtain the establishment license of a joint-stock insurance company include the following materials:

a) The documents stipulated in Article 7 of this Circular;

b) Minutes of meetings of shareholders regarding:

- Agreement on capital contribution to establish a joint-stock insurance company, accompanied by a list of founding shareholders or those contributing 10% or more of the charter capital;

- Approval of the draft Charter governing the organization and operation of the joint-stock insurance company.

c) Minutes on the authorization of one representative of the shareholders to be responsible for handling the procedures to apply for the establishment license of the joint-stock insurance company.

d) Commitment letters from shareholders participating in capital contributions confirming compliance with the regulations on the charter capital structure as stipulated in point c, Clause 1.2, Article 5 of this Circular.

2. The minutes specified in points b and c of Clause 1 of this Article must bear the signatures of all founding shareholders participating in capital contributions.

Article 9. Documents for Application to Obtain Insurance Limited Liability Company Establishment and Operation License

The documents for application to obtain the establishment license of a limited liability insurance company include the following materials:

1. The documents stipulated in Article 7 of this Circular.

2. Minutes of meetings of shareholders (for applications to establish a limited liability company with two or more members) regarding:

- Agreement on capital contribution to establish a limited liability insurance company, accompanied by a list of founding members or those contributing 10% or more of the charter capital;

- Approval of the draft Charter governing the organization and operation of the limited liability insurance company.

3. Joint venture agreement (for cases where domestic organizations and foreign organizations jointly contribute capital to establish a limited liability insurance company with two or more members).

4. A document from the competent authority of the country where the shareholder's main office is located (for foreign shareholders) confirming:

a) The shareholder is permitted to establish an insurance business in Vietnam;

b) The shareholder has not seriously violated regulations on insurance business operations and other laws of the country where the shareholder's main office is located in the three (03) consecutive years prior to submitting the application for the license;

c) A document from the competent authority of the country where the shareholder's main office is located confirming that the shareholder is in sound financial condition as of the end of the fiscal year immediately preceding the application for the license.

In case the laws of the country where the shareholder's main office is located do not provide for a competent authority issuing such confirmation, evidence confirming this must be provided.

5. Power of attorney for the person expected to be appointed as General Director (Director) in Vietnam (for applications to obtain the license to establish a single-member limited liability company) and legal personal identification documents of the authorized person (certified copies) as prescribed by law.

Article 10. Documents for Application to Obtain Foreign Branch Establishment and Operation License

The documents for application to obtain the establishment and operation license of a foreign branch include the materials stipulated in Clause 6, Clause 7, and Clause 8 of Article 10 of Decree No. 123/2011/ND-CP and the documents stipulated in Article 7 of this Circular.

Article 11. Procedures for Issuing Establishment and Operation Licenses

1. Applications for issuance of establishment and operation licenses for insurance companies and foreign branches shall be submitted to the Ministry of Finance in three (03) sets, of which at least one (01) set must be the original. For applications for issuance of licenses for foreign insurance companies or foreign partners, each set shall consist of one copy in Vietnamese and one copy in English. Documents containing signatures, titles, and seals from foreign countries in the application for the license must be legalized by consular authorities. Vietnamese certified copies and translations from foreign languages into Vietnamese must be authenticated according to the provisions of the law. Shareholders shall be responsible for the accuracy of the application for the establishment and operation license.

2. Within thirty (30) days from the date of receipt of the shareholder's application for the license, if the documents are incomplete or invalid, the Ministry of Finance will notify the shareholder in writing to supplement and amend the documents. The maximum period for shareholders to supplement and amend the documents is six (06) months from the date of notification. If the shareholder fails to supplement and amend the documents within the prescribed time limit, the Ministry of Finance will issue a document rejecting the consideration for issuance of the license. The period for considering and issuing the license shall only be counted from the date when the application for the license is complete and valid.

3. Within sixty (60) days from the date of receipt of the shareholder's complete and valid documents, based on the results of the actual assessment by the Ministry of Finance of technical facilities, the Ministry of Finance will issue the establishment and operation license for insurance companies and foreign branches according to the model prescribed in Appendix 2 issued together with this Circular.

Article 12. Matters that insurance companies and foreign branches must undertake before officially commencing operations

1. Within thirty (30) days from the date of issuance of the establishment and operation license, insurance companies and foreign branches must complete the following procedures:

a) Completing the appointment procedures for the Chairman of the Board of Directors (Chairman of the Board of Members, Chairman of the Company), General Director (Director) of the insurance company; General Director (Director) of the foreign branch;

b) Announcing operations in accordance with Clause 1, Article 9 of Decree No. 45/2007/ND-CP (for insurance companies) and Clause 1, Article 15 of Decree No. 123/2011/ND-CP (for foreign branches).

2. Within twelve (12) months from the date of issuance of the establishment and operation license, insurance companies and foreign branches must complete the following procedures to officially commence insurance business operations:

a) Paying the licensing fee to the state budget as prescribed by law;

b) Converting the amount of funds held in a blocked account into charter capital (or capital granted) after obtaining the establishment and operation license from the Ministry of Finance;

c) Depositing the required security deposit as stipulated in Article 6 of Decree No. 46/2007/ND-CP (for insurance companies) and Clause 2, Article 19 of Decree No. 123/2011/ND-CP (for foreign branches) in a commercial bank.

d) Affixing seals, registering tax codes, opening transaction accounts at banks in accordance with the provisions of the law;

đ) Implementing procedures to request the Ministry of Finance:

- Approving the method for establishing reserves according to the provisions of the law. This provision does not apply to insurance brokerage enterprises;

- Approving proposed insurance products, approving the title of calculation experts, approving the method for separating funds and distributing surplus between the owner's fund and the participating policyholder's fund (for life insurance enterprises);

- Approving health insurance products (for insurance enterprises and foreign branches operating health insurance business);

e) Issuing procedures for exploitation, appraisal, compensation, internal control, financial management and investment, reinsurance program management.

3. If more than twelve (12) months have passed since the date of issuance of the Business Registration Certificate, if the insurance enterprise or foreign branch has not commenced operations, the Ministry of Finance will revoke the Business Registration Certificate issued to the enterprise or branch.

Section 2

AMENDMENT OF BUSINESS REGISTRATION CONTENT

Article 13. Changing the name of insurance enterprises and foreign branches

1. Insurance enterprises and foreign branches wishing to change their names must submit to the Ministry of Finance one set of documents including the following:

a) A request for changing the name of the enterprise or branch in the format prescribed in Appendix 3 attached to this Circular;

b) An approval document from the competent authority as stipulated in the Charter on Organization and Operation (for insurance enterprises) or the Regulation on Organization and Operation (for foreign branches) regarding the change of the name of the enterprise or branch.

2. Within twenty-one (21) days from the date of receipt of complete files as stipulated in Clause 1 of this Article, the Ministry of Finance shall issue an amended Business Registration Certificate in the format prescribed in Appendix 7 attached to this Circular. In case of refusal, the Ministry of Finance must clearly state the reasons in writing.

Article 14. Increasing or decreasing the charter capital (or authorized capital)

1. Insurance enterprises wishing to change the charter capital, foreign branches wishing to change the authorized capital must submit to the Ministry of Finance one set of documents including the following:

a) A request for changing the charter capital (or authorized capital) in the format prescribed in Appendix 3 attached to this Circular;

b) An approval document from the competent authority regarding the change of the charter capital (or authorized capital);

c) The plan for increasing the charter capital (or authorized capital). The content of the plan for increasing the charter capital (or authorized capital) needs to clearly specify:

- The need for increased capital and its usage;

- The business efficiency based on the new charter capital (or authorized capital);

- The management capability, management capacity, and supervision ability of the insurance enterprise or foreign branch over the increased scale of capital and corresponding operational scale;

- The feasibility of the capital increase plan: total additional capital, methods and time limit for raising capital.

d) A list of shareholders (or members) expected to hold ten percent (10%) or more of the charter capital of the insurance enterprise after the capital increase; documents proving that these shareholders (or members) meet the conditions stipulated in Clause 1 of Article 4 and Article 5 of this Circular (this provision does not apply to shareholders (or members) who already hold ten percent (10%) or more of the charter capital of the insurance enterprise before the capital increase).

đ) The plan for reducing the charter capital (or authorized capital) must prove that the insurance enterprise or foreign branch ensures sufficient payment of debts and other property obligations after the reduction of capital. Reduction of charter capital is not allowed for a limited liability company with one member.

2. Within fourteen (14) days from the date of receipt of complete valid files as stipulated in Clause 1 of this Article, the Ministry of Finance shall notify in writing about the approval or rejection of the request to change the charter capital (or authorized capital). In case of rejection, the Ministry of Finance must clearly state the reasons.

For the case of increasing the charter capital through public share issuance, after being approved in principle by the Ministry of Finance, the insurance enterprise shall implement the issuance in accordance with the Securities Law.

3. Within six (06) months from the date of approval by the Ministry of Finance of the request to change the charter capital (or authorized capital), the insurance enterprise or foreign branch must complete the capital change and submit to the Ministry of Finance one (01) set of documents including:

a) A summary report on the results of implementing the charter capital (or authorized capital) change compared to the approved capital change plan;

b) Evidence proving that shareholders (or members) contributing additional capital have fully paid the increased capital to the enterprise or branch (in the case of capital increase); evidence proving that the enterprise or branch has completed the payment and settlement to shareholders (or members) contributing capital for the reduced amount (in the case of capital reduction).

In case the approved capital change plan cannot be implemented, the insurance enterprise or foreign branch must report to the Ministry of Finance a handling plan.

4. Within seven (07) working days from the date of receipt of complete valid files as stipulated in Clause 3 of this Article, the Ministry of Finance shall issue an amended Business Registration Certificate in the format prescribed in Appendix 7 attached to this Circular.

Article 15. Opening or terminating operations of branch offices and representative offices

1. Opening branch offices and representative offices of insurance enterprises

a) Insurance enterprises wishing to open branch offices and representative offices must meet the conditions stipulated in Clause 1, Article 11 of Decree No. 45/2007/ND-CP and the following specific guidelines:

- Shareholders' equity and subscribed charter capital must comply with the requirements set forth by law;

- Not having been subject to administrative penalties totaling VND 200 million or more for violations in the field of insurance business within twelve (12) months prior to the date of submitting the application to open a branch office or representative office;

- Having an appropriate information technology system that ensures support for the operational activities of the insurance enterprise;

b) The application to open a branch office or representative office shall be carried out in accordance with Clause 2, Article 11 of Decree No. 45/2007/ND-CP and the following specific guidelines:

- A request letter to open a branch office or representative office in the format prescribed in Appendix 3 attached hereto;

- An approval document from the competent authority as stipulated in the Charter on organization and operation of the insurance enterprise regarding the establishment of a branch office or representative office;

- A criminal record, diplomas/certificates (certified copies) proving the qualifications of the person proposed to head the branch office or representative office;

- Evidence proving the work experience of the person heading the branch office or representative office;

- Evidence proving that the person heading the branch office or representative office has terminated their employment contract with the previous employer;

- A draft Regulation on organization and operation of the branch office or representative office ensuring compliance with legal regulations and the Charter on organization and operation of the insurance enterprise;

- Evidence of the right to use the location for the headquarters of the branch office or representative office;

- Evidence proving that the planned branch office or representative office has established an information technology software system meeting the requirements stipulated in point a, Clause 1 of this Article.

c) Within twenty-one (21) days from the date of receipt of a complete and valid application as stipulated in point b, Clause 1 of this Article, the Ministry of Finance shall issue a document approving or rejecting the application based on the actual review results. In case of rejection, the Ministry of Finance must clearly state the reasons. In case of approval, the Ministry of Finance shall issue an Adjusted License in the format prescribed in Appendix 7 attached hereto.

d) Branch offices and representative offices of insurance enterprises must commence operations officially within six (06) months from the date of issuance of the license by the Ministry of Finance. If this period is exceeded without commencing operations, the Adjusted License will be revoked.

2. Terminating operations of branch offices and representative offices of insurance enterprises

a) When terminating the operations of a branch office or representative office, insurance enterprises must submit to the Ministry of Finance one (01) set of application documents for termination of operations including the following documents:

- A request letter to terminate the operations of a branch office or representative office in the format prescribed in Appendix 3 attached hereto;

- An approval document from the competent authority as stipulated in the Charter on organization and operation of the insurance enterprise regarding the termination of operations of a branch office or representative office (original);

- A report on the operational status of the branch office or representative office in the last three (03) years. In cases where the branch office or representative office has operated for less than three (03) years, a report on the operational status since its commencement of operations shall be provided;

- Responsibilities, issues arising, and solutions when terminating the operations of a branch office or representative office.

b) Within twenty-one (21) days from the date of receipt of a complete and valid application as stipulated in point a of this clause, the Ministry of Finance shall issue a document approving or rejecting the application. In case of rejection, the Ministry of Finance must clearly state the reasons. In case of approval, the Ministry of Finance shall issue an Adjusted License in the format prescribed in Appendix 7 attached hereto.

3. Procedures for opening or terminating operations of branch offices and representative offices of insurance enterprises abroad shall be carried out in accordance with the laws on insurance business and foreign investment and must be approved by the Ministry of Finance. The procedures for requesting approval shall follow current legal provisions.

Article 16. Changing the location of the main office, branch offices, representative offices, and business locations

1. Insurance enterprises wishing to change the location of their main office, branch offices, or representative offices; and foreign branches wishing to change the location of their main office must submit to the Ministry of Finance one (01) set of application documents including the following documents:

a) A request letter to change the location of the main office, branch offices, or representative offices in the format prescribed in Appendix 3 attached hereto;

b) An approval document from the competent authority as stipulated in the Charter on organization and operation (for insurance enterprises) or the Regulation on organization and operation (for foreign branches) regarding the change of the location of the main office, branch offices, or representative offices;

c) Evidence of the right to use the location for the main office, branch offices, or representative offices.

2. Within twenty-one (21) days from the date of receipt of a complete and valid application as stipulated in Clause 1 of this Article, the Ministry of Finance shall issue a document approving or rejecting the application. In case of rejection, the reasons must be explained.

3. Within fifteen (15) days from the date of changing the business location (including both opening and closing operations), insurance enterprises and foreign branches must notify the Ministry of Finance and customers about the changes.

Article 17. Changing Content, Scope, and Duration of Operations

1. Insurance enterprises and foreign branches wishing to expand the content, scope, and duration of their operations must meet the conditions stipulated in Clause 1 of Article 12 of Decree No. 45/2007/NĐ-CP and the specific guidance below:

a) Shareholders' equity and subscribed capital (or authorized capital) must comply with the requirements set forth by law;

b) They must not have been subject to administrative penalties totaling VND 200 million or more for violations in the insurance business within twelve (12) months prior to the date of submitting the application to expand the content, scope, and duration of operations;

c) In cases where the content and scope of operations are expanded, the head of the newly expanded operation must meet the standards specified in Article 28 of this Circular;

2. Insurance enterprises and foreign branches wishing to change the content, scope, and duration of their operations must submit to the Ministry of Finance one (01) set of application documents requesting approval;

3. The application documents for changing the content, scope, and duration of operations of insurance enterprises include the following materials:

a) A request letter to expand (or reduce) the content, scope, and duration of operations according to the model prescribed in Appendix 3 issued together with this Circular;

b) An approval document from the competent authority as stipulated in the enterprise's charter regarding the expansion (or reduction) of the content, scope, and duration of operations (original);

c) Rules, terms, and premium rates of new insurance products intended to be launched (if applicable) in cases of expanding the content and scope of operations;

d) Certified copies of certificates, diplomas, and other documents proving the qualifications, experience, and expertise of individuals expected to lead the newly expanded operations (for cases of expanding the content and scope of operations);

đ) Plans for handling ongoing insurance contracts and measures for dealing with obligations towards related parties in cases of reducing the content and scope of operations;

4. Application documents for changing the content, scope, and duration of operations of foreign branches shall be carried out in accordance with the provisions at point a, point b, and point đ of Clause 2 of Article 16 of Decree No. 123/2011/NĐ-CP;

5. Within twenty-one (21) days from the date of receiving complete and valid application documents as stipulated in Clause 3 of this Article (for insurance enterprises) and Clause 4 of this Article (for foreign branches), the Ministry of Finance will issue a response document approving or rejecting the application of the enterprise or branch. In case of rejection, the reasons must be clearly stated. In case of approval, the Ministry of Finance will issue an Adjusted License according to the model prescribed in Appendix 7 issued together with this Circular;

Article 18. Splitting, Dividing, Merging, Consolidating, and Converting Forms of Insurance Enterprises

1. The splitting, dividing, merging, consolidating, and converting forms of insurance enterprises shall be implemented in accordance with the provisions of the Enterprise Law, Article 16 of Decree No. 45/2007/NĐ-CP (for splitting, dividing, merging, and consolidating), Article 42 of Decree No. 123/2011/NĐ-CP (for converting forms), relevant laws, and specific guidelines in this Circular;

2. Organizations and individuals contributing capital to insurance enterprises after splitting, dividing, merging, consolidating, or converting forms must meet the conditions stipulated in Clause 1 of Article 4 and Article 5 of this Circular;

3. Insurance enterprises formed after splitting, dividing, merging, consolidating, or converting forms must meet the conditions stipulated in Clause 2, Clause 4, Clause 5, and Clause 6 of Article 4 of this Circular (corresponding to each type of enterprise established after splitting, dividing, merging, consolidating, or converting forms);

4. Splitting, dividing, merging, consolidating, or converting forms of insurance enterprises must not affect the rights and legitimate interests of policyholders, employees, and the State; ensuring the stable operation of insurance enterprises;

5. Splitting, dividing, merging, consolidating, or converting forms of insurance enterprises must be approved by the Ministry of Finance before implementation;

6. Procedures for requesting approval for splitting, dividing, merging, consolidating, or converting forms of insurance enterprises:

Before implementing splitting, dividing, merging, consolidating, or converting forms, insurance enterprises must submit to the Ministry of Finance one (01) set of application documents requesting approval, including the following materials:

a) A request letter to split, divide, merge, consolidate, or convert forms of insurance enterprises according to the model prescribed in Appendix 4 issued together with this Circular;

b) An approval document from the competent authority as stipulated in the enterprise's charter regarding the splitting, dividing, merging, consolidating, or converting forms of the enterprise;

c) A report on the plan for dividing and handling ongoing contracts with customers, debts, obligations to the State, and commitments to employees when splitting, dividing, merging, consolidating, or converting forms of insurance enterprises;

d) A list of shareholders (or members) contributing capital, subscribed capital, and the structure of subscribed capital of the insurance enterprise formed after splitting, dividing, merging, consolidating, or converting forms;

đ) A principle agreement on merger or consolidation (for cases of merger or consolidation, certified copy);

e) Opinions of the legally established and operating agency with the function of determining asset value, specifying the ratio of share conversion or valuation of contributed capital (for cases of merger or consolidation); determining the value of assets distributed to the parties (for cases of splitting or dividing insurance enterprises);

g) Audited financial statements for three (03) consecutive years preceding the year of application for merger or consolidation of the organization merging or consolidating with the insurance enterprise (certified copy). If the period from the end of the most recent fiscal year to the date of submission of the application for merger or consolidation exceeds ninety (90) days, the organization must submit additional quarterly financial reports up to the latest quarter.

h) Curriculum vitae, legal personal identification documents for new individual shareholders (or members) as prescribed by law; Business registration certificate for new organizational shareholders (or members) holding ten percent (10%) or more of the charter capital of the insurance company (certified true copy);

i) Certificates and diplomas proving the qualifications of the proposed new management and operational personnel of the insurance company after division, separation, merger, consolidation, or conversion (certified true copy);

k) Evidence proving that organizations or individuals contributing capital to the insurance company after division, separation, merger, consolidation, or conversion meet the conditions stipulated in Clause 2 of this Article;

l) Evidence proving that the insurance company formed after division, separation, merger, consolidation, or conversion meets the conditions stipulated in Clause 3 of this Article.

7. Within fourteen (14) days from the date of receiving complete valid files as prescribed in Clause 6 of this Article, the Ministry of Finance shall issue a notification approving or rejecting the proposed plan of the insurance company. In case of rejection, the reasons must be clearly stated.

Within seven (07) working days from the completion date of the division, separation, merger, consolidation, or conversion according to the approved plan, the insurance company must report to the Ministry of Finance on the implementation results. If the approved plan cannot be implemented, the insurance company must report to the Ministry of Finance on the handling plan.

Within seven (07) working days from the date of receiving the report from the insurance company on the implementation results of the division, separation, merger, consolidation, or conversion plan, the Ministry of Finance will issue the License for Establishment and Operation according to the model prescribed in Appendix 2 issued together with this Circular.

Article 19. Transfer of Shares or Contributed Capital Amounting to Ten Percent (10%) or More of the Charter Capital

The transfer of shares or contributed capital amounting to ten percent (10%) or more of the charter capital of an insurance company shall be carried out in accordance with the provisions of Point e, Clause 1, Clause 2 of Article 69 of the Insurance Business Law, Article 16 of Decree No. 45/2007/ND-CP, and the following guidelines:

1. The transfer of shares or contributed capital amounting to ten percent (10%) or more of the charter capital of an insurance company falls under one of the following cases:

a) The transfer resulting in an individual holding ten percent (10%) of the charter capital or an organization holding ten percent (10%) or more of the charter capital of the insurance company;

b) The transfer resulting in an individual no longer holding ten percent (10%) of the charter capital or an organization no longer holding ten percent (10%) or more of the charter capital of the insurance company.

2. Conditions for Implementation of Transfer:

2.1. The implementation of the transfer does not affect the rights and legitimate interests of policyholders, employees, and the State; ensuring the stable operation of the insurance company.

2.2. The transfer must be approved by the Ministry of Finance before implementation.

2.3. For the case where the transferee holds between ten percent (10%) and less than one hundred percent (100%) of the charter capital of the insurance company: the organization or individual receiving the transfer must meet the conditions stipulated in Clause 1 of Article 4 and Article 5 of this Circular (corresponding to each type of insurance company of the transferee).

2.4. For the case of transferring one hundred percent (100%) of the charter capital of the insurance company:

a) The organization or individual receiving the transfer must meet the conditions stipulated in Point 2.3, Clause 2 of this Article;

b) The insurance company formed after the transfer must meet the conditions stipulated in Clause 2, Clause 4, Clause 5, and Clause 6 of Article 4 of this Circular (corresponding to each type of insurance company).

3. Procedures for Requesting Approval of the Transfer

Before implementing the transfer, the insurance company must submit one (01) set of application files requesting approval to the Ministry of Finance. Foreign signatures, titles, and stamps in the files (if any) must be legalized by consular authorities. Vietnamese copies and translations from foreign languages into Vietnamese must be certified in accordance with the law. The parties involved in the transfer and the transferee must bear responsibility for the accuracy of the application files for approval of the transfer.

The application files for requesting approval of the transfer include the following documents:

3.1. A request for approval of the transfer according to the model prescribed in Appendix 5 issued together with this Circular.

3.2. An approval document from the competent authority as prescribed in the Articles of Organization and Operation of the insurance company regarding the implementation of the transfer.

3.3. For the case where the transferor and transferee are organizations: there must be a document from the authorized agency as prescribed in the Articles of Organization and Operation of the transferee (for the case of transfer specified in Point a, Clause 1 of this Article), of the transferor (for the case of transfer specified in Point b, Clause 1 of this Article) approving the implementation of the transfer;

3.4. The principle transfer agreement (if any);

3.5. For the case of transfer specified in Point 2.3, Clause 2 of this Article, the following additional documents must be supplemented:

a) Documents proving that the transferee meets the conditions stipulated in Point 2.3, Clause 2 of this Article;

b) List of shareholders (or members) contributing capital and the charter capital structure after the transfer has been implemented.

3.6. For the case of transfer specified in Point 2.4, Clause 2 of this Article, the following additional documents must be supplemented:

a) The documents specified in Subpoint a, Point 3.5, Clause 3 of this Article;

b) Documents proving that the insurance company formed after the transfer meets the conditions stipulated in Subpoint b, Point 2.4, Clause 2 of this Article.

Within twenty-one (21) days from the date of receiving complete and valid documents, the Ministry of Finance shall issue a document approving or rejecting the insurance company's request. In case of rejection, the reasons must be clearly stated. In case of approval, the Ministry of Finance shall issue an Amending License according to the form prescribed in Appendix 7 attached hereto or issue a License for Establishment and Operation according to the form prescribed in Appendix 2 attached hereto.

Article 20. Dissolution of Insurance Companies, Overseas Branches

1. Insurance companies dissolve under the cases stipulated in Article 82 of the Law on Insurance Business.

2. Prior to dissolution, the insurance company must submit to the Ministry of Finance one (01) set of documents requesting dissolution and obtain the approval of the Ministry of Finance.

3. The documents requesting the dissolution of an insurance company include:

a) A letter requesting dissolution and termination of operations;

b) The decision of the competent authority as prescribed in the Charter on Organization and Operations of the insurance company in the event of voluntary dissolution if it has the ability to settle all debts (original);

c) Evidence proving that all debts and financial obligations of the insurance company have been fulfilled, including:

- Report on fulfilling obligations towards employees as prescribed by law;

- Report on fulfilling debt obligations towards policyholders, including payment of due obligations under insurance contracts and transfer of insurance contracts as prescribed (for insurance operating companies);

- Report on fulfilling obligations to the State and other creditors;

- A certificate from the tax authority confirming the completion of tax obligations (certified copy).

d) The License for Establishment and Operation of the insurance company (original).

4. Within seven (07) working days from the date of receiving complete and valid documents as prescribed in Clause 3 of this Article, the Ministry of Finance shall issue a decision dissolving the insurance company.

5. Overseas branches shall implement dissolution and termination of operations as prescribed in Article 22 of Decree No. 123/2011/NĐ-CP.

Article 21. Change of Chairman of the Board of Directors (Chairman of the Board of Members, Company Chairman), General Director (Director) of Insurance Companies; General Director (Director) of Overseas Branches

1. Insurance companies, overseas branches must submit to the Ministry of Finance one (01) set of notification documents before appointing or changing the Chairman or General Director (Director) and obtain the approval of the Ministry of Finance.

2. The documents requesting the change of Chairman or General Director (Director) include the following:

- A letter requesting the change of Chairman or General Director (Director) according to the form prescribed in Appendix 3 attached hereto;

- The approval document of the competent authority as prescribed in the Charter on Organization and Operations (for insurance companies) or the Regulation on Organization and Operations (for overseas branches) regarding the change of Chairman or General Director (Director);

- Criminal record; lawful personal identification documents (certified copies) as prescribed by law; certificates and diplomas proving the qualifications and professional capabilities of the person proposed to be appointed as Chairman or General Director (Director) (certified copies);

- A commitment letter from the person proposed to be appointed as Chairman or General Director (Director) to work for the insurance company or overseas branch upon approval by the Ministry of Finance.

3. Within twenty-one (21) days from the date of receiving complete and valid documents as prescribed in Clause 2 of this Article, the Ministry of Finance shall issue a document approving or rejecting the request. In case of rejection, the Ministry of Finance must clearly state the reasons. If the Ministry of Finance does not respond within the above period, the request for the change of Chairman or General Director (Director) of the insurance company, or the change of General Director (Director) of the overseas branch shall be deemed approved.

Section 3

ORGANIZATION AND MANAGEMENT OF INSURANCE COMPANIES,

OVERSEAS BRANCHES

Article 22. Management personnel of insurance enterprises and foreign branches

1. The management personnel of insurance enterprises and foreign branches specified in this Circular include: Chairman of the Board of Directors (Chairman of the Members' Council, Company Chairman); General Director (Director); Deputy General Director (Deputy Director); Board of Directors members (Members' Council); Head of the Supervisory Board; supervisor (in cases where the enterprise does not establish a Supervisory Board); Head of internal audit department; Chief Accountant; Branch Manager, Representative Office Director (for insurance enterprises); heads of business units; actuary (for life insurance enterprises); reserve actuary and solvency margin actuary (for non-life insurance enterprises, health insurance enterprises, foreign branches).

2. Appointment of management positions of insurance enterprises and foreign branches shall be carried out as follows:

a) For the positions of Chairman of the Board of Directors (Chairman of the Members' Council, Company Chairman); General Director (Director); actuary (for life insurance enterprises), reserve actuary and solvency margin actuary (for non-life insurance enterprises, health insurance enterprises, foreign branches): Insurance enterprises and foreign branches shall appoint after obtaining approval from the Ministry of Finance in accordance with the provisions of the law.

b) Other positions other than those specified in point a, Clause 2 of this Article: Insurance enterprises and foreign branches may independently appoint. Within thirty (30) days from the date of formal appointment, the enterprise or branch must report to the Ministry of Finance in writing along with documents proving the qualifications and experience of the person appointed meet the conditions and standards stipulated by law.

Article 23. Common criteria for management personnel

1. Not belonging to the categories prohibited from managing enterprises under the provisions of Clause 2, Article 13 of the Enterprise Law.

2. Not being a person who has been criminally prosecuted, sentenced to imprisonment but not yet had their criminal record expunged or is currently being criminally prosecuted, sentenced to imprisonment or deprived of their professional practice rights by a court according to the provisions of the law.

3. Not having been a legal representative of an insurance enterprise that went bankrupt (except in cases of bankruptcy due to force majeure), a foreign branch that lost its ability to pay, or a manager of an insurance enterprise or foreign branch whose operating license was revoked due to violations in insurance business operations.

4. Having full capacity for civil acts.

5. In the three (03) consecutive years prior to the date of appointment as management personnel:

a) Not having been administratively punished in the field of insurance business with the form of being ordered to resign from a management position already approved by the Ministry of Finance or being suspended from a position already appointed by the insurance enterprise or foreign branch;

b) Not having been dismissed for disciplinary reasons due to violations of internal procedures on exploitation, appraisal, compensation, internal control, financial management and investment, reinsurance program management in insurance enterprises, reinsurance enterprises, foreign branches or procedures for brokerage business, internal control, professional ethics rules in insurance brokerage enterprises;

c) At the time of appointment as management personnel of an insurance enterprise or foreign branch, not directly involved in a case that has been initiated by a competent authority according to the provisions of the law.

Article 24. Standards for the Chairman of the Board of Directors (Chairman of the Member Council, Company Chairman)

The Chairman of the Board of Directors (Chairman of the Member Council, Company Chairman) must meet the conditions stipulated in Clause 1, Article 13 of Decree No. 45/2007/NĐ-CP and the following guidelines:

1. General standards prescribed in Article 23 of this Circular.

2. Hold a bachelor's degree or higher.

3. Have at least five (05) years of direct work experience in the insurance, finance, banking sector or have at least three (03) years of management experience at a company operating in the insurance, finance, banking sector.

Article 25. Standards for members of the Board of Directors, Member Council, Head of Supervisory Board, Supervisor (in cases where a Supervisory Board is not established)

1. General standards prescribed in Article 23 of this Circular.

2. Hold a bachelor's degree or higher.

3. Have at least three (03) years of direct work experience in the insurance, finance, banking sector or have at least two (02) years of management experience from department level (or equivalent) at the headquarters of a company operating in the insurance, finance, banking sector.

The Board of Directors and Supervisory Board (for insurance joint-stock companies) must ensure the number of resident members in Vietnam as prescribed by the Enterprise Law and the Company’s Charter and Operating Regulations.

Article 26. Standards for the General Director (Director) or Legal Representative

The General Director (Director) or Legal Representative must meet the conditions stipulated in Clause 1, Article 13 of Decree No. 45/2007/NĐ-CP and the following guidelines:

1. General standards prescribed in Article 23 of this Circular.

2. Hold a bachelor's degree or higher.

3. Hold a qualification or certificate in insurance training issued by legitimate domestic and foreign training institutions.

4. Have at least five (05) years of work experience in the insurance, finance, banking sector, including at least three (03) years in the position of General Director (Director) of a foreign branch or a department head or business unit head at the headquarters or Branch Director of an insurance company.

5. Reside in Vietnam during the term of office.

Article 27. Standards for Deputy General Director (Deputy Director), Chief Accountant, Branch Director, Representative Office Manager

1. General standards prescribed in Article 23 of this Circular.

2. Hold a bachelor's degree or higher.

3. Hold a qualification or certificate in insurance training issued by legitimate domestic and foreign training institutions.

4. Have at least three (03) years of work experience in the insurance, finance, banking sector or in the specialized field to be assumed.

5. For the Chief Accountant, in addition to meeting the standards set out in Clauses 1, 2, and 3 of this Article, must also meet the conditions and standards for Chief Accountants prescribed in accounting laws and have at least three (03) years of experience in accounting or auditing in the insurance sector.

6. Reside in Vietnam during their term of office.

Article 28. Standards for Heads of Business Units

The heads of business units: product research and development, exploitation, assessment, compensation, reinsurance, investment, and internal audit and control must meet the following conditions:

1. General standards prescribed in Article 23 of this Circular.

2. Hold a bachelor's degree or higher.

3. Hold a qualification or certificate in insurance training issued by legitimate domestic and foreign training institutions. For the head of the reinsurance or investment unit, must hold a qualification or certificate in reinsurance or investment training.

4. Have at least three (03) years of work experience in the sector to be managed.

5. Reside in Vietnam during the term of office.

Article 29. Principles of Assignment of Positions

1. Members of the Board of Directors and members of the Board of Members of insurance companies shall not concurrently serve as members of the Board of Directors or members of the Board of Members of other enterprises operating in the same field (non-life insurance, life insurance, reinsurance, or insurance brokerage).

2. General Directors (Directors) and Deputy General Directors (Deputy Directors) of insurance companies and foreign branches shall not concurrently work for other insurance companies or foreign branches operating in the same field in Vietnam; General Directors (Directors) of insurance companies and foreign branches shall not be members of the Board of Directors or members of the Board of Members of other insurance companies operating in the same field in Vietnam.

3. General Directors (Directors) and Deputy General Directors (Deputy Directors) of insurance companies may concurrently hold the position of head of a maximum of one (01) branch or representative office or business unit of the insurance company. General Directors (Directors) and Deputy General Directors (Deputy Directors) of foreign branches may concurrently hold the position of head of a maximum of one (01) business unit of that branch.

Article 30. Duties of the Appointed Actuary of Life Insurance Companies

1. Life insurance companies must employ an appointed actuary to perform the following tasks:

a) Establish rules, terms, and calculate premiums for insurance products, annually assess the difference between premium assumptions and actual implementation of each product.

b) Set up insurance business reserves in accordance with the provisions of the law.

c) Carry out fund separation and annual surplus distribution of the policyholder fund on a fair and reasonable basis and in compliance with the law. At the end of the fiscal year, the appointed actuary prepares a written report on the results of the insurance business operations, including a separate report on fund separation and profit distribution, proposing the profit share for each policyholder for the competent authority of the enterprise to decide.

d) Evaluate the payment capacity of life insurance companies and report to the Ministry of Finance on the 15th day of each month.

đ) Report periodically every quarter and annually in writing to the Board of Directors (Board of Members, Company Chairman) on the current financial situation and future financial forecasts of life insurance companies.

e) Promptly report in writing to the General Director (Director), Board of Directors (Board of Members, Company Chairman) about any unusual issues that could adversely affect the financial situation of life insurance companies and propose remedial measures. In serious cases that may affect the payment capacity of life insurance companies, the appointed actuary must directly report to the Ministry of Finance.

g) Evaluate reinsurance programs and reinsurance contracts before submitting them to the Management Board, Board of Directors (Board of Members, Company Chairman for approval).

h) Other tasks to ensure financial safety for life insurance companies.

2. Annually, within the latest period of ninety (90) days from the end of the fiscal year, the appointed actuary reports to the Ministry of Finance on matters related to the duties of the appointed actuary as stipulated in Clause 1 of this Article according to the form attached at Appendix 10 issued together with this Circular.

Article 31. Standards for the Appointed Actuary of Life Insurance Enterprises

1. Having been trained and having at least ten (10) years of work experience in actuarial calculations in the life insurance field and having worked in this field for at least one (01) year since becoming a Fellow member of one of the internationally recognized actuarial associations such as: The Institute of Actuaries of the United Kingdom, The Faculty of Actuaries in Scotland, The Society of Actuaries in the United States, The Institute of Actuaries of Australia, The Canadian Institute of Actuaries, or The Institute of Actuaries that is a formal member of the International Actuarial Association; or having at least five (05) years of work experience in actuarial calculations in the life insurance field since becoming a Fellow member of one of the aforementioned associations.

2. Not violating ethical rules of the actuarial profession; not being criminally prosecuted for offenses related to their professional activities.

3. Being an employee of a life insurance enterprise.

4. Residing in Vietnam during the term of office.

Article 32. Procedures for Appointment, Change, and Termination of the Status of the Appointed Actuary of Life Insurance Enterprises

1. Appointment of the Appointed Actuary

a) The Board of Directors (Board of Members, Chairman of the Company) of the life insurance enterprise or the General Director (Director) (in cases where the enterprise does not have a Board of Directors, Board of Members, or Chairman of the Company) shall be responsible for appointing the Appointed Actuary to carry out tasks as stipulated in Article 30 of this Circular. Prior to appointing the Appointed Actuary, the life insurance enterprise must submit one (01) set of notification documents to the Ministry of Finance and must obtain written approval from the Ministry of Finance.

b) Notification documents for the appointment of the Appointed Actuary include the following:

- A notification letter on the appointment of the Appointed Actuary signed by the Chairman of the Board of Directors (Board of Members, Chairman of the Company) or the General Director (Director) (in cases where the enterprise does not have a Board of Directors, Board of Members, or Chairman of the Company);

- Academic certificates, diplomas (certified copies) proving the qualifications, level of expertise, and evidence of work experience in actuarial calculations in the life insurance field of the person proposed for appointment as the Appointed Actuary;

- Certificate of membership status in a recognized actuarial association (certified copy) as stipulated in Clause 1 of Article 31 of this Circular;

- A principle contract signed between the person proposed for appointment as the Appointed Actuary and the life insurance enterprise regarding the fact that the person proposed for appointment will become an employee of the enterprise after obtaining approval from the Ministry of Finance (certified copy);

- A confirmation letter from the international actuarial association where the Appointed Actuary is a member as stipulated in Clause 1 of Article 31 of this Circular stating that the person proposed for appointment as the Appointed Actuary of the life insurance enterprise has not violated the ethical rules of the actuarial profession up to the time of proposed appointment (original);

- Criminal record of the person proposed for appointment as the Appointed Actuary (original).

2. Changing the Appointed Actuary:

a) In cases of changing the Appointed Actuary, the life insurance enterprise must submit one (01) set of notification documents for change to the Ministry of Finance and obtain approval from the Ministry of Finance.

b) Notification documents for changing the Appointed Actuary include the following:

- A notification letter on the removal of the position of the Appointed Actuary who has been approved by the Ministry of Finance. The notification letter of the life insurance enterprise must be signed by the Chairman or the General Director (Director) (in cases where the enterprise does not have a Board of Directors, Board of Members, or Chairman of the Company);

- Other documents as prescribed in point b of Clause 1 of this Article.

3. Terminating the Legal Status of the Appointed Actuary

a) The Appointed Actuary will automatically terminate their legal status in the following cases:

- Losing the status of a member of a recognized actuarial association;

- The life insurance enterprise requests the termination of the legal status of the Appointed Actuary.

b) The life insurance enterprise must notify the Ministry of Finance in writing when terminating the legal status of the Appointed Actuary.

4. Within eleven (11) days from the date of receiving complete valid documents as prescribed in point b of Clause 1 or point b of Clause 2 of this Article, the Ministry of Finance shall issue a document approving or rejecting the appointment or change of the Appointed Actuary of the life insurance enterprise. In case of rejection, the Ministry of Finance must clearly state the reasons. If the deadline is exceeded without a response from the Ministry of Finance, the appointment or change of the Appointed Actuary of the life insurance enterprise is automatically approved.

Article 33. Tasks of the actuarial specialist for business risk reserves and solvency capacity of non-life insurance companies, health insurance specialized companies, and foreign branches.

1. Non-life insurance companies, health insurance specialized companies, and foreign branches must use the actuarial specialist for business risk reserves and solvency capacity to perform the following tasks:

a) Establish rules, terms, and premium rates for insurance products, annually assess the difference between premium assumptions and actual implementation of each product;

b) Set up business risk reserves in accordance with the provisions of the law;

c) Evaluate the situation of claims payments of non-life insurance companies, health insurance specialized companies, and foreign branches;

d) Calculate the solvency capacity of non-life insurance companies, health insurance specialized companies, and foreign branches on a quarterly basis and confirm it in the solvency report sent to the Ministry of Finance as prescribed by law;

đ) Evaluate the reinsurance program and reinsurance contracts before submitting them to the Board of Directors, Management Board (Board of Members, Company Chairman) for approval;

e) At the end of the fiscal year, the actuarial specialist for business risk reserves and solvency capacity shall prepare a report evaluating the results of investment activities of non-life insurance companies, health insurance specialized companies, and foreign branches, including emerging risks and recommendations regarding investment assets, investment periods corresponding to the investment assets with the commitments made under insurance contracts.

2. Within two (02) years from the date this Circular takes effect, non-life insurance companies, health insurance specialized companies, and foreign branches must use the actuarial specialist for business risk reserves and solvency capacity to perform the tasks specified in Clause 1 of this Article.

Article 34. Standards for the actuarial specialist for business risk reserves and solvency capacity of non-life insurance companies, health insurance specialized companies, and foreign branches

1. Hold a bachelor's degree or higher.

2. Have at least five (05) years of work experience in the insurance field.

3. Hold an insurance qualification certificate issued by recognized domestic or international training institutions.

4. Not have been administratively punished in the insurance business for three (03) consecutive years prior to the expected appointment date.

5. Reside in Vietnam during the term of office.

Article 35. Registration of the actuarial specialist for business risk reserves and solvency capacity of non-life insurance companies, health insurance specialized companies, and foreign branches

1. Non-life insurance companies, health insurance specialized companies, and foreign branches must submit to the Ministry of Finance one (01) set of registration dossier for the actuarial specialist for business risk reserves and solvency capacity of the company or branch. The registration dossier includes the following documents:

a) A registration application for the actuarial specialist for business risk reserves and solvency capacity signed by the Chairman or General Director (Director) of the non-life insurance company, health insurance specialized company, or foreign branch;

b) Academic certificates, certificates (certified copies), and curriculum vitae of the person proposed to be appointed as the actuarial specialist for business risk reserves and solvency capacity of the company or branch.

2. The Ministry of Finance shall review the registration dossier for the actuarial specialist for business risk reserves and solvency capacity of non-life insurance companies, health insurance specialized companies, and foreign branches. In case of necessity, the Ministry of Finance may request the person proposed to be appointed as the actuarial specialist for business risk reserves and solvency capacity to explain their professional capabilities to meet the tasks prescribed in Clause 1 of Article 33 of this Circular.

3. Within eleven (11) days from the date of receiving a complete and valid dossier as stipulated in Clause 1 of this Article, the Ministry of Finance must respond in writing to approve or disapprove. In case of disapproval, the Ministry of Finance must specify the reasons. If the deadline is exceeded without a written response, the registration proposal for the actuarial specialist for business risk reserves and solvency capacity of non-life insurance companies, health insurance specialized companies, and foreign branches shall be deemed approved by default.

Article 36. Internal Inspection and Control

Insurance enterprises and foreign branches shall implement internal inspection and control in accordance with Article 15 of Decree No. 45/2007/NĐ-CP and the following guidelines:

1. Insurance enterprises and foreign branches must establish and issue business procedures in accordance with Clause 1 of Article 15 of Decree No. 45/2007/NĐ-CP and organize internal inspection and control.

2. The business procedures of insurance enterprises and foreign branches are documents stipulating the implementation of activities, functions, tasks, responsibilities, and authorities of each staff member at each department and the coordination mechanism among staff members and departments within the insurance enterprise or foreign branch. Business procedures must meet the following requirements to serve internal inspection and control:

a) Clear and transparent delegation of authority regarding the duties and authorities of individuals and departments within the insurance enterprise or foreign branch;

b) Specific determination of responsibility for each individual and department in executing each transaction.

3. Internal inspection and control activities must be independent from management activities, business operations, and ensure timely assessment and detection of all risks that may adversely affect the efficiency and operational objectives of the insurance enterprise or foreign branch, and promptly report to the competent authority of the insurance enterprise or foreign branch to take appropriate measures.

4. Individuals performing internal inspection and control work must have a bachelor's degree or higher and at least three (03) years of experience working in the financial, banking, or insurance sector.

5. Requirements for the internal inspection and control process:

The internal inspection and control process must be defined by the competent authority in the Charter of Organization and Operation (for insurance enterprises) or the Regulation of Organization and Operation (for foreign branches) issued in writing and must meet the following requirements:

a) Allow cross-checking between individuals and departments participating in the same business procedure;

b) Insurance enterprises and foreign branches must notify the internal inspection and control process to all employees of the enterprise so that employees recognize its importance and participate effectively in internal inspection and control activities;

c) Managers of departments and units, and related individuals must regularly review and assess the effectiveness and efficiency of the internal inspection and control system; any deficiencies in this system must be reported promptly to the direct management level; significant deficiencies that could cause losses or risk must be immediately reported to the General Director (Director), Chairman of the Board of Management (Chairman of the Board of Members, Company Chairman), Supervisory Board;

d) Heads of departments of insurance enterprises and foreign branches must report and evaluate the results of internal inspection and control in their respective departments or within the scope of their assigned tasks; propose remedial measures for any issues or shortcomings (if any) to the direct management leadership on a regular basis or as required by the direct management leadership.

Section 4

 INSURANCE EXPLOITATION

Article 37. General Principles in Insurance Business and Operations

1. Insurance enterprises and foreign branches shall conduct insurance business and operations in accordance with the following principles:

a) Honesty, transparency, and clarity to prevent customers from misunderstanding products and services provided by insurance enterprises and foreign branches.

b) Employees of insurance enterprises and foreign branches must have sufficient professional competence and moral integrity. Direct sales personnel introducing, offering insurance, and arranging insurance contract signings must hold at least an insurance agent certificate or training certification for the insurance businesses being conducted according to established regulations. Employees directly involved in reinsurance arrangements, claims assessment, and insurance payment review must possess training certificates for these activities issued by legally established and operating insurance training institutions.

c) Prior to entering into an insurance contract, it is necessary to thoroughly understand essential customer information, consider the financial capability and professional expertise of the enterprise, ensure the maintenance of financial resources, payment capacity, and risk management systems; and guarantee non-discrimination in insurance conditions and premium rates among insured objects with the same level of risk.

d) Product and service promotional materials of insurance enterprises and foreign branches must be clear, understandable, and not contain any information that could lead to misunderstandings, nor contravene the rules and terms of the insurance product that the insurance enterprise or foreign branch is authorized to provide.

đ) Illustrative sales materials for insurance products (for life insurance and health insurance products) provided directly to customers or through authorized insurance agents and insurance brokers in Vietnam must comply with the following principles:

- Illustrative sales materials must be approved by actuaries (for life insurance companies), reserve calculation specialists and solvency margin analysts (for non-life insurance companies, specialized health insurance companies, and foreign branches) regarding the assumptions used for calculations before being used to provide to customers. The illustrative sales materials need to be clear, complete, and accurate to assist customers in making appropriate choices.

- For products with return values, life insurance companies must present in the illustrative sales materials the conditions for receiving return values and the benefits, along with specific amounts that customers will receive when obtaining return values, but must clearly state whether these benefits are guaranteed or non-guaranteed.

- Insurance enterprises and foreign branches are responsible for the accuracy and updating of product and service promotional materials, illustrative sales materials, and other sales materials throughout their usage period.

- Illustrative sales materials must use language suitable for the target customer group.

e) If the insurance contract does not specify otherwise, when issuing an insurance application form, insurance enterprises and foreign branches must notify customers in writing of the following information:

- The duration or period of premium payments (if applicable);

- The name of the individual or unit under the insurance enterprise or foreign branch, and address for customers to contact for complaints, inquiries, and disputes related to the conclusion, performance, and termination of the insurance contract;

- The obligation of the customer to inform the insurance enterprise or foreign branch of any changes in the address of the insured party;

- Annually, life insurance companies must notify policyholders about the status of their contracts (for life insurance products);

g) Insurance enterprises and foreign branches have the responsibility to analyze customer needs to advise customers on suitable insurance products and insurance amounts. The analysis of needs and advice to customers must be done in writing (for life insurance products).

h) Insurance enterprises and foreign branches must clearly explain and request specific information from the insured party. The insured party has the responsibility to provide all relevant information about the insured object to the insurance enterprise or foreign branch.

i) When concluding an insurance contract, insurance enterprises and foreign branches must provide comprehensive information related to the insurance contract and explain the insurance conditions and terms to the insured party. Information provided by insurance enterprises and foreign branches when concluding an insurance contract constitutes part of the insurance contract.

k) Life insurance companies must notify customers:

- The conclusion of supplementary insurance contracts accompanying main insurance contracts is not a mandatory condition for maintaining the validity of the main insurance contract;

- A life insurance contract with return values becomes effective upon issuance and payment of premiums for twenty-four (24) months or more, or may become effective earlier as agreed in the insurance contract (for periodic premium payment contracts) and immediately effective (for single premium payment contracts);

- Insurance enterprises have the right to deduct outstanding debts before paying return values to the insured party.

Article 38. Prohibited acts in insurance exploitation

1. It is strictly prohibited for organizations and individuals to intervene unlawfully in the right to choose insurance businesses, insurance brokerage businesses, and foreign branches of the insured party.

2. No organization or individual may use their influence to request, prevent, or compel subordinate units or related persons to participate in insurance at any insurance business or foreign branch in any form.

3. It is strictly prohibited for insurance businesses and foreign branches to take advantage of the reputation, influence, and directives of any organization or individual in any form to provide insurance services, thereby affecting the rights and legitimate interests of the insured party.

Article 39. Approval of life insurance products and health insurance products

1. Life insurance enterprises must submit to the Ministry of Finance one (01) set of application documents for approval of proposed life insurance products before implementing them. Insurance businesses and foreign branches must comply with the rules, terms, and premium rates of the insurance products that have been approved by the Ministry of Finance before implementing health insurance products.

2. In cases where life insurance enterprises sell life insurance directly to the insured party without paying commissions to agents or brokers, and insurance businesses and foreign branches sell health insurance directly to the insured party without paying commissions to agents or brokers, these businesses may reduce premiums for the insured party by a maximum amount not exceeding the commission rate stipulated in this Circular. Insurance businesses and foreign branches are responsible for establishing a fair reduction process for customers. The Board of Directors (Board of Management, Company Chairman) of insurance businesses and the General Director (Director) of foreign branches are responsible for approving the reduction process and rate applicable to the insured party and notifying the Ministry of Finance in writing before implementation.

3. Application documents for approval of life insurance and health insurance products include the following:

a) A document requesting the Ministry of Finance to approve the product, committing that the insurance business or foreign branch will be responsible for the content and legality of the insurance rules and terms;

b) Rules, terms, and premium rates of the proposed insurance product ensuring compliance with Clause 4, Article 20 of Decree No. 45/2007/NĐ-CP. It is encouraged for insurance businesses and foreign branches to use model insurance rules and terms developed by the Vietnam Insurance Association;

c) Formulas, methods, and technical basis explanations used to calculate premiums and reserve provisions for the proposed insurance product.

For life insurance products with profit-sharing, life insurance enterprises must clearly specify in the premium calculation basis of the proposed insurance product the principles, methods, and profit-sharing ratios committed to be paid to customers.

d) Related documents including: insurance application forms, product and service introduction materials of insurance businesses and foreign branches, sales illustration materials, and claim forms that customers fill out and sign when purchasing insurance. These documents are part of the insurance contract.

Application documents for approval of life insurance and health insurance products must bear the signature of the legal representative of the insurance business or foreign branch and confirmation from an actuarial expert (for life insurance enterprises) and a reserve provision and solvency calculation expert (for non-life insurance enterprises, health insurance specialist enterprises, and foreign branches).

4. Content of product approval review

a) Checking the validity of the application documents for product approval and the compliance of insurance rules and terms with current laws. For products based on model insurance rules and terms, the Ministry of Finance only checks the validity of the application documents for product approval;

b) Reviewing the economic and technical feasibility of the insurance product based on the confirmation of an actuarial expert (for life insurance enterprises) and a reserve provision and solvency calculation expert (for non-life insurance enterprises, health insurance specialist enterprises, and foreign branches);

c) Non-life insurance enterprises and foreign branches exploiting bundled insurance products that include health insurance must comply with the provisions of this Article regarding the approval of health insurance products.

5. Time limit for approval of life insurance and health insurance products

Within thirty (30) days from the date of receiving complete valid application documents as stipulated in Clause 3 of this Article, the Ministry of Finance shall issue a document approving or rejecting the approval. In case of rejection, the Ministry of Finance must clearly state the reasons.

6. Non-life insurance enterprises are not required to go through the product approval procedure for health insurance products that were implemented before the effective date of this Circular. In cases of modifying or supplementing these products, non-life insurance enterprises must follow the procedures for requesting product approval as stipulated in Clauses 3 and 4 of this Article.

Article 40. Implementation of Non-life Insurance Products

Non-life insurance enterprises and foreign branches shall implement non-life insurance products in accordance with the provisions of Clause 3 and Clause 4, Article 20 of Decree No. 45/2007/ND-CP, Clause 4, Article 26 of Decree No. 123/2011/ND-CP, and the following guidelines:

1. The premium for original insurance contracts must not be lower than the reinsurance premium of those contracts.

2. In cases where the rules, terms, and rates of the insurance product do not ensure financial safety according to the regulations applicable to non-life insurance enterprises and foreign branches and affect the interests of the policyholders, the Ministry of Finance will require non-life insurance enterprises and foreign branches to stop implementing such products until they are adjusted appropriately.

3. Based on the requirements of the Ministry of Finance as stipulated in Clause 2 of this Article, non-life insurance enterprises and foreign branches must adjust the rules, terms, and rates of the insurance product and report to the Ministry of Finance for approval before implementation. The reporting dossier includes the following documents:

a) A report document on the implementation of adjustments according to the requirements of the Ministry of Finance, signed by the legal representative of the non-life insurance enterprise or foreign branch;

b) The rules, terms, and rates of the insurance product after adjustment;

c) Documentation explaining the technical basis for calculating the insurance premium of the adjusted insurance product, signed by the risk reserve calculation specialist and solvency assessment officer of the non-life insurance enterprise or foreign branch.

Within fifteen (15) days from the date of receipt of complete and valid documents, the Ministry of Finance will issue a document approving or rejecting the adjustment. If approved, the non-life insurance enterprise or foreign branch will implement the insurance product according to the rules, terms, and rates that have been approved by the Ministry of Finance. If rejected, the Ministry of Finance must clearly state the reasons.

4. Within the first fifteen (15) days of each month, non-life insurance enterprises and foreign branches must report to the Ministry of Finance new products implemented in the preceding month (if any) using the form attached as Appendix 8 to this Circular.

Article 41. Insurance Agent Commissions

1. Insurance agent commissions are expenses directly paid by insurance operating enterprises and foreign branches to insurance agents after the agents provide services to the enterprises or branches.

2. Insurance operating enterprises and foreign branches may independently use insurance agent commissions to pay agents for performing one or more of the following activities:

a) Introducing and selling insurance;

b) Arranging the conclusion of insurance contracts;

c) Collecting insurance premiums;

d) Arranging claims settlement and insurance payments when insured events occur;

đ) Performing other activities related to the execution of insurance contracts.

3. The maximum percentage of insurance agent commissions that insurance operating enterprises and foreign branches are permitted to pay to agents for each insurance contract shall be carried out as follows (except for the cases specified in Point 3.5 of this Clause):

3.1. Maximum commission for non-life insurance contracts:

3.2. Maximum commission for life insurance contracts:

a) For individual life insurance business:

- For each separate life insurance business: Life insurance commission is applied to main insurance products according to the table below:

- For combined separate life insurance businesses: Life insurance commission is calculated based on the total commission of the separate life insurance businesses mentioned above.

b) For group life insurance business: The maximum commission rate is fifty percent of the corresponding rates applied to individual life insurance businesses of the same type.

3.3. Maximum commission for health insurance contracts is twenty percent.

3.4. Insurance agent commissions for comprehensive insurance contracts are calculated as the total of the commissions for each risk covered in the comprehensive insurance contract.

3.5. For insurance products implemented under pilot programs decided by the Prime Minister and other types of insurance businesses outside those specified in Points 3.1, 3.2, and 3.3 of Clause 3 of this Article, insurance operating enterprises and foreign branches shall follow specific guidelines issued by the Ministry of Finance.

4. Insurance operating enterprises and foreign branches are not allowed to pay insurance agent commissions in cases where the enterprises or branches provide insurance services through tendering procedures as stipulated in Article 24 of Decree No. 123/2011/ND-CP.

5. Insurance enterprises and foreign branches shall base on current regulations regarding insurance agent commissions, their specific conditions and characteristics to establish rules for paying insurance agent commissions that are uniformly and publicly applied within the insurance enterprise and foreign branch.

Article 42. Prevention and Mitigation of Losses

1. Insurance enterprises and foreign branches may allocate up to 2% of the premiums collected in the fiscal year for measures to prevent and mitigate losses.

2. The contents of expenditures for implementing prevention and mitigation measures are stipulated in Clause 2, Article 25 of Decree No. 45/2007/NĐ-CP.

Section 5

REINSURANCE ACTIVITIES

Article 43. Management of Reinsurance Programs

1. Approval of reinsurance programs:

a) To ensure safety and efficiency in reinsurance business operations, the Board of Directors (Board of Members, Company Chairman), General Director (Director) of insurance enterprises, reinsurance enterprises, and General Director (Director) of foreign branches shall be responsible for approving reinsurance programs that are appropriate to the financial capacity, scale of business operations of the enterprise and branch, and current laws; reviewing, evaluating, and adjusting reinsurance programs periodically annually or when market conditions change.

b) A reinsurance program includes the following main contents:

- Determining the risk acceptance capability of insurance enterprises, reinsurance enterprises, and foreign branches;

- Determining appropriate retention levels corresponding to accepted insurance risks, limits on retention levels per unit of risk, and maximum protection from reinsurers;

- Determining the most suitable types and methods of reinsurance for managing accepted risks;

- Methods, standards, and procedures for selecting reinsurers, including ways to assess the level of risk and financial stability of reinsurers;

- List of expected reinsurers, noting diversification and ranking of reinsurers;

- Method of using collateral from reinsurers, if applicable;

- Managing accumulated risks in certain sectors, geographic regions, and specific product types;

- Ways to control the reinsurance program, including reporting and internal control systems.

2. Implementation of reinsurance programs:

Based on approved reinsurance programs, the General Director (Director) of insurance enterprises, reinsurance enterprises, and foreign branches shall be responsible for issuing internal procedures and guidelines for reinsurance business operations, specifically including:

a) Underwriting process, specifying types of insurance products underwritten; insurance rules, terms, and total liability per type of insurance product;

b) Determining automatic coverage limits under fixed reinsurance contracts for each type of insurance;

c) Establishing standards for temporary reinsurance contracts;

d) Comparing the rules and terms of the original insurance contract with those of the reinsurance contract to ensure each risk is insured (for insurance enterprises and foreign branches).

3. Insurance enterprises, reinsurance enterprises, and foreign branches shall regularly update lists of reinsurers, along with information on their risk levels, capabilities, and readiness to pay compensation corresponding to assumed reinsurance liabilities; requesting collateral corresponding to the risk level and credit rating of each reinsurer.

Article 44. Retention Level

1. Insurance enterprises, reinsurance enterprises, and foreign branches must calculate the retention level for each type of insurance and according to each type of risk; the retention level on one risk and on one insurance event.

2. When calculating the retention level, insurance enterprises, reinsurance enterprises, and foreign branches must consider the following factors:

a) Legal provisions regarding solvency;

b) Exploitation capacity;

c) Financial capability;

d) The willingness of insurance enterprises, reinsurance enterprises, and foreign branches to accept risks;

đ) Arrangements for protecting large risks and catastrophic risks;

e) Balancing business operation results;

g) Components of the insurance contract portfolio;

h) Trends in domestic and international reinsurance markets.

3. Insurance enterprises and foreign branches are only permitted to retain a maximum liability level on each risk or on each individual loss not exceeding 5% of their equity. Reinsurance enterprises are only permitted to retain a maximum liability level on each risk or on each individual loss not exceeding 10% of their equity.

4. Insurance enterprises, reinsurance enterprises, and foreign branches shall not accept reinsurance for the very risks they have ceded.

Article 45. Ceding Reinsurance

1. Insurance enterprises, reinsurance enterprises, and foreign branches may transfer part of the responsibility they have accepted for insurance to one or more other insurance enterprises, reinsurance enterprises, or foreign branches but shall not cede all the responsibility accepted under one insurance contract to another insurance enterprise, reinsurance enterprise, or foreign branch.

2. For limited reinsurance (finite reinsurance), before signing a reinsurance contract, insurance enterprises, reinsurance enterprises, and foreign branches must submit a document signed by a legal representative informing the Ministry of Finance of the main contents of the reinsurance contract, the purpose of signing the contract, and the commitment to comply with legal regulations on insurance operations and accounting systems applicable to the enterprise.

3. Ceding reinsurance shall not discriminate between insurance enterprises, reinsurance enterprises, and foreign branches operating in Vietnam and foreign insurance companies.

Article 46. Conditions for Foreign Reinsurance Accepting Enterprises

1. Foreign reinsurance accepting enterprises must be legally operating and fully meet the requirements for solvency as stipulated by the laws of the country where the enterprise's headquarters is located.

2. Leading reinsurance accepting enterprises and those accepting reinsurance from 10% of the total liability of each reinsurance contract must have a minimum rating of "BBB+" according to Standard & Poor’s or Fitch, "B++" according to A.M.Best, "Ba1" according to Moody’s, or equivalent ratings from other rating organizations with experience and functions in rating at the most recent fiscal year compared to the time of concluding the reinsurance contract.

3. In cases of reinsuring a parent company abroad or companies within the same group without credit ratings as specified above, insurance enterprises, reinsurance enterprises, and foreign branches must submit to the Ministry of Finance a document from the foreign insurance regulatory authority where the reinsured company's headquarters is located confirming that the foreign reinsured company ensures solvency in the most recent fiscal year of reinsuring.

Chapter 6

INSURANCE AGENTS

Article 47. Insurance Agency Activities

1. Organizations and individuals engaging in insurance agency activities must meet the conditions stipulated in Article 86 of the Law on Insurance Business, Clause 10 of Article 1 of the Law Amending and Supplementing Certain Provisions of the Law on Insurance Business, and must comply with the principles of insurance agency operations as prescribed in Article 28 of Decree No. 45/2007/ND-CP.

2. Insurance companies and foreign branches shall exercise their rights and obligations in insurance agency activities as provided for in Article 29 of Decree No. 45/2007/ND-CP.

3. Insurance agents shall exercise their rights and obligations as prescribed in Article 30 of Decree No. 45/2007/ND-CP.

4. Insurance agents shall not engage in the following acts:

a) Providing false information or advertising about the content and scope of activities of insurance companies, foreign branches, conditions and terms of insurance that harm the legitimate rights and interests of the insured party.

b) Obstructing the insured party from providing information related to the insurance contract or inciting the insured party or the beneficiary not to disclose details related to the insurance contract.

c) Competing for customers through forms such as obstructing, enticing, bribing, or threatening employees or customers of insurance companies, foreign branches, insurance agents, or other insurance brokerage firms.

d) Promoting customers through illegal means such as promising to reduce insurance premiums, refund insurance premiums, or other benefits that insurance companies, foreign branches do not provide to customers.

đ) Inciting the insured party to terminate existing insurance contracts to purchase new insurance contracts.

Article 48. Training of Insurance Agents

1. Insurance agent training program:

1.1. Basic training program:

a) The content of the basic training program includes:

- General knowledge about insurance (principles of insurance, types of insurance business);

- Responsibilities of agents, professional ethics;

- Laws on insurance business;

- Rights and obligations of insurance companies, foreign branches, and insurance agents in insurance agency activities;

b) The minimum duration of basic training is twenty-four (24) hours, conducted in a concentrated manner.

1.2. Product training program:

a) The content of the product training program includes:

- Sales skills;

- Practical work as an insurance agent;

- Insurance products that the agent intends to implement.

b) The minimum duration of initial product training is twenty-four (24) hours, conducted in a concentrated manner.

1.3. Insurance companies, foreign branches must update the contents specified in sub-item a of point 1.1 and sub-item a of point 1.2 of Clause 1 of this Article for insurance agents according to the guidelines of the Ministry of Finance.

2. Training institutions for insurance agents

2.1. Training institutions for insurance agents include:

a) Vietnam Insurance Association: implements the basic training program. In cases where it wishes to implement the product training program of a specific insurance company or foreign branch, it must cooperate with that insurance company or foreign branch to carry out the program;

b) Insurance companies, foreign branches: implement the product training program of their own insurance company or foreign branch and cooperate with the Vietnam Insurance Association to implement the basic training program;

c) Other organizations established legally in Vietnam: implement basic training programs on insurance.

2.2. Conditions for training institutions for insurance agents:

To be eligible to train insurance agents, the Vietnam Insurance Association, insurance companies, foreign branches, and other training organizations must meet the following conditions:

a) Having a training program that meets the requirements set forth in sub-item a of point 1.1 and sub-item a of point 1.2 of Clause 1 of this Article (corresponding to the planned training content).

b) Having a teaching staff meeting the following standards:

- Holding a degree from a college level or higher;

- Having at least two (02) years of experience working or teaching in the field of insurance.

c) Having technical facilities that meet the needs of training;

d) Being approved in writing by the Ministry of Finance before conducting training.

2.3. Procedures for requesting approval to conduct training:

Before conducting insurance agent training, the training institution must submit to the Ministry of Finance one (01) set of documents including the following materials:

a) A registration form for becoming a training institution for insurance agents as prescribed in Appendix 11 issued together with this Circular;

b) A certified copy of the license or establishment decision of the organization registering as a training institution for insurance agents;

c) An insurance agent training program as prescribed in sub-item a of point 1.1 and sub-item a of point 1.2 of Clause 1 of this Article (depending on the planned training content);

d) A list of instructors, accompanied by brief resumes, diplomas, and certificates of the instructors;

đ) Training procedures and quality assessment procedures;

e) Evidence of technical facilities that meet the needs of training.

Within thirty (30) days from the date of receipt of complete files, the Ministry of Finance will issue a written approval or rejection of the training institution's request. If rejected, the reasons must be clearly stated.

2.4. In case of changes to the training program content and instructor for insurance agents, thirty (30) days prior to implementing a new training course, the training institution must send a letter to the Ministry of Finance requesting approval for the change along with documentation explaining these changes. Within eleven (11) days from the date of receipt of complete files, the Ministry of Finance will issue a written approval or rejection. If rejected, the reasons must be clearly stated.

Article 49. Examination and Issuance of Insurance Agency Certificates

1. Training institutions shall cooperate with the Ministry of Finance to organize examinations and issue insurance agency certificates.

2. The insurance agency certificate shall be issued according to the model prescribed in Appendix 12 attached hereto.

3. For pilot insurance programs pursuant to the Prime Minister's decision and special insurance products, the examination and issuance of insurance agency certificates shall be carried out in accordance with the guidelines of the Ministry of Finance.

4. As for insurance agency certificates that have been issued in accordance with the provisions of the law before this Circular takes effect, the insurance agent may continue to use such certificates to exploit insurance products they have been trained on. In case the agent wishes to exploit new insurance products, they must be trained on those products (including cases where the agent enters into a contract with a new insurance business enterprise).

Article 50. Reporting System

1. Annually, no later than January 30 of the following year, the training institution for insurance agents shall report to the Ministry of Finance on the number of training courses organized, the number of trainees trained, and the number of certificates issued during the year according to the model prescribed in Appendix 13 attached hereto.

2. Insurance enterprises and foreign branches shall be responsible for implementing quarterly reporting as follows:

a) No later than the first day of the month following the quarter, report to the Ministry of Finance (in electronic file form and paper form) the list of active insurance agents according to the model prescribed in Appendix 14 attached hereto;

b) No later than the first day of the month following the quarter, notify the Ministry of Finance and the Vietnam Insurance Association of the list of insurance agents who violated the rules of practice or legal regulations and were terminated by the insurance enterprise or foreign branch according to the model prescribed in Appendix 15 attached hereto, so that the Vietnam Insurance Association can inform other insurance enterprises and foreign branches.

Section 7

INSURANCE BROKERAGE COMPANIES

Article 51. Insurance Broker Activities

1. An insurance brokerage enterprise must agree in writing with the insured party when providing original insurance brokerage services. The agreement must clearly state the contents of insurance brokerage activities as stipulated in Article 90 of the Law on Insurance Business and the obligations and responsibilities of each party.

Reinsurance brokerage activities shall be conducted in accordance with international practices and current legal regulations.

2. An insurance brokerage enterprise may be authorized by an insurance enterprise or foreign branch to collect insurance premiums, pay indemnities, or pay insurance benefits. Such authorization must comply with the following principles:

a) The authorization must be documented in writing, specifying the duration and scope of the authorized activities, as well as the rights and responsibilities of each party.

b) In the case where an insurance brokerage enterprise is authorized by an insurance enterprise or foreign branch to collect insurance premiums:

- The obligation of the insured party to pay the insurance premium is fulfilled when the insured party has paid the insurance premium according to the insurance contract to the insurance brokerage enterprise.

- Upon receipt of the insurance premium from the insured party, the insurance brokerage enterprise has the responsibility to remit the said amount to the insurance enterprise or foreign branch within the agreed timeframe between the insurance enterprise or foreign branch and the insurance brokerage enterprise, but not exceeding five (05) working days from the date of receipt of the insurance premium.

c) In the case where an insurance brokerage enterprise is authorized by an insurance enterprise or foreign branch to pay insurance benefits or indemnities:

- The insurance enterprise or foreign branch remains liable to the insured party or beneficiary for the insurance benefit that the insurance enterprise or foreign branch is obligated to pay to the insured party or beneficiary.

- The insurance brokerage enterprise has the responsibility to pay the insurance benefit to the insured party or beneficiary within no more than five (05) working days from the date of receiving the insurance benefit from the insurance enterprise or foreign branch.

d) An insurance brokerage enterprise may only carry out the authorized activities specified in Clause 2 of this Article if such activities relate to insurance contracts arranged by the insurance brokerage enterprise. The insurance brokerage enterprise shall not receive any payment for carrying out activities authorized by the insurance enterprise or foreign branch.

3. Employees of an insurance brokerage enterprise directly performing insurance brokerage activities as stipulated in Article 90 of the Law on Insurance Business must hold an insurance training certificate or insurance brokerage training certificate issued by insurance training institutions established and operating legally.

Article 52. Cooperation in Insurance Brokerage Activities

1. An insurance brokerage enterprise is permitted to cooperate with another insurance brokerage enterprise established and operating legally in Vietnam to carry out insurance brokerage activities.

2. The cooperation stipulated in Clause 1 of this Article must be agreed upon in writing, specifying clearly the responsibilities, rights, and the ratio for dividing the insurance brokerage commission between each party.

Article 53. Prohibited Conducts in Insurance Brokerage Activities

1. Obstructing the insured party or the policyholder from providing information related to the insurance contract or inciting the insured party or the policyholder not to declare details related to the insurance contract.

2. Promoting customers through illegal promises of benefits to incite customers to conclude insurance contracts.

3. Inciting the insured party to cancel existing insurance contracts to purchase new ones.

4. Advising customers to purchase insurance from an insurance company or foreign branch under less competitive conditions than those offered by other insurance companies or foreign branches in order to obtain higher insurance brokerage commissions.

5. Cooperating with individuals or organizations (except for insurance brokerage enterprises as prescribed in Clause 1 of Article 52 of this Circular) to perform one or more stages of the insurance brokerage process.

Article 54. Insurance Brokerage Commission

1. The basic rate of the insurance brokerage commission is determined based on the agreement between the insurance company, foreign branch, and the insurance brokerage enterprise in compliance with Vietnamese law. In all cases, the maximum rate of the insurance brokerage commission for each service arranged through the insurance brokerage enterprise shall not exceed fifteen percent (15%) of the actual premium received by the insurance company, foreign branch.

2. The rate of the reinsurance brokerage commission is implemented according to the agreement of the parties ensuring compliance with international practices.

Section 8

REPRESENTATIVE OFFICE OF AN INSURANCE ENTERPRISE

FOREIGN ENTITIES IN VIETNAM

Article 55. Issuance of License for Establishing a Representative Office

1. A foreign insurance enterprise wishing to establish a representative office in Vietnam shall submit to the Ministry of Finance one (01) set of application documents for the issuance of a license for establishing a representative office in accordance with Article 110 of the Law on Insurance Business. Documents bearing signatures, titles, and seals from abroad in the application for the license must be legalized by consular certification. Vietnamese translations and translations from foreign languages into Vietnamese must be certified in accordance with the law. The investor shall be responsible for the accuracy of the application documents for the license.

2. The application for establishing a representative office in Vietnam must bear the signature of the Chairman of the Board of Directors or a person authorized in accordance with the charter of the foreign insurance enterprise. The form of the application for establishing a representative office in Vietnam is specified in Appendix 16 issued together with this Circular.

3. Within sixty (60) days from the date of receipt of the complete application documents for the issuance of a license for establishing a representative office, the Ministry of Finance shall issue a license for the establishment of a representative office of a foreign insurance enterprise in Vietnam in accordance with the form specified in Appendix 17 issued together with this Circular. In case of refusal, the Ministry of Finance shall provide a written response stating the reasons.

Article 56. Report on the Activities of Representative Office

The representative office of foreign insurance enterprises in Vietnam must submit to the Ministry of Finance periodic reports on its activities in accordance with Article 38 of Decree No. 45/2012/NĐ-CP and the following specific guidelines:

1. The representative office of foreign insurance enterprises in Vietnam must report its activities on a six-monthly and annual basis to the Ministry of Finance. The mid-year report must be submitted before July 30, and the annual report must be submitted before March 1 of the following year.

2. The contents of the report as stipulated in Clause 1 of this Article include:

a) The organizational structure of the representative office, personnel, number of Vietnamese and foreign nationals working at the representative office;

b) Main activities carried out by the representative office during the reporting period, including:

- Market access;

- Relations between the representative office and other insurance enterprises, foreign branches, and Vietnamese economic organizations;

- Advisory and training work;

- Other activities as prescribed by law.

c) Future activity directions.

3. In addition to the aforementioned periodic reports, upon necessity, the Ministry of Finance may request the representative office to provide reports, supply documents, and explain issues related to its operations.

Article 57. Amendment and Supplement to the Permit for Establishing a Representative Office

1. When there is a change in any of the following items in the permit for establishing a representative office, the foreign insurance enterprise must submit one (01) set of application documents for amending and supplementing the permit:

a) Name, nationality, address of the foreign insurance enterprise;

b) Name of the representative office;

d) Content of the representative office's activities;

2. Application documents for amending and supplementing the permit:

a) A written request to amend the Permit for Establishing a Representative Office according to the model prescribed in Appendix 18 issued together with this Circular;

b) Approval document from the competent authority as stipulated in the Charter on Organization and Operation of the Foreign Insurance Enterprise regarding the changes specified in Clause 1 of this Article.

3. Within eleven (11) days from the date of receipt of complete and valid application documents as stipulated in Clause 2 of this Article, the Ministry of Finance shall issue the Amended Permit according to the model prescribed in Appendix 20 issued together with this Circular. In case of refusal, the Ministry of Finance shall issue a written response stating the reasons.

Article 58. Changes to be Notified to the Ministry of Finance

1. Foreign insurance enterprises must notify the Ministry of Finance when changing the Head of the Representative Office in Vietnam.

2. The representative office must notify the Ministry of Finance when changing the location of its headquarters and personnel working at the representative office.

3. Notifications of changes as stipulated in Clauses 1 and 2 of this Article must be made in writing according to the model prescribed in Appendix 19 issued together with this Circular within thirty (30) days from the date of change, accompanied by supporting documents proving the change, including: curriculum vitae, certified copies of personal identification documents as prescribed by law (for cases of changing the Head of the Representative Office), evidence proving the right to use the location of the representative office (for cases of changing the location of the representative office).

Article 59. Extension of Representative Office Operations

1. A foreign insurance enterprise wishing to extend the operations of its representative office must comply with the following provisions:

a) The representative office of the foreign insurance enterprise in Vietnam has not been administratively fined VND 200 million or more for violations in the insurance business sector within twelve (12) months from the date of submitting the application for extension;

b) The foreign insurance enterprise is legally operating and stable at the time of applying for the extension of the representative office's operations.

2. The period for extending the operations of the representative office shall not exceed five (05) years.

3. At least thirty (30) days before the expiry date of the License for Establishing a Representative Office, a foreign insurance enterprise wishing to extend the operations of the representative office must submit to the Ministry of Finance one (01) set of application documents including the following:

a) A request for extension of the representative office's operations in accordance with the form prescribed in Appendix 16 issued together with this Circular;

b) A certified copy of the License for Establishment and Operation of the foreign insurance enterprise;

c) A certified copy of the audited financial statements of the foreign insurance enterprise for the three (03) consecutive years prior to the year of submission of the extension application;

d) Curriculum vitae and certified copies of valid personal identification documents of the person intended to hold the position of Head of the Representative Office (in cases where there is a change in the Head of the Representative Office);

4. Within twenty-one (21) days from the date of receiving the complete application for extension, the Ministry of Finance will issue a document approving or refusing approval. In case of refusal, the reasons must be explained.

Article 60. Termination of Representative Office Operations

1. The Representative Office shall terminate its operations in the following cases:

a) At the request of the foreign insurance enterprise;

b) When the foreign insurance enterprise ceases operations;

c) When the License for Establishing a Representative Office is revoked according to Clause 3, Article 37 of Decree No. 45/2007/NĐ-CP.

2. Procedures for Terminating Representative Office Operations

To terminate the operations of a representative office, a foreign insurance enterprise must submit to the Ministry of Finance one (01) set of application documents in Vietnamese including the following:

a) A request for termination of the representative office's operations in accordance with the form prescribed in Appendix 16 issued together with this Circular;

b) Evidence proving that all obligations towards employees and other organizations and individuals in Vietnam have been fulfilled;

c) Original License for Establishing a Representative Office;

d) Any Licenses and decisions related to the operations of the representative office.

Within eleven (11) days from the date of receiving complete and valid applications, the Ministry of Finance will issue a document approving the termination of the representative office's operations and notify relevant authorities.

Section 9

PROCEDURES AND DOCUMENTS FOR TRANSFER OF INSURANCE CONTRACTS

Article 61. Transfer of Insurance Contracts

1. During the course of operations, an insurance business enterprise or a foreign branch may transfer insurance contracts of one or several insurance businesses (hereinafter referred to as transfer) to another permitted insurance business enterprise or foreign branch in Vietnam in accordance with Section 3, Chapter III of the Insurance Business Law.

2. The transfer must ensure the principle of succession of rights and obligations and must not cause damage to the interests of the policyholder after the transfer is completed.

Article 62. Transfer Procedures

1. For insurance enterprises and foreign branches transferring operations (hereinafter referred to as the transferring enterprise), the transferring enterprise must submit to the Ministry of Finance one (01) set of transfer application documents including the following documents:

1.1. A request for transfer stating clearly the reasons for the transfer;

1.2. A transfer plan, which includes the following:

a) The name and address of the insurance enterprise or foreign branch receiving the transfer (hereinafter referred to as the receiving enterprise);

b) Type of insurance business and quantity of insurance contracts being transferred;

c) Method of transferring funds, reserves, and claims related to the transferred contracts;

d) Expected time frame for implementing the transfer;

đ) Detailed explanation by the receiving company regarding its financial capacity after the transfer;

e) Transfer agreement between the transferring company and the receiving company, including the following main contents:

- The object of the transfer;

- The expected time frame for completing the transfer;

- The rights and obligations of the parties involved in the transfer;

- The method of resolving disputes.

1.3. The commitment of the receiving enterprise to ensure the rights of policyholders under transferred insurance contracts after the transfer takes effect.

2. Within fifteen (15) days from the date the insurance contract transfer request is approved by the Ministry of Finance, the transferring enterprise shall be responsible for:

a) Publishing a notice of the transfer on two central newspapers for five (05) consecutive issues with the main contents as follows:

- The name and address of the transferring enterprise and the receiving enterprise;

- The type of insurance business and the number of insurance contracts being transferred;

- The expected time frame for completing the transfer;

- The address for handling complaints and inquiries of the insurance policyholders related to the transfer.

b) Sending a notification along with a summary of the transfer plan to each policyholder immediately after the Ministry of Finance approves the transfer request document. The notification sent to the policyholder must clearly state the period during which the policyholder is permitted to cancel the insurance contract if they disagree with the transfer plan and the effective date of the transfer plan.

3. Policyholders may cancel the insurance contract within fifteen (15) days from the date of receipt of the transfer notice according to the postmark. In case the policyholder cancels the insurance contract, the transferring enterprise must refund to the policyholder the corresponding premium received for the remaining term of the insurance contract after deducting reasonable related costs for non-life insurance; or the premium paid by the policyholder after deducting reasonable related costs for life insurance.

4. From the date the Ministry of Finance approves the transfer request document, the transferring enterprise shall not continue to enter into new insurance contracts for the business operations that have been transferred.

5. Within sixty (60) days from the date the Ministry of Finance approves the transfer plan, the transferring enterprise shall transfer to the receiving enterprise:

a) All existing insurance contracts within the transfer plan that have been approved by the Ministry of Finance;

b) Complaint files that have not yet been resolved relating to the business operations that have been transferred;

c) All assets, funds, and reserves related to the transferred insurance contracts and complaint files that have not yet been resolved relating to the business operations that have been transferred.

Article 63. Approval of Transfer Application Documents

1. Within thirty (30) days from the date all transfer application documents are received, the Ministry of Finance shall issue a document approving, rejecting approval, or requesting amendments and supplements to the transfer application documents. In case the Ministry of Finance requests amendments and supplements to the documents, within sixty (60) days from the date of receipt of the amendment and supplement request, the transferring enterprise must complete the documents and resubmit them to the Ministry of Finance. Beyond this deadline, the Ministry of Finance has the right to reject the transfer application documents. In case of rejection of the transfer application documents, the Ministry of Finance shall explain the reasons in writing.

2. After approving the transfer application documents, the Ministry of Finance shall issue a revised license according to the form at Appendix 7 issued together with this Circular to the transferring enterprise in accordance with the insurance businesses that the transferring enterprise is still permitted to conduct.

Article 64. Responsibilities of the Receiving Enterprise

1. The receiving enterprise shall be responsible for coordinating with the transferring enterprise in establishing the transfer plan, determining the value of assets related to funds and business reserves of the transferred insurance contracts, and agreeing on the effective date of the transfer plan.

2. From the date of receipt of the transfer, the receiving enterprise shall be responsible for performing the obligations of the transferred insurance contracts in accordance with the terms agreed between the transferring enterprise and the insured party, including the responsibility to resolve complaints that have occurred but have not yet been reported.

The receiving enterprise has the right to accept assets related to funds and business reserves of the transferred insurance contracts and to use such assets to fulfill the obligations under the transferred insurance contracts.

Chapter III

IMPLEMENTATION

Article 65. Effectiveness of the Circular

1. This Circular takes effect from October 1, 2012.

2. This Circular replaces Circular No. 155/2007/TT-BTC dated December 20, 2007 of the Ministry of Finance guiding the implementation 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 Point 1 of Circular No. 86/2009/TT-BTC dated April 28, 2009 of the Ministry of Finance.

3. Trong quá trình thực hiện, nếu có khó khăn, vướng mắc đề nghị phản ánh kịp thời về Bộ Tài chính để xem xét, giải quyết./.