Circular No. 155/2007/TT-BTC guiding the implementation of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing certain provisions of the Insurance Business Law.

CIRCULAR

Guidelines for implementing Decree No. 45/2007/NĐ-CP dated March 27, 2007

of the Government detailing the implementation of certain provisions

of the Law on Insurance Business

___________________

 

 

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

Pursuant to Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance.

The Ministry of Finance hereby provides detailed guidance as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. These Circulars guide the implementation of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business, applicable to insurance business activities, reinsurance, insurance brokerage, and insurance agency operations conducted by insurance companies, insurance brokers, and insurance agents; and the establishment and operation of representative offices of foreign insurance companies and foreign insurance brokers in Vietnam.

2. Insurance companies, insurance brokers, insurance agents, and related organizations and individuals shall be responsible for complying with the provisions of these Circulars and relevant laws; ensuring fair cooperation and competition and preventing monopolistic practices in insurance business activities.

3. The Vietnam Insurance Association shall strengthen its self-regulatory role, promote cooperation and fair competition among insurance companies and insurance brokers for the rights and legitimate interests of organizations and individuals participating in insurance.

4. The Ministry of Finance shall create conditions for insurance companies and insurance brokers to operate on an equal footing; protect the rights and legitimate interests of organizations and individuals participating in insurance and take strict measures against violations of laws on insurance business.

II. LICENSE FOR ESTABLISHMENT AND OPERATION

1. Licensing procedures

1.1. The Ministry of Finance shall issue a license for establishment and operation (hereinafter referred to as "license") to insurance companies and insurance brokers when they meet the conditions specified in Article 6 and have a licensing application file in accordance with Article 7 of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business (hereinafter referred to as Decree No. 45/2007/NĐ-CP). The application for a license shall be in the form prescribed in Appendix 1 attached hereto.

1.2. After receiving a complete and valid file in accordance with the regulations, within sixty days, the Ministry of Finance shall issue a license or issue a document refusing to issue a license to insurance companies and insurance brokers. The license shall be issued in the form prescribed in Appendix 2 attached hereto.

2. Content of the review of the licensing application file

2.1. Legal status verification

2.1.1. For the investor being a legal entity:

a) A notarized copy of the decision on establishment, license for establishment and operation, and business registration certificate of the organization. For applications for licenses to establish foreign-invested enterprises, there must be a notarized copy of the decision on establishment, license for establishment and operation, and business registration certificate of the foreign insurance company or foreign insurance broker where the headquarters is located (the notarized copy of the business registration certificate must be certified by the authority where the organization has registered, not more than three months before the date of submission of the application for a license).

b) The charter of the organization participating in capital contribution to establish an insurance company or insurance broker;

c) A power of attorney for the representative of the investor (if any). For applications for licenses to establish wholly foreign-owned enterprises, there must be a power of attorney for the person expected to be appointed as General Director (Director) in Vietnam. The person authorized shall submit a notarized copy of their legal personal identification documents in accordance with Article 18 of Decree No. 88/2006/NĐ-CP dated August 29, 2006 of the Government on business registration;

d) A document from the competent authority approving the enterprise's participation in insurance business or insurance brokerage business (if any). For applications for licenses to establish foreign-invested enterprises, there must be a document from the competent authority of the country where the enterprise's headquarters is located allowing the foreign insurance company or foreign insurance broker to establish a foreign-invested insurance company or foreign-invested insurance broker in Vietnam or evidence confirming this;

đ) A document from the competent authority of the country where the enterprise's headquarters is located certifying that the foreign investor is permitted to conduct the type of insurance business that the foreign investor intends to carry out in Vietnam for applications for licenses to establish foreign-invested enterprises;

e) A joint venture contract including the main contents prescribed by the Investment Law and guiding documents for applications for licenses to establish joint ventures;

g) Minutes of meetings of investors agreeing to establish an insurance company or insurance broker for applications for the establishment of joint ventures and stock corporations;

h) A document signed by shareholders (members) who are founders about delegating a representative of the investors to be responsible for:

- Organizing the completion and submission of the application for a license; signing the application for a license for an insurance company or insurance broker;

- Signing documents serving the completion of the application for a license for establishment and operation of an insurance company or insurance broker until the Ministry of Finance issues the license;

- Signing documents requesting approval of the positions of Chairman of the Board of Directors, Chairman of the Board of Members, Chairman of the Company (hereinafter referred to as "Chairman"), General Director (Director) of the insurance company or insurance broker before officially commencing operations;

- Open a blocked account at a commercial bank established and legally operating in Vietnam and notify the investors listed on the registered list to deposit funds into this account; collect bank confirmations regarding the amounts deposited by the investors.

- Convene and preside over the first shareholders' meeting or board of members.

i) A draft Corporate Charter in compliance with the provisions of the Enterprise Law 2005, Insurance Business Law, and implementing regulations. The draft Corporate Charter must be signed by the legal representatives of the founding shareholders or members, or by their authorized representatives.

2.1.2. For individual investors:

a) Certified copies of valid personal identification documents as stipulated in Article 18 of Decree No. 88/2006/NĐ-CP dated August 29, 2006, of the Government on business registration.

b) Criminal record according to the model prescribed in Circular No. 07/1999/TTLT-BTP-BCA dated February 8, 1999, of the Ministry of Justice and Ministry of Public Security on issuing criminal records for investors who are founding shareholders (or members).

2.2. Financial capability assessment

2.2.1. List of organizations and individuals participating in capital contribution to establish an insurance company or insurance brokerage company, specifying the founding shareholders or members; the amount of capital contribution; number and type of shares (for applications to establish a joint-stock company); method of capital contribution; corresponding deadlines.

2.2.2. Founding shareholders must collectively hold at least 50% of the initial charter capital when establishing an insurance company or insurance brokerage company within three years (for applications to establish a joint-stock company).

2.2.3. Official document from the competent authority of the country where the enterprise's headquarters is located certifying that foreign investors are in sound financial condition and meet all management requirements in their home country up to the end of the fiscal year immediately preceding the application for a license.

2.2.4. Capital contribution structure to establish an insurance company or insurance brokerage company in accordance with Decree No. 46/2007/NĐ-CP dated March 27, 2007, of the Government on financial systems for insurance companies and insurance brokerage companies (hereinafter referred to as Decree No. 46/2007/NĐ-CP) and implementing regulations.

2.2.5. Evidence proving the ability to fully pay the registered capital to establish an insurance company or insurance brokerage company by the investors:

a) Audited financial statements for the three consecutive years prior to the establishment of the insurance company or insurance brokerage company, certified by an independent auditing organization for organizations that are founding shareholders (members) or contributing more than 10% of the charter capital; financial statements for the three consecutive years prior to the establishment of the insurance company or insurance brokerage company for corporate investors who are not founding shareholders (members) or contributing less than 10% of the charter capital.

b) The capital contribution to establish an insurance company or insurance brokerage company must be legal sources; no borrowing or entrusted investment under any form shall be used to contribute capital to establish an insurance company or insurance brokerage company.

c) Bank confirmation of the paid-in charter capital of each organization or individual according to the list registered in the application for a license.

2.3. Assessment of the feasibility of the five-year business plan

2.3.1. General evaluation of the business plan of the insurance company or insurance brokerage company in the context of the market, including challenges and prospects.

2.3.2. Evaluation of the competitive capacity of the insurance company or insurance brokerage company expected to be established, demonstrating the advantages of the insurance company or insurance brokerage company entering the market.

2.3.3. Detailed analysis of the insurance products, target customers, and sales network planned to be implemented.

2.3.4. Strategy of the insurance company or insurance brokerage company for expanding its operational network.

2.3.5. Balance sheet, profit and loss statement, revenue, and compensation for each product line, financial investment plans from equity and reserve funds for insurance operations. Projected indicators must be based on reasonable assumptions.

2.3.6. Draft procedures for exploitation, appraisal, compensation, internal control, financial management and investment, reinsurance program management.

2.3.7. Method of setting up reserves for insurance operations in accordance with Decree No. 46/2007/NĐ-CP and implementing regulations.

2.3.8. Projected solvency margin in accordance with Decree No. 46/2007/NĐ-CP and implementing regulations; plan to supplement capital in case of non-compliance with legal requirements.

2.3.9. Information technology: Financial investment plan for information technology; ability to apply information technology, specifying the implementation time for investment in technology; type of technology to be applied; projected staff and their ability to apply information technology.

2.3.10. Conditions for implementing insurance operations for those operations requiring specific conditions for implementation.

2.3.11. Organizational structure, functions, staffing, and initial and ongoing training plans for the enterprise.

2.4. Assessment of the management capabilities of the executives of the insurance company or insurance brokerage company

2.4.1. List, brief resumes, criminal records, certified copies of certificates proving the qualifications and expertise of executive positions in the insurance company or insurance brokerage company in compliance with Clause 1 of Section IV of this Circular.

2.4.2. Commitment letters from individuals who will work and assume executive positions if the insurance company or insurance brokerage company is granted a license.

2.5. Assessment of the rules and terms of the insurance operations planned to be implemented

The rules, terms, and insurance premium schedules shall be established in accordance with Article 20 of Decree 45/2007/NĐ-CP.

In cases where applications for establishing insurance companies or insurance brokerage companies request permission to open additional branches outside their main offices, the assessment of such branches shall be carried out in accordance with Article 11 of Decree 45/2007/NĐ-CP and the guidance provided in this Circular.

3. Pre-operational procedures for insurance companies, insurance brokerage companies risk before officially commencing operations

3.1. Within twelve months from the date of issuance of the license, insurance companies and insurance brokerage companies must complete the following procedures to officially commence insurance business operations:

3.1.1. Pay the licensing fee to the State budget in accordance with the provisions of the law;

3.1.2. Deposit the required amount of security deposit in accordance with Clause 6 of Decree 46/2007/NĐ-CP at a commercial bank legally established and operating in Vietnam;

3.1.3. Hold an election to establish the Board of Directors, Chairperson, and General Director (Director) in accordance with the Articles of Association and relevant laws; complete the procedure to seek approval for the Chairperson and General Director (Director);

3.1.4. Stamp registration, tax code registration, and opening a transaction account at a bank in accordance with the provisions of the law;

3.1.5. Register the method of setting aside reserves for business activities in accordance with the law with the Ministry of Finance. For life insurance companies, related documents must be submitted to the Ministry of Finance for approval of the proposed insurance products and the position of actuary. These regulations do not apply to insurance brokerage companies;

3.1.6. Announce operations in accordance with Clause 1 of Article 9 of Decree 45/2007/NĐ-CP.

3.2. Insurance companies and insurance brokerage companies may only convert the capital deposited in the escrow account into the registered capital of the company after officially obtaining the license from the Ministry of Finance.

III. AMENDMENTS AND SUPPLEMENTS TO THE LICENSE

Insurance companies and insurance brokerage companies must obtain prior written approval from the Ministry of Finance when changing the contents stipulated in Article 69 of the Law on Insurance Business. The procedures for approving changes under Article 69 of the Law on Insurance Business shall be implemented as follows:

1. Changing the name of the enterprise

Insurance companies and insurance brokerage companies wishing to change their name shall submit the following documents to the Ministry of Finance:

1.1. A request for name change according to the form prescribed in Appendix 3 attached to this Circular;

1.2. An approval document from the competent authority in accordance with the Articles of Association of the enterprise regarding the name change.

2. Increasing or decreasing the registered capital of insurance companies and insurance brokerage companies

Insurance companies and insurance brokerage companies wishing to change their registered capital must submit the following documents to the Ministry of Finance:

2.1. A request for change in registered capital according to the form prescribed in Appendix 3 attached to this Circular;

2.2. An approval document from the competent authority in accordance with the Articles of Association of the enterprise regarding the change in registered capital;

2.3. The plan to increase the registered capital of insurance companies and insurance brokerage companies. The content of the plan to increase the registered capital must clearly specify:

2.3.1. The need for increased capital and its usage;

2.3.2. The business performance based on the new registered capital: projected pre-tax profit margin on equity after increasing capital, dividend rate of the most recent year after increasing capital; profit margins on capital and total assets; solvency of the insurance company. The forecasted indicators must be calculated based on reasonable assumptions with a basis;

2.3.3. The management capability and supervisory capacity of the enterprise in relation to the increased scale of capital and corresponding operational scale;

2.3.4. The feasibility of the capital increase plan: the total amount of additional registered capital planned, the method of raising capital.

In cases of increasing registered capital through public securities issuance, compliance with the laws on securities and the securities market is required. The Securities Commission shall issue a permit for public securities issuance based on the approval of the Ministry of Finance.

2.4. The plan to decrease the registered capital of insurance companies and insurance brokerage companies must demonstrate that the enterprise can fully settle all debts and other financial obligations after the reduction of capital. Decreasing the registered capital is not allowed for a limited liability company with one member.

3. Opening or ceasing operations of branches or representative offices

3.1. Insurance companies and insurance brokerage companies wishing to open branches or representative offices must meet the conditions stipulated in Article 11 of Decree 46/2007/NĐ-CP and the specific guidance below:

3.1.1. The actual paid-in registered capital must meet the conditions stipulated in Decree 46/2007/NĐ-CP and the implementing guidelines;

3.1.2. Not having been subject to administrative fines totaling more than 15 million dong for violations in the field of insurance business over the past three consecutive years up to the time of submitting the application to open a branch or representative office.

3.2. The application for opening a branch or representative office by insurance companies and insurance brokerage companies shall be carried out in accordance with Clause 2 of Article 11 of Decree 45/2007/NĐ-CP and the specific guidance below:

3.2.1. A request for opening a branch or representative office according to the form prescribed in Appendix 3 attached to this Circular;

3.2.2. An approval document from the competent authority in accordance with the Articles of Association of the enterprise regarding the opening of a branch or representative office;

3.2.3. Criminal record, certificates and diplomas proving the qualifications of the person intended to be appointed as head of the branch or representative office;

3.2.4. Regulations on the organization and operation of the branch or representative office including the following basic contents:

a) Specific provisions on the functions and responsibilities that the enterprise intends to delegate to the branch, including the function of representation by proxy, the responsibility of the head of the branch towards customers and the law;

b) Specific provisions on the content of representation by proxy of the representative office subordinate to the enterprise;

c) Specific provisions regarding the information system, reporting requirements, financial regime, accounting records for the operations of branches and representative offices, ensuring that the headquarters office can control various types of risks in the operations of its branches and representative offices.

d) Other provisions as required by the management and supervision of each insurance company or insurance brokerage firm.

3.2.5. Evidence of the right to use the location for the branch headquarters and representative office (rental or ownership).

3.3. Insurance companies and insurance brokerage firms' branches and representative offices must officially commence operations within six (06) months from the date such branches and representative offices are approved by the Ministry of Finance.

3.4. The application to terminate the operations of a branch or representative office of an insurance company or insurance brokerage firm shall be carried out as follows:

3.4.1. A request for termination of operations of the branch or representative office according to the model prescribed in Appendix 3 attached to this Circular;

3.4.2. Approval document from the competent authority as stipulated in the Articles of Association of the enterprise concerning the termination of operations of the branch or representative office;

3.4.3. Report on the operational status of the branch or representative office in the three most recent years in the case of terminating operations of the branch or representative office. In cases where the branch or representative office has not been operating for three years, report on the operational status since the commencement of operations;

3.4.4. Responsibilities, issues arising, and resolution plans when terminating operations of the branch or representative office.

3.5. The application to establish a branch or representative office of an insurance company or insurance brokerage firm abroad shall comply with the relevant laws on foreign investment.

4. Change of the location of the headquarters, branches, and representative offices of insurance companies and insurance brokerage firms

Insurance companies and insurance brokerage firms wishing to change the location of their headquarters, branches, or representative offices must submit the following documents to the Ministry of Finance:

4.1. A request for changing the location of the headquarters, branches, or representative offices of the enterprise according to the model prescribed in Appendix 3 attached to this Circular;

4.2. An approval document from the competent authority as stipulated in the Articles of Association of the enterprise concerning the change of the location of the headquarters, branches, or representative offices;

4.3. Evidence of the right to use the location for the branch headquarters and representative office (rental or ownership).

5. Change in the content, scope, and duration of operations

5.1. Insurance companies and insurance brokerage firms wishing to expand the content, scope, and duration of operations must meet the conditions specified in Article 12 of Decree 45/2007/ND-CP and the specific guidance below:

5.1.1. The actual charter capital must meet the conditions specified in Decree 46/2007/ND-CP and the implementing regulations for the expansion of the content and scope of operations of insurance companies;

5.1.2. Not being subject to administrative fines totaling more than 15 million dong for violations in the insurance business sector over a continuous period of three years up to the time of submitting the application to expand the content, scope, and duration of operations;

5.1.3. For the case of expanding the content and scope of operations, the insurance company must have at least three people expected to work in the newly established department. The head of the new department must meet the standards of managerial personnel as stipulated in Point 1.6 Clause 1 Section IV of this Circular;

5.2. The application to change the content, scope, and duration of operations of insurance companies and insurance brokerage firms shall be carried out in accordance with Article 12 of Decree 45/2007/ND-CP and the specific guidance below:

5.2.1. A request for expanding (or reducing) the content, scope, and duration of operations of the enterprise according to the model prescribed in Appendix 3 attached to this Circular;

5.2.2. An approval document from the competent authority as stipulated in the Articles of Association of the enterprise concerning the expansion (or reduction) of the content, scope, and duration of operations;

5.2.3. Certificates and diplomas proving the qualifications and capabilities of the head of the department expected to be established in the case of expanding the content and scope of operations.

6. Splitting, dividing, merging, consolidating, converting, transferring shares

The splitting, dividing, merging, consolidating, converting, and transferring of shares of insurance companies and insurance brokerage firms as stipulated in Article 16 of Decree 45/2007/ND-CP are specifically guided as follows:

6.1. Splitting, dividing, merging, consolidating, converting enterprises

6.1.1. The splitting, dividing, merging, consolidating, and converting of insurance companies and insurance brokerage firms shall be carried out in accordance with the Law on Enterprises 2005 and the Competition Law 2004.

6.1.2. Documents for splitting, dividing, merging, consolidating, and converting enterprises include:

a) A request for splitting, dividing, merging, consolidating, and converting enterprises according to the model prescribed in Appendix 4 attached to this Circular;

b) An approval document from the competent authority as stipulated in the Articles of Association of the enterprise concerning the splitting, dividing, merging, consolidating, and converting of enterprises;

c) Report on the plan for division and handling of valid contracts with customers, debts, obligations to the state, and commitments to employees when splitting, dividing, merging, consolidating, and converting enterprises;

d) List of shareholders, members, charter capital, and capital structure of the organization formed after splitting, dividing, merging, consolidating, and converting;

đ) Merger agreement in the case of merger and consolidation;

e) Opinion of a financial advisory organization or an auditing organization legally established and operating in Vietnam regarding the valuation and conversion ratio of shares or contributions in the case of merger and consolidation;

g) Legal opinion of a lawyer regarding the legal appropriateness of the contract and documents related to splitting, dividing, merging, consolidating, and converting.

h) Financial statements audited for the three consecutive years preceding the year of application for consolidation or merger of the organization merging with the insurance company or insurance brokerage company; In case the period from the end date of the most recent financial statement's fiscal year to the submission date of the application exceeds ninety (90) days, such entity must submit additional quarterly reports up to the latest quarter.

i) Curriculum vitae, lawful personal certifications as stipulated in Article 18 of Decree No. 88/2006/NĐ-CP dated August 29, 2006 of the Government on business registration of new members (individuals), copies of the Business Registration Certificate of new members (legal entities) holding at least ten percent (10%) of the charter capital.

k) Certificates and diplomas proving the qualifications of the proposed newly appointed managers and executives of the insurance company or insurance brokerage company after division, separation, consolidation, or merger.

6.1.3. A newly formed company following division, separation, consolidation, merger, or conversion may only be permitted to operate insurance business if it meets the conditions for conducting insurance business as prescribed in the Law on Insurance Business and guiding documents.

6.2. Transactions that change the contributed charter capital by ten percent (10%) or more of an insurance company or insurance brokerage company must be approved by the Ministry of Finance before implementation.

6.2.1. Transactions that change the contributed charter capital by ten percent (10%) or more of an insurance company or insurance brokerage company include:

a) Transactions for an individual to hold ten percent (10%) or more of the contributed charter capital, or for an organization to hold ten percent (10%) or more of the contributed charter capital of an insurance company or insurance brokerage company; or

b) Transactions for an individual to no longer hold ten percent (10%) or more of the contributed charter capital, or for an organization to no longer hold ten percent (10%) or more of the contributed charter capital of an insurance company or insurance brokerage company; or

c) Transfer of ownership of ten percent (10%) or more of the contributed charter capital of an insurance company or insurance brokerage company.

6.2.2. The application documents for implementing transactions that change the contributed charter capital by ten percent (10%) or more of an insurance company or insurance brokerage company include the following:

a) A request document for transferring shares according to the model specified in Appendix 5 attached to this Circular;

b) Approval document of the competent authority as stipulated in the Company Charter regarding the implementation of transactions that change the contributed charter capital by ten percent (10%) or more of the company;

c) Proof of financial capability of the transferee:

- For organizations: Audited financial statements for the three consecutive years preceding the year of application for transfer. In case the period from the end date of the most recent financial statement's fiscal year to the submission date of the application exceeds ninety (90) days, such entity must submit additional quarterly reports up to the latest quarter;

- For individuals: Bank confirmation of the expected deposit balance to be used for capital contribution;

d) Preliminary transfer agreement (if any);

đ) Curriculum vitae, lawful personal certifications as stipulated in Article 18 of Decree No. 88/2006/NĐ-CP dated August 29, 2006 of the Government on business registration of new capital contributors (for individuals), copies of the Business Registration Certificate of new capital contributors (for legal entities);

e) List of capital contributors (shareholders) and the post-transfer charter capital structure.

7. Change of Chairman, General Director (Director)

7.1. The change of Chairman, General Director (Director) must be approved by the Ministry of Finance.

7.2. Application documents for changing the Chairman, General Director (Director) include the following:

7.2.1. Request document for changing the Chairman, General Director (Director) according to the model specified in Appendix 3 attached to this Circular;

7.2.2. Approval document of the competent authority as stipulated in the Company Charter regarding the change of Chairman, General Director (Director);

7.2.3. Criminal record; lawful personal certifications as stipulated in Article 18 of Decree No. 88/2006/NĐ-CP dated August 29, 2006 of the Government on business registration; certificates and diplomas proving the qualifications and professional capabilities of the person replacing the Chairman, General Director (Director);

7.2.4. Commitment letter of the person proposed to be appointed as Chairman, General Director (Director) of the company to work for the company upon approval by the Ministry of Finance.

8. Time limit for resolving requests to amend and supplement licenses

Within thirty (30) days from the date the Ministry of Finance receives the complete application documents for amending and supplementing the license of the insurance company or insurance brokerage company as provided in points 1 to 7 above, the Ministry of Finance shall issue a written response approving or rejecting the company's application. In case of rejection, the reasons must be stated in writing. In case of approval, the Ministry of Finance shall issue an amended license to the company according to the model specified in Appendix 6 attached to this Circular or a written approval.

IV. ORGANIZATION AND MANAGEMENT OF INSURANCE COMPANIES AND INSURANCE BROKERAGE COMPANIES

1. Standards for Managers and Executives of Insurance Companies and Insurance Brokerage Companies

1.1. General criteria

1.1.1 Not belonging to the prohibited categories of managing a business as stipulated in Clause 2 of Article 13 of the Enterprise Law;

1.1.2. Not being a person who has been or is currently being pursued for criminal responsibility, sentenced to imprisonment, or deprived of their professional qualification by a court as prescribed by law;

1.1.3. Not having previously been a legal representative of a business that was declared bankrupt, except in cases of bankruptcy due to force majeure; or being a manager or executive of insurance companies or insurance brokerage companies whose operating licenses were revoked due to violations in insurance business operations;

1.1.4. Having full capacity for civil acts.

1.2. Standards for the Chairman

1.2.1. Common standards as stipulated in point 1.1 above;

1.2.2. Hold a bachelor's degree or higher; have at least five years of direct work experience in the insurance, finance, or banking sector, or have at least three years of management experience at a company with a registered capital equivalent to that of the insurance company or insurance brokerage company to be managed.

1.3. Standards for members of the Board of Directors and Members of the Board of Members

1.3.1. The general standards prescribed in point 1.1 above;

1.3.2. Hold a bachelor's degree or higher; have at least two years of management experience or at least three years of direct work experience in the insurance, finance, or banking sector.

1.4. Standards for the General Director (Director) or Legal Representative

1.4.1. The general standards prescribed in point 1.1 above;

1.4.2. Hold a bachelor's degree or higher; have at least five years of direct work experience in the insurance, finance, or banking sector and have held a position of at least head of a business department at the headquarters of an insurance company or insurance brokerage company for at least three years;

1.4.3. Reside in Vietnam during the term of office.

1.5. Standards for Deputy General Director (Deputy Director), Branch Manager, Head of Representative Office, Chief Accountant, Head of Supervisory Board:

1.5.1. The general standards prescribed in point 1.1 above;

1.5.2. Hold a bachelor's degree or higher; possess knowledge in the specialized field they will manage or have at least three years of direct work experience in the insurance, finance, or banking sector and the specialized field they will manage;

1.5.3. Reside in Vietnam during the term of office.

1.6. Standards for heads of business operation departments, claims, reinsurance, and investment:

1.6.1. Hold a bachelor's degree or higher;

1.6.2. Have at least three years of work experience in the intended field; hold a qualification or certificate in the intended field issued by recognized domestic or international training institutions.

1.7. Principles for assigning positions within insurance companies and insurance brokerage companies:

1.7.1. Members of the Board of Directors and Members of the Board of Members of insurance companies and insurance brokerage companies shall not concurrently serve as members of the Board of Directors or Members of the Board of Members of other insurance companies or insurance brokerage companies operating in the same field (reinsurance, non-life insurance, life insurance, or insurance brokerage), except in cases where they are subsidiaries.

1.7.2. General Directors (Directors) and Deputy General Directors (Deputy Directors) of insurance companies and insurance brokerage companies shall not concurrently work for other insurance companies or insurance brokerage companies operating in the same field; General Directors (Directors) of insurance companies and insurance brokerage companies shall not be members of the Board of Directors or Members of the Board of Members of other insurance companies or insurance brokerage companies operating in the same field, except in cases where they are subsidiaries.

2. Internal Audit and Control

Insurance companies and insurance brokerage companies shall conduct internal audit and control in accordance with Article 15 of Decree 45/2007/NĐ-CP and the following guidelines:

2.1. The internal audit and control department must be commensurate with the scale, scope, and specific nature of the company's operations; it shall be directly under the management of the General Director (Director) of the insurance company or insurance brokerage company.

2.2. The internal audit and control department is responsible for checking and supervising compliance with laws and regulations, operational procedures, and internal rules of insurance companies and insurance brokerage companies; assisting the General Director (Director) in conducting self-audits to compile, review, and evaluate the effectiveness and efficiency of the internal audit and control system to promptly identify, prevent, and recommend measures to address any deficiencies or violations in all business activities, thereby improving the internal audit and control system.

2.3. The internal control process must ensure the identification, measurement, and evaluation of all risks that may adversely affect the company's performance and objectives on a regular and continuous basis to promptly identify, prevent, and implement appropriate risk management measures.

2.4. Requirements for the internal audit and control process:

2.4.1. Clearly defined and transparent delegation of authority regarding the duties and powers of individuals and departments within the insurance company;

2.4.2. Cross-checking between individuals and departments involved in the same business procedure;

2.4.3. Assigning specific responsibilities to each individual and department for each transaction;

2.4.4. Insurance companies and insurance brokerage companies must ensure that all employees recognize the importance and effectively participate in internal audit and control activities;

2.4.5. Managers of business units, relevant individuals must regularly assess the effectiveness and efficiency of the internal audit and control system; any deficiencies in this system must be reported promptly to the immediate supervisor; significant deficiencies that could cause losses or pose a risk must be immediately reported to the General Director (Director), Board of Directors (Board of Members, Company Chairman), Supervisory Board;

2.4.6. Heads of departments of insurance companies report and evaluate the results of internal audit and control in their respective departments or within the scope of their assigned tasks; propose measures to address any deficiencies or issues (if any) to the immediate supervisor according to a regular schedule or as required by the immediate supervisor;

2.4.7. The internal audit and control process must clearly define disciplinary actions for any violations.

2.5. The business process of insurance companies and insurance brokerage companies is a document stipulating the implementation, functions, tasks, responsibilities, and authorities of each staff member within each department, and the mechanism for coordination among staff members and departments within the insurance company or insurance brokerage company.

3. Appointed Actuary

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

3.1.1. Establishing rules, terms, and calculating premiums for life insurance products;

3.1.2. Setting up reserve funds for life insurance contracts in accordance with the provisions of the law;

3.1.3. Carrying out the separation of funds and the distribution of surplus annually from the policyholder fund on the basis of fairness, reasonableness, and compliance with the law;

3.1.4. Regularly assessing the payment capacity of the insurance company monthly and reporting to the Ministry of Finance on the first day of each month;

3.1.5. Reporting in writing to the Board of Directors, Board of Members, and Chairman of the life insurance company on the current financial situation of the company and forecasting the future financial situation of the life insurance company on a quarterly and annual basis;

3.1.6. Promptly reporting in writing to the General Director (Director), Board of Directors, Board of Members, and Chairman about any unusual issues that may adversely affect the financial situation of the insurance company and proposing measures to address them. In serious cases that may affect the payment capacity of the insurance company, they must report directly to the Ministry of Finance;

3.1.7. Evaluating reinsurance programs and reinsurance contracts before submitting them to the Board of Management, Board of Directors, Board of Members, and Chairman for approval;

3.1.8. Other tasks to ensure financial safety for the insurance company.

3.2. Standards for the appointed actuary

3.2.1. The appointed actuary must meet the following standards:

a) Having been trained and having at least five years of experience in actuarial calculations in the field of life insurance and being 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 full member of the International Actuarial Association;

b) Having good moral character; not violating professional ethics in actuarial practice; not being criminally prosecuted for offenses related to their professional work;

c) Being an employee of the insurance company. In cases where the insurance company cannot recruit an appointed actuary, the company may temporarily hire an appointed actuary; the contract for hiring an appointed actuary must have a minimum term of one (01) year.

3.3. Approval procedures for the appointed actuary

3.3.1. The Board of Directors (Board of Members, Company Chairman) of the life insurance company or the General Director (Director) in cases where the company does not have a Board of Directors (Board of Members, Company Chairman) is responsible for appointing the appointed actuary to carry out the tasks specified in Article 3.1 above. The appointment of the appointed actuary must be approved in writing by the Ministry of Finance.

3.3.2. The application dossier for approving the appointed actuary includes the following documents:

a) A letter requesting the Ministry of Finance's approval of the appointed actuary signed by the Chairman of the Board of Directors (Board of Members, Company Chairman) or the General Director (Director) in cases where the company does not have a Board of Directors (Board of Members, Company Chairman);

b) Certificates, diplomas, and curriculum vitae proving the capabilities, qualifications, and professional experience of the person proposed to be appointed as the appointed actuary;

c) A certified copy of the certificate confirming membership status in a recognized actuarial association.

3.4. Procedures for approving changes to the appointed actuary:

3.4.1 In cases of changing the appointed actuary, the insurance company must submit to the Ministry of Finance an application dossier for approval of the change including the following documents:

a) A letter requesting the Ministry of Finance to relieve the appointed actuary who has been approved by the Ministry of Finance of his position and to approve a new appointed actuary. The company's request must be signed by the Chairman or the General Director (Director) in cases where the company does not have a Board of Directors (Board of Members, Company Chairman);

b) Certificates, diplomas, and curriculum vitae proving the capabilities, qualifications, and professional experience of the person proposed to be appointed as the new appointed actuary;

c) A certified copy of the certificate confirming membership status in a recognized actuarial association.

3.4.2. Within fifteen days from the date of receiving a complete and valid application dossier as specified above, the Ministry of Finance must respond in writing to approve or reject the application. In case of rejection, the Ministry of Finance must provide a written explanation of the reasons.

3.5. Termination of the status of the appointed actuary:

3.5.1. The appointed actuary will automatically terminate their legal status in the following cases:

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

b) The insurance company has a letter requesting a change in the appointed actuary, explaining the reasons clearly and obtaining approval from the Ministry of Finance.

3.5.2. Within fifteen days from the date of receiving a complete and valid application dossier as specified above, the Ministry of Finance must respond in writing to approve or reject the application. In case of rejection, the Ministry of Finance must provide a written explanation of the reasons.

V. EXPLOITATION OF INSURANCE

1. Insurance product reports

1.1. For insurance products under non-life insurance operations, insurance companies are entitled to independently establish and implement rules, terms, and premium schedules but must ensure:

1.1.1. Compliance with Clause 4 of Article 20 of Decree 45/2007/NĐ-CP;

1.1.2. The premium for contracts already concluded shall not be lower than the reinsurance premium of the same contract.

1.2. Within fifteen days at the beginning of each month, the insurance enterprise reports to the Ministry of Finance new products launched in the preceding month according to Form 7 attached to this Circular.

2. Approval of Insurance Products

2.1. Prior to launching life insurance, health insurance, and supplementary personal accident insurance products for life insurance, the insurance enterprise submits to the Ministry of Finance the following documents requesting approval of the product:

2.1.1. A document requesting the Ministry of Finance's approval of the product, wherein the insurance enterprise commits to being responsible for the content and legality of the insurance rules and terms;

2.1.2. The insurance rules, terms, and premium rates of the proposed insurance product;

2.1.3. The formulas, methods, and explanations of technical bases used to calculate premiums and business reserves of the proposed insurance product;

2.1.4. Related documents including application forms, product introduction materials, service materials of the insurance enterprise, sales illustration materials, and claim forms that customers fill out and sign when purchasing insurance. These documents are part of the insurance contract;

2.1.5. For life insurance products with profit-sharing, the insurance enterprise clearly specifies in the basis for calculating premiums of the proposed insurance product the principles, methods, and profit-sharing ratios that the enterprise commits to paying to customers.

2.2. The insurance rules, terms, and premium rates submitted by the insurance enterprise to the Ministry of Finance for approval must comply with the provisions of Clause 4, Article 20 of Decree 45/2007/NĐ-CP. The Ministry of Finance encourages insurance enterprises to unify model insurance rules and terms through the Vietnam Insurance Association.

2.3. The application for approval of life insurance products must be signed by the legal representative of the enterprise and confirmed by an actuarial expert.

2.4. Content of the examination and approval of insurance products

2.4.1. Checking the validity of the application for approval of the insurance product and the compliance of the 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 for approval of the insurance product;

2.4.2. Assessing the economic and technical feasibility of the insurance product based on the confirmation of an actuarial expert.

2.5. Within thirty days from the date of receiving complete valid applications, the Ministry of Finance issues a document approving or rejecting the approval. In case of rejection, the Ministry of Finance provides an explanation of the reasons.

3. Provisions on Non-Life Insurance Operations

3.1. The insurance enterprise conducts non-life insurance operations in accordance with the following regulations:

3.1.1. Truthfulness, transparency, and clarity, avoiding misleading customers about the products and services provided by the enterprise;

3.1.2. Insurance agents and brokers must have sufficient professional expertise, moral character, and adequate training to communicate with customers;

3.1.3. Before concluding an insurance contract, it is necessary to thoroughly understand essential customer information, consider the financial capacity and professional expertise of the enterprise, ensure the maintenance of financial resources, payment capability, and risk management systems; ensure no discrimination in insurance conditions and premium rates between insured objects with the same level of risk;

3.1.4. Transactions of insurance purchases and sales between the insurance enterprise and investors holding twenty percent or more of the charter capital of the same insurance enterprise must be conducted through bidding in accordance with the law on bidding or co-insurance with other insurance enterprises. This provision does not apply to health insurance and personal accident insurance and mandatory insurance types.

3.2. Prohibited Acts

3.2.1. Strictly prohibit organizations and individuals from illegally interfering with the right of the policyholder to choose an insurance enterprise or an insurance brokerage enterprise;

3.2.2. Management agencies and investors may not use their influence in any form to request, prevent, or compel subordinate units or related persons to participate in insurance at a specific insurance enterprise;

3.3.3 Strictly prohibit insurance enterprises from taking advantage of the reputation, influence, and directives of superior management agencies or investors to provide insurance services, thereby affecting the rights and legitimate interests of policyholders.

4. Provisions on Life Insurance Operations

4.1. Product and Service Introduction Materials of Insurance Enterprises

4.1.1. Product and service introduction materials of the enterprise must be clear, understandable, and free from any information that could lead to misunderstanding;

4.1.2. During sales illustrations, the insurance enterprise must clearly distinguish between guaranteed benefits and non-guaranteed benefits; inform customers that the total amount of non-guaranteed benefits received under different contracts may vary;

4.1.3. At least once a year, review the assumptions used in sales illustrations. If these assumptions no longer align with actual circumstances, the insurance enterprise must adjust the sales illustrations accordingly;

4.1.4. The insurance enterprise must ensure that product and service introduction materials do not contain information about benefits that contradict the insurance rules and terms approved by the Ministry of Finance.

4.2. Sales Illustration Materials

4.2.1. The insurance enterprise provides sales illustrations of insurance products directly to customers or through authorized insurance agents and insurance brokerage enterprises operating in Vietnam;

4.2.2. Sales illustration materials must be approved by the actuary of the insurance enterprise regarding the assumptions used for calculations before being provided to customers. Sales illustration materials need to be clear, comprehensive, and accurate to assist customers in making appropriate choices.

4.2.3. Insurance enterprises are responsible for the accuracy and updating of materials introducing their products and services, sales illustration materials, and other sales materials throughout the period of use.

4.2.4. Insurance enterprises must present in sales illustration materials the conditions for receiving return value and benefits, including specific amounts that customers will receive when receiving return value, but must clearly state whether these benefits are guaranteed or not guaranteed.

4.3. Providing information related to insurance contracts

If the insurance contract does not specify clearly, when issuing an insurance application form, insurance enterprises need to notify customers in writing the following information:

4.3.1. The method and frequency of paying insurance premiums;

4.3.2. The name of the individual or unit under the enterprise to contact in case customers need service or clarification regarding issues related to the contract;

4.3.3. The obligation of customers to inform the enterprise of any changes in the address of the insured party;

4.3.4. The address where customers can contact to have complaints, inquiries, and disputes related to the conclusion, performance, and termination of insurance contracts resolved;

4.3.5. The conclusion of supplementary insurance contracts accompanying main insurance contracts is not a mandatory condition to maintain the validity of the main insurance contract;

4.3.6. Annually, insurance enterprises notify policyholders about the status of their contracts.

4.4. Return value of life insurance contracts

4.4.1. Life insurance contracts have return value when they are effective and have paid premiums for at least 24 months for periodic payment contracts or may be sooner according to the agreement in the insurance contract;

4.4.2. Insurance enterprises have the right to deduct outstanding debts before paying the return value to the policyholder.

4.5. Concluding insurance contracts

4.5.1. Enterprises are responsible for analyzing customer needs to ensure advice on suitable insurance products and insurance amounts. The analysis of needs and advice to customers must be carried out in writing.

4.5.2. Insurance enterprises explain clearly and provide specific information requirements for policyholders. Policyholders are responsible for providing complete information related to the insured object to insurance enterprises.

4.5.3. When concluding insurance contracts, insurance enterprises are responsible for providing complete information related to the insurance contract, explaining the terms and conditions of insurance to policyholders. The information provided by insurance enterprises when concluding insurance contracts constitutes part of the insurance contract.

5. Publishing list of insurance products

Within thirty days from the end of each quarter, the Ministry of Finance shall publish the list of insurance products currently being offered on the market by each insurance enterprise. The publication of the list of insurance products is conducted publicly through mass media and sent to the Vietnam Insurance Association, insurance enterprises legally established and operating in Vietnam.

6. Insurance commission

6.1. Insurance commission is the direct payment made by insurance enterprises to insurance brokerage enterprises, insurance agents after these organizations bring services to insurance enterprises. Insurance enterprises are entitled to use insurance commissions to cover the following expenses:

6.1.1. Initial exploitation costs (researching, persuading, and introducing customers);

6.1.2. Premium collection costs;

6.1.3. Contract monitoring costs and persuading customers to maintain insurance contracts.

6.2. The maximum percentage of insurance commission that insurance enterprises are allowed to pay to insurance agents for each insurance contract is implemented according to the provisions in Appendix 8 and Appendix 9 attached to this Circular. Insurance commission for bundled insurance contracts is calculated as the total commission of each risk covered in the bundled insurance contract.

6.3. The rate of insurance brokerage commission is determined based on the agreement between insurance enterprises and insurance brokerage enterprises in accordance with Vietnamese law and international practices. Depending on the scope, level, and content of the provided insurance brokerage services, the maximum insurance brokerage commission payable is 15% of the actual premium collected.

6.4. Insurance enterprises base on current regulations on insurance commissions, specific conditions, and characteristics to establish a unified and publicized system for distributing insurance commissions within the insurance enterprise.

7. Prevention and limitation of losses

Insurance enterprises are allowed to spend up to 2% of the premiums collected in a fiscal year on measures to prevent and limit losses as stipulated in Clause 2 of Article 25 of Decree 45/2007/NĐ-CP.

VI. REINSURANCE ACTIVITIES

1. Managing Reinsurance Programs

1.1. Approving Reinsurance Programs

1.1.1. To ensure safety and efficiency in reinsurance business operations, the Board of Directors (Board of Members, Company Chairman) is responsible for approving reinsurance programs appropriate to the financial capacity, scale of business of the enterprise, and current laws. Reviewing, evaluating, and adjusting reinsurance programs annually or when market conditions change. In cases where the insurance enterprise does not have a Board of Directors (Board of Members, Company Chairman), the General Director's Office bears the responsibility for approving reinsurance programs.

1.1.2. A reinsurance program includes the following main contents:

a) Determining the risk acceptance capability of the insurance enterprise;

b) Determining the appropriate retention level for accepted risks, limits on retention per risk unit, and maximum protection from reinsurers;

c) Determining the most suitable types and methods of reinsurance for managing accepted risks.

d) Method, standards, and procedures for selecting companies to reinsure, including the method for assessing the level of risk and financial safety of the reinsured company;

đ) List of companies expected to accept reinsurance, noting diversification and ranking of reinsurers;

e) Method for using the deposit amount, if any;

g) Management of accumulated risks in specific sectors, geographic regions, and special product types;

h) Methods for controlling the reinsurance program, including reporting and internal control systems.

1.2. Implementation of the Reinsurance Program

 1.2.1. Based on the approved reinsurance program by the Board of Directors, the Board of Members, and the Company Chairman, the General Director (Director) of the insurance company is responsible for issuing internal procedures and guidelines for reinsurance business operations, specifically including:

a) Insurance sales process, clearly stating the types of insurance products being sold; insurance rules, terms, and total liability according to each type of insurance product;

b) Determining automatic self-insurance 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 that each risk is insured;

1.2.2. The insurance company is responsible for regularly updating the list of companies accepting reinsurance, along with information about their risk levels, capabilities, readiness to pay corresponding compensation for assumed liabilities; requesting deposits corresponding to the risk levels and credit ratings of each accepting reinsurance company.

2. Retention Level

2.1. The insurance company must calculate the retention level for each type of insurance and for each type of risk; the retention level on a single risk and on a single insurance event.

2.2. When calculating the retention level, the insurance company must consider the following factors:

2.2.1. Legal provisions regarding solvency;

2.2.2. Sales capacity;

2.2.3. Financial capability;

2.2.4. The company's willingness to accept risks;

2.2.5. Arrangements for protecting large and catastrophic risks;

2.2.6. Balancing business results;

2.2.7. Components of the insurance contract portfolio;

2.2.8. Trends in domestic and international reinsurance markets.

2.3. The insurance company is only permitted to retain a maximum liability of up to 10% of its equity on each risk or individual loss. Any liability exceeding this 10% ratio must be reinsured.

2.4. The insurance company shall not accept reinsurance for risks it has already reinsured.

3. Ceding Reinsurance

3.1. The insurance company may transfer part of the liability it has accepted for insurance to one or more other insurance companies but shall not cede the entire liability of an insurance contract to another insurance company.

3.2. For limited reinsurance (finite reinsurance), before signing a reinsurance contract, the insurance company must issue a notice signed by a legal representative to the Ministry of Finance regarding the main contents of the reinsurance contract, the purpose of signing the contract, and the commitment to comply with legal regulations on insurance business and accounting systems applicable to the insurance company. In cases where the insurance company has entered into such limited reinsurance contracts prior to the effectiveness of this Circular, the insurance company must report these matters to the Ministry of Finance.

3.3. Transferring reinsurance to foreign insurance companies shall not be conducted under more favorable conditions than transferring reinsurance to domestic insurance companies.

4. Conditions for foreign reinsurance receiving enterprises 4.1. Foreign reinsurance receiving enterprises must be legally operating and fully meet the requirements regarding payment capacity as stipulated by the laws of the country where the enterprise has its headquarters.

4.2. The leading enterprise receiving reinsurance must have a minimum rating of "BBB" according to Standard & Poor's, "B++" according to A.M.Best, "Baa" according to Moody’s, or equivalent ratings at the most recent fiscal year compared to the time of concluding the reinsurance contract.

In cases of reinsuring a parent company abroad or companies within a group without credit ratings as specified above, the insurance enterprise must submit a report to the Ministry of Finance.

VII. INSURANCE AGENTS

1. Responsibilities of training institutions for insurance agents in training insurance agents

1.1. Training institutions wishing to train insurance agents must submit a request to the Ministry of Finance for approval of the agent training program in accordance with Clause 2, Article 31 of Decree 45/2007/NĐ-CP, along with training procedures and quality assessment, examination organization procedures for certification, and procedures for issuing and managing agent training certificates.

1.2. The initial training period for insurance agents must be a minimum of 40 hours. The continuous training period must be a minimum of 16 hours per quarter for non-life insurance agents and 24 hours per quarter for life insurance agents.

1.3. Issuing agent training certificates

1.3.1. Only training institutions approved by the Ministry of Finance may issue agent training certificates. Certificate recipients must complete the agent training program and pass the agent training certificate examination.

1.3.2. Agent training certificates shall be issued in the format prescribed in Appendix 10 attached hereto.

1.4. Annually, no later than January 30 of the following year, training institutions for insurance agents must report to the Ministry of Finance on the number of training courses organized, the number of insurance agents trained, and the number of certificates issued in the year, in the format prescribed in Appendix 11 attached hereto. Quarterly, no later than the 15th day of the first month of each quarter, insurance enterprises must report to the Ministry of Finance and notify the Vietnam Insurance Association of the list of active insurance agents and the list of agents who violated agency practice regulations or laws and had their agency contracts terminated by the enterprise, in the format prescribed in Appendix 12 attached hereto.

2. Rights and obligations of insurance enterprises and insurance agents

2.1. The rights and obligations of insurance enterprises in managing insurance agent activities, and the rights and obligations of insurance agents are stipulated in Articles 29 and 30 of Decree 45/2007/NĐ-CP.

2.2. Insurance enterprises are not allowed to enter into contracts with insurance agents who have previously been terminated from agency contracts by other insurance enterprises due to serious violations of laws and agency contracts within three years from the date of termination of the agency contract.

When terminating an agency contract for the reasons mentioned above, the insurance enterprise must inform the Vietnam Insurance Association to notify other insurance enterprises.

2.3. In case of changes to the agent training program and training conditions registered with the Ministry of Finance, insurance enterprises must submit a report to the Ministry of Finance with explanatory documents for these changes thirty days before implementing the new training course.

3. Insurance agents are strictly prohibited from engaging in the following actions:

3.1. Providing false information or advertising about the content and scope of operations of insurance enterprises, insurance terms and conditions that harm the legitimate rights and interests of policyholders.

3.2. Preventing policyholders from providing information related to insurance contracts or inciting policyholders not to disclose details related to insurance contracts.

3.3. Competing for customers through obstructive, enticing, bribing, or threatening employees or customers of insurance enterprises, insurance agents, or other insurance brokerage enterprises.

3.4. Promoting customers through illegal means such as promising to reduce insurance premiums, refund insurance premiums, or other benefits that the insurance enterprise does not provide to customers.

3.5. Inciting policyholders to cancel existing insurance contracts to purchase new ones..

4. Supervision of training and utilization of insurance agents

4.1. Training institutions for insurance agents are responsible under the law for all activities related to training insurance agents.

4.2. Insurance enterprises are responsible under the law for all activities related to recruiting, managing, training, and utilizing insurance agents.

4.3. The Ministry of Finance may conduct regular or surprise inspections of recruitment, training, management, and utilization of insurance agents by insurance enterprises and training institutions for insurance agents.

Such inspections shall not affect the normal operation of insurance enterprises and training institutions for insurance agents.

5. Business registration of organizations engaged in insurance agency activities

Organizations engaged in insurance agency activities must register their business in accordance with the Law on Enterprises and guiding documents.

VIII. INSURANCE BROKERS

1. Insurance enterprises may authorize insurance brokers to collect insurance premiums, make indemnities, or pay insurance proceeds. Such authorization must be documented, specifying the duration and scope of authorized activities.

2. In cases where insurance brokers are authorized by insurance enterprises to collect insurance premiums, the obligation of policyholders to pay insurance premiums is fulfilled when they have paid the premiums according to the insurance contract to the insurance broker.

2. In the case where an insurance brokerage enterprise is authorized by an insurance enterprise to collect insurance premiums, the obligation of the insurance buyer to pay the insurance premium is fulfilled when the insurance buyer has paid the insurance premium according to the insurance contract to the insurance brokerage enterprise.

In the case where the insurance brokerage enterprise is authorized by the insurance enterprise to collect insurance premiums and the insurance buyer has paid the insurance premium according to the agreement in the insurance contract, the insurance brokerage enterprise shall be responsible for paying the said amount of insurance premium to the insurance enterprise within the agreed time between the insurance enterprise and the insurance brokerage enterprise. In the absence of an agreement on the payment period, the insurance brokerage enterprise must pay the said amount of insurance premium to the insurance enterprise at the earliest possible time but not exceeding 7 days from the date of receiving the insurance premium.

3. In the case where the insurance brokerage enterprise is authorized by the insurance enterprise to pay insurance money or compensation, the insurance enterprise still bears responsibility towards the insured person or beneficiary regarding the amount of insurance money that the insurance enterprise is obligated to pay to the insured person or beneficiary.

4. In the case where the insurance brokerage enterprise is authorized by the insurance enterprise to pay insurance money or compensation, the insurance brokerage enterprise shall be responsible for immediately paying the said amount of insurance money to the insured person or beneficiary upon receipt of the insurance money from the insurance enterprise.

5. The insurance brokerage enterprise shall not carry out the following acts:

5.1. Obstructing the insurance buyer from providing information related to the insurance contract or inciting the insurance buyer not to declare details related to the insurance contract;

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

5.3. Inciting the insurance buyer to cancel existing insurance contracts to purchase new insurance contracts;

5.4. Advising customers to purchase insurance from an insurance enterprise with less competitive terms and conditions compared to other insurance enterprises in order to obtain higher brokerage commissions.

IX. REPRESENTATIVE OFFICES OF FOREIGN INSURANCE ENTERPRISES AND FOREIGN INSURANCE BROKERAGE ENTERPRISES IN VIETNAM

1. Documents for applying for permission to establish a representative office

1.1. Foreign insurance enterprises and foreign insurance brokerage enterprises wishing to establish a representative office in Vietnam shall submit to the Ministry of Finance a set of documents for applying for permission to establish a representative office in accordance with Article 110 of the Insurance Business Law.

1.2. The application for establishing a representative office in Vietnam must be signed by the Chairman of the Board of Directors or an authorized person of the foreign insurance enterprise or foreign insurance brokerage enterprise, in the form prescribed in Appendix 13 attached to this Circular.

1.3. Within thirty days from the date of receipt of the complete set of documents for applying for permission to establish a representative office, the Ministry of Finance shall issue a written approval or rejection of the application of the enterprise. In the case of rejection, the reasons must be clearly stated in writing. In the case of approval, the Ministry of Finance shall issue a permit for the establishment of a representative office of the foreign insurance enterprise or foreign insurance brokerage enterprise in Vietnam in the form prescribed in Appendix 14 attached to this Circular.

2. Reports on the activities of the representative office

2.1. The representative office of the foreign insurance enterprise or foreign insurance brokerage enterprise in Vietnam shall report to the Ministry of Finance on the activities of the representative office semi-annually and annually to the Ministry of Finance and the People's Committee of the province or city where the representative office is located.

The mid-year report must be submitted before July 30 and the annual report must be submitted before March 1 of the following year.

2.2. Content of the report

2.2.1. Organizational structure of the representative office, personnel, number of Vietnamese and foreign nationals working at the representative office;

2.2.2. Main activities:

a) Market access of the representative office;

b) Relations between the representative office and domestic insurance enterprises, insurance brokerage enterprises, and economic organizations;

c) Advisory and training work;

d) Other activities of the representative office.

2.2.3. Future directions for activities.

2.3. In cases deemed necessary, the Ministry of Finance may request the representative office to submit additional reports outside the regular reporting schedule, provide relevant documents, and explain issues related to its operations.

3. Changes to the contents of the permit

3.1. When there is a change in any of the following items in the permit for establishing a representative office, the foreign insurance enterprise or foreign insurance brokerage enterprise shall submit a written request to the Ministry of Finance to amend or supplement the permit:

3.1.1. Change in name, nationality, address of the foreign insurance enterprise or foreign insurance brokerage enterprise or the name of the representative office;

3.1.2. Change in the scope of activities of the representative office.

Within thirty days from the date of receipt of the written request of the foreign insurance enterprise or foreign insurance brokerage enterprise, the Ministry of Finance will issue a written response regarding the approval or rejection of the request. In the case of rejection, the Ministry of Finance must issue a written explanation of the reasons.

3.2. In the case of changes in the Chief Representative, increases or decreases in the number of foreign staff working at the representative office, Vietnamese staff working at the representative office, or changes in the location of the representative office, the foreign insurance enterprise or foreign insurance brokerage enterprise shall immediately notify the Ministry of Finance in writing.

4. Extension of the operation of the representative office

4.1. Foreign insurance enterprises and foreign insurance brokerage enterprises wishing to extend the operation of their representative offices in Vietnam shall submit to the Ministry of Finance a set of documents for extending the operation of the representative office thirty days before the expiration date of the permit for establishing the representative office. The documents for extending the operation include:

4.1.1. A written request for extension of the representative office signed by the Chairman or an authorized person of the foreign insurance enterprise or foreign insurance brokerage enterprise;

4.1.2. The permit for establishment and operation of the foreign insurance enterprise or foreign insurance brokerage enterprise;

4.1.3. A copy of the license for establishing a representative office in Vietnam and the decision to extend the operation of the representative office of foreign insurance companies and insurance brokerage companies (if any);

4.1.4. A summary report on the activities of the representative office in the last three years;

4.1.5. Financial reports of the foreign insurance company and foreign insurance brokerage company in the last two years;

4.1.6. The name and curriculum vitae of the head of the representative office in case of change of the head of the representative office.

4.2. Within thirty days from the date of receiving all the application documents for extending operations, the Ministry of Finance will issue a document approving or rejecting the application. In case of rejection, the Ministry of Finance will issue a document explaining the reasons.

5. Termination of the representative office's operations:

5.1. The representative office shall terminate its operations in one of the following cases:

5.1.1. At the request of the foreign insurance company or foreign insurance brokerage company;

5.1.2. When the foreign insurance company or foreign insurance brokerage company ceases operations;

5.1.3. When the representative office violates laws on insurance business operations;

5.1.4. When there is a decision to revoke or cancel the establishment license issued by competent state agencies according to Vietnamese law.

In cases where the termination of operations is based on points 5.1.1 and 5.1.2 above, the foreign insurance company or foreign insurance brokerage company must send a notification letter regarding the termination of the representative office's operations to the Ministry of Finance within no more than thirty days before the termination date, and must return the original license for establishing the representative office and related licenses and decisions during the representative office’s operations to the Ministry of Finance.

Within fifteen days, the Ministry of Finance will issue a document approving the termination of the representative office's operations and notify relevant agencies that have received copies of the license for establishing the representative office.

In cases where the termination of operations is based on points 5.1.3 and 5.1.4 above, the Ministry of Finance will send a decision to revoke or cancel the establishment license of the representative office to the foreign insurance company or foreign insurance brokerage company at least thirty days prior to the date the representative office is required to cease operations, and send a copy of this decision to relevant agencies that have received copies of the establishment license.

X. PROCEDURES AND DOCUMENTS FOR TRANSFERRING INSURANCE CONTRACTS

1. Transfer of Insurance Contracts

1.1. During its operations, an insurance company may transfer all or part of an insurance contract or several types of insurance business (hereinafter referred to as "transfer") to other insurance companies permitted to operate in Vietnam, as stipulated in Section 3, Chapter III, Insurance Business Law.

1.2. The transfer must ensure that it does not cause damage to the interests of the policyholder after the transfer has been completed.

2. Procedures for Transfer

2.1. For the transferring insurance company (hereinafter referred to as "transferring company"): the transferring company must submit a transfer proposal to the Ministry of Finance, detailing the reasons for requesting the transfer, accompanied by the following documents:

A transfer plan specifying:

a) The name and address of the insurance company receiving the transfer (hereinafter referred to as "receiving company");

b) Types of insurance business and the number of insurance contracts being transferred;

c) Methods for transferring funds, reserves, and claims related to the transferred contracts;

d) Expected time frame for completing the transfer;

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

f) The transfer agreement between the transferring company and the receiving company, including the following main contents:

- Objectives of the transfer;

- Expected time frame for completing the transfer;

- Rights and obligations of the parties involved in the transfer;

- Dispute resolution methods.

2.1.2. Commitment by the receiving company to ensure the rights of the policyholders under the transferred insurance contracts after the transfer becomes effective.

2.2. Within fifteen days from the date the transfer proposal is approved by the Ministry of Finance, the transferring company is responsible for:

2.2.1. Publishing a notice about the transfer in two central newspapers for five consecutive issues, containing the following main information:

a) The name and address of the transferring company and the receiving company;

b) Types of insurance business and the number of insurance contracts being transferred;

c) The expected time frame for completing the transfer;

d) The address for handling complaints and inquiries from policyholders related to the transfer.

2.2.2. The transferring company must send a notice along with a summary of the transfer plan to each policyholder immediately after the Ministry of Finance approves the transfer proposal. The notice sent to the policyholder must clearly specify the deadline for the policyholder to cancel the insurance contract if they disagree with the transfer plan and the effective date of the transfer plan.

2.2.3. Policyholders have the right to cancel the insurance contract within fifteen days from the date they receive the notice about the transfer according to the postmark. If a policyholder cancels the insurance contract, the transferring company must refund the corresponding premium paid for the remaining period of the insurance contract, deducting reasonable related costs for non-life insurance; or the premium paid by the policyholder, deducting reasonable related costs for life insurance.

2.3. From the date the Ministry of Finance approves the transfer proposal, the transferring company may not enter into new insurance contracts for the type of insurance business that has been transferred.

2.4. Within sixty days from the date the Ministry of Finance approves the transfer plan, the transferring company must transfer to the receiving company:

2.4.1. All valid insurance contracts included in the approved transfer plan.

2.4.2. Documents related to unresolved insurance complaints that are transferred;

2.4.3. All assets, funds, and reserves related to the transferred insurance contracts and documents related to unresolved insurance complaints that are transferred;

3. Approval of the proposal for transferring insurance contracts

3.1. Within thirty days from the date of receipt of all documents for the transfer proposal, the Ministry of Finance shall issue a document approving, disapproving, or requesting amendments and supplements to the transfer proposal documents. In case the Ministry of Finance requests amendments and supplements to the documents, within sixty days from the date of receipt of such request, the transferring enterprise must resubmit the amended and supplemented documents to the Ministry of Finance. Beyond this period, the Ministry of Finance has the right to disapprove the transfer proposal documents. In case of disapproval, the Ministry of Finance shall provide written reasons for the disapproval.

3.2. After approving the transfer proposal documents, the Ministry of Finance will issue an adjustment license according to Model 6 attached to this Circular to the transferring enterprise in accordance with the insurance operations that the transferring enterprise is still permitted to conduct.

4. Responsibilities of the receiving enterprise

4.1. The receiving enterprise is responsible for coordinating with the transferring enterprise in developing the transfer plan, determining the value of assets related to funds and reserves of the transferred insurance contracts, and agreeing on the effective date of the transfer plan.

4.2. From the date of receipt of the transfer, the receiving enterprise is 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 any complaints that have occurred but not yet reported. The receiving enterprise has the right to accept assets related to funds and reserves of the transferred insurance contracts and use these assets to fulfill the obligations under the transferred insurance contracts.

XI. IMPLEMENTATION

1. This Circular takes effect fifteen days from the date of publication in the Official Gazette.

2. This Circular replaces Circular No. 98/2004/TT-BTC dated October 19, 2004, issued by the Ministry of Finance guiding the implementation of Decree No. 42/2001/NĐ-CP dated August 1, 2001, of the Government detailing certain provisions of the Law on Insurance Business.

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