Decree No. 21/2023/ND-CP on microinsurance

DECREE
Regulations on Microinsurance

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Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Investment Law dated June 17, 2020;

Pursuant to the Insurance Business Law dated June 16, 2022;

At the proposal of the Minister of Finance,

The Government promulgates this Decree on microinsurance.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree provides detailed regulations for implementing Clause 2 of Article 88 on microinsurance, Clause 3 of Article 144, Clause 3 of Article 145, Clause 2 of Article 146, Clause 3 of Article 148, Clauses 2, 3, and 5 of Article 149, and Clause 5 of Article 150 of the Insurance Business Law.

Article 2. Applicability

1. Organizations providing microinsurance include:

a) Non-life insurance companies, life insurance companies, health insurance companies (hereinafter referred to as insurance companies), branches of foreign non-life insurance companies established and operating in Vietnam;

b) Mutual organizations providing microinsurance established and operating in Vietnam.

2. State management agencies for insurance business activities.

3. Organizations and individuals related to microinsurance activities include:

a) The insured party in a microinsurance contract, members participating in microinsurance;

b) Organizations representing members.

c) Other relevant organizations and individuals.

Chapter II

MICROINSURANCE PRODUCTS

Article 3. Maximum insurance amount and premium of microinsurance products

1. The insurance amount of each microinsurance contract protecting risks related to life and health shall not exceed five times the average annual income per capita of the near-poor standard household in urban areas as prescribed by the Government at the time of product implementation.

2. The insurance amount of each microinsurance contract protecting risks related to property shall not exceed the market value of the insured property at the time of insurance participation and shall not exceed five times the average annual income per capita of the near-poor standard household in urban areas as prescribed by the Government at the time of product implementation.

3. The annual premium of each microinsurance contract shall not exceed five percent of the average annual income per capita of the near-poor standard household in urban areas as prescribed by the Government at the time of product implementation. The premium must correspond to the insurance benefits.

Article 4. Microinsurance products implemented by insurance companies and branches of foreign non-life insurance companies

1. Insurance companies and branches of foreign non-life insurance companies implementing microinsurance products must comply with the provisions of the Insurance Business Law and guiding documents for its implementation; Articles 3, 4, and 6 of this Decree.

2. Life insurance companies may provide microinsurance products protecting risks related to life and health with a term not exceeding five years.

3. Non-life insurance companies and branches of foreign non-life insurance companies may provide:

a) Microinsurance products protecting risks related to life and health with a term of up to one year;

b) Microinsurance products protecting risks related to property with a term not exceeding five years.

4. Health insurance companies may provide:

a) Microinsurance products protecting risks related to life with a term of up to one year;

b) Microinsurance products protecting risks related to health with a term not exceeding five years.

5. The name of microinsurance products implemented by insurance companies and branches of foreign non-life insurance companies must contain the phrase "Microinsurance Product" to distinguish them from other insurance products of these companies.

Article 5. Microinsurance products provided by mutual organizations shall be implemented by microinsurance mutual organizations.

Microinsurance mutual organizations may only implement microinsurance products with terms not exceeding one year to meet the needs of members. The insurance products include one or more specific benefits as follows:

1. Health care benefit: providing partial or full support for hospitalization and surgery costs for the insured person when the insured person is hospitalized or undergoes surgery within the scope of coverage.

2. Accident insurance benefit: paying out the insurance amount corresponding to the percentage of disability caused by accidents of the insured person according to the agreement in the microinsurance contract when the insured person suffers from disabilities due to accidents within the scope of coverage.

3. Death or total permanent disability insurance benefit: paying out the insurance amount to the beneficiary according to the agreement in the microinsurance contract when the insured person dies or suffers from total permanent disability within the scope of coverage.

4. Funeral assistance benefit: paying out additional funeral assistance according to the agreement in the microinsurance contract when the death insurance benefit is paid out.

5. Property insurance benefit: paying out insurance compensation according to the agreement in the microinsurance contract when the insured property suffers damage due to causes within the scope of coverage.

Article 6. Documents, procedures, and processes for registering the method and basis for calculating insurance fees for microinsurance products.

1. Microinsurance providers must register the basis and method for calculating insurance fees for microinsurance products before implementation.

2. Microinsurance providers must submit one set of registration documents for the basis and method of calculating insurance fees to the Ministry of Finance, including the following documents:

a) A request for registration of the basis and method of calculating insurance fees according to Form No. 06 stipulated in the Appendix issued together with this Decree;

b) A summary of the insurance benefits and exclusion clauses of the planned microinsurance product;

c) The formula, method, and basis for calculating pure insurance fees, combined insurance fees, and explanatory documents on the basis used to calculate insurance fees for the planned microinsurance product; principles for increasing or decreasing insurance fees (if applicable). These documents must be confirmed by a Microinsurance Actuary Expert.

3. Within 14 days from the date of receiving complete and valid documents, the Ministry of Finance will issue a document approving the basis and method of calculating insurance fees for microinsurance providers. In case of refusal to approve, the Ministry of Finance will issue a document explaining the reasons.

4. In case of changing the basis and method of calculating insurance fees for microinsurance products, microinsurance providers must submit one set of documents requesting approval for modification and supplementation of the basis and method of calculating insurance fees, including the following documents:

a) A request for modification and supplementation of the basis and method of calculating insurance fees according to Form No. 06 stipulated in the Appendix issued together with this Decree;

b) Explanatory documents on the contents of modification and supplementation, confirmed by a Microinsurance Actuary Expert.

5. Within 14 days from the date of receiving complete and valid documents, the Ministry of Finance will issue a document approving the modification and supplementation of the basis and method of calculating insurance fees for microinsurance providers. In case of refusal to approve, the Ministry of Finance will issue a document explaining the reasons.

Chapter III
ESTABLISHMENT, ORGANIZATION AND OPERATIONS
OF MUTUAL ORGANIZATIONS PROVIDING MICROINSURANCE

Section 1
ISSUANCE, RENEWAL, MODIFICATION, SUPPLEMENTATION, REVOCATION OF LICENSES
ESTABLISHMENT AND OPERATIONS, SUSPENSION OF ACTIVITIES
OF MUTUAL ORGANIZATIONS PROVIDING MICROINSURANCE

Article 7. Conditions for Issuing Licenses to Establish and Operate Mutual Organizations Providing Microinsurance

Mutual organizations providing microinsurance must meet the conditions stipulated in Article 149 of the Insurance Business Law, specifically the conditions set forth in Clause 2, Clause 3, and Clause 5 of Article 149 of the Insurance Business Law as follows:

1. Having a founding capital in Vietnamese Dong not less than 10 billion VND. The sources of the founding capital for mutual organizations providing microinsurance include:

a) Capital contributions from individual founders. Founding members may not use borrowed funds or entrusted investment capital from other organizations or individuals to participate in capital contributions;

b) Support from member representative organizations;

c) Sponsorship from sponsors, international organizations, programs, and projects;

d) Other lawful sources as prescribed by law.

2. Personnel intended to serve as Chairman of the Board of Directors, General Director (Director), Legal Representative, and Microinsurance Actuarial Expert must meet the conditions and standards specified in Articles 24 and 25 of this Decree.

3. A draft charter consistent with the operational objectives of the mutual organization providing microinsurance and the provisions of Article 8 of this Decree.

Article 8. Charter of Mutual Organizations Providing Microinsurance

1. The charter of mutual organizations providing microinsurance shall include at least the following contents:

a) The name and proposed main office location of the mutual organization providing microinsurance;

b) The purpose of establishing the mutual organization providing microinsurance;

c) Content, scope, geographical area, and duration of operations;

d) Procedures for membership, procedures for terminating membership status, rights, and obligations of members. Members of mutual organizations providing microinsurance must be Vietnamese citizens aged 18 years or older, having full civil capacity; they must be members of the same organization and meet the conditions stipulated in the charter of the mutual organization providing microinsurance;

e) Name, address, rights, obligations, and number of founding members (at least seven people) of the mutual organization providing microinsurance (in cases where founding members are individuals); name, address, rights, and obligations of the member representative organization (in cases where founding members are member representative organizations);

f) Organizational structure, functions, tasks, powers, term, and methods of operation of the Member Assembly (for cases where founding members are individuals), Board of Directors, Management Board, Supervisory Board; procedures for electing, dismissing, and relieving members of the Board of Directors, Chairman of the Board of Directors, Supervisory Board;

g) Circumstances for convening extraordinary member assemblies (for cases where founding members are individuals);

h) Procedures and steps for convening member assemblies and adopting resolutions at member assemblies; criteria, procedures, and steps for electing delegates to attend member assemblies (for cases where founding members are individuals);

i) Founding capital of the mutual organization providing microinsurance; methods of capital contribution; methods and principles for refunding founding capital supported by the member representative organization (if applicable);

j) Financial regulations; principles for determining increases or decreases in insurance premiums; methods of using the results of the mutual organization providing microinsurance's operations;

k) Principles for resolving internal disputes;

l) Principles and order of asset distribution in the event that the mutual organization providing microinsurance is dissolved hỗ trợ cung cấp bảo hiểm vi mô giải thíchdevelopment;

2. Replacing, supplementing, or amending the charter of mutual organizations providing microinsurance is decided by the Member Assembly (for cases where founding members are individuals) or the member representative organization (for cases where founding members are member representative organizations).

Article 9. Founding Conference for Mutual Organizations Providing Microinsurance

1. Participants in the Founding Conference for Mutual Organizations Providing Microinsurance where founding members are individuals shall include:

a) Founding members;

b) Other members belonging to the same organization as the founding members and having the desire to participate in microinsurance products.

2. The Conference shall adopt Resolutions on the following contents:

a) Delegating authority to a representative among the founding members to submit applications for establishment and operation permits of mutual organizations providing microinsurance;

b) Draft Charter of the mutual organization providing microinsurance;

c) Proposed plan to implement microinsurance products in accordance with point d, Clause 2, Article 10 of this Decree;

d) Proposed personnel to be appointed as Chairman of the Board of Directors, General Director or Director, Legal Representative, Microinsurance Actuary;

đ) Other contents related to the establishment and organization, operation of mutual organizations providing microinsurance.

3. The Resolution of the Founding Conference for Mutual Organizations Providing Microinsurance stipulated in Clause 2 of this Article must be adopted through voting with at least 51% approval.

Article 10. Documents, Procedures, and Formalities for Issuing Licenses for Establishment and Operation of Mutual Organizations Providing Microinsurance

1. Founding members must submit applications for licenses for establishment and operation of mutual organizations providing microinsurance according to the following provisions:

a) In cases where founding members are individuals as prescribed in point a, Clause 1, Article 149 of the Insurance Business Law: the founding members must organize a Founding Conference for Mutual Organizations Providing Microinsurance in accordance with Article 9 of this Decree. The authorized representative shall submit applications for establishment and operation permits of mutual organizations providing microinsurance;

b) In cases where founding members are representative organizations of members as prescribed in point b, Clause 1, Article 149 of the Insurance Business Law: the person authorized by the representative organization of members shall submit applications for establishment and operation permits of mutual organizations providing microinsurance.

2. Applications for licenses for establishment and operation of mutual organizations providing microinsurance shall include:

a) Application form for license for establishment and operation according to Model No. 01 prescribed in the Appendix issued together with this Decree;

b) Draft Charter of the mutual organization providing microinsurance;

c) Confirmation from a commercial bank permitted to operate in Vietnam regarding the amount of capital for establishment (not less than the minimum capital prescribed in Clause 1, Article 7 of this Decree) which has been deposited in a blocked account opened at the bank and can only be released after the Ministry of Finance issues a license for establishment and operation of mutual organizations providing microinsurance or issues a document rejecting the issuance of the license;

d) Plan to implement microinsurance specifying the implementation process, deployment network; projected revenue, costs, and results of microinsurance operations in the first three years of implementation consistent with the number of members and network of the organization;

đ) Resolution of the Founding Conference for Mutual Organizations Providing Microinsurance on the establishment of mutual organizations providing microinsurance containing the contents prescribed in Clause 2, Article 9 of this Decree (for cases where founding members are individuals);

e) Document from the competent authority according to the Charter of the representative organization of members regarding the establishment of mutual organizations providing microinsurance (for cases where founding members are representative organizations of members);

g) List of founding members and documents proving that founding members meet the requirements prescribed in point a, Clause 1, Article 149 of the Insurance Business Law (for cases where founding members are individuals);

h) Charter, copy of the decision to establish or business registration certificate or equivalent document of the representative organization of members (for cases where founding members are representative organizations of members);

i) Curriculum vitae, Criminal Record Certificate; copy of identity card or citizen identification card or passport or other lawful personal identification; copy of diplomas, certificates, and documents proving the qualifications and professional expertise of the persons proposed to be appointed as Chairman of the Board of Directors, General Director or Director, Legal Representative, Microinsurance Actuary of the mutual organization providing microinsurance;

k) Explanation and commitment to build an information technology system meeting the conditions prescribed in Clause 6, Article 149 of the Insurance Business Law.

3. Within 21 days from the date of receipt of the application for a license, if the application is incomplete or invalid, the Ministry of Finance shall notify in writing to request supplementation and amendment of the application. The maximum time limit for supplementation and amendment of the application is six months from the date of notification. If the organization or individual applying for a license does not supplement or amend the application within the prescribed time limit, the Ministry of Finance shall issue a document rejecting the examination and issuance of the license.

4. Within 60 days from the date of receiving complete and valid applications, the Ministry of Finance shall issue a license for mutual organizations providing microinsurance according to Model No. 02 prescribed in the Appendix issued together with this Decree. In case of refusal to issue a license, the Ministry of Finance shall issue a document explaining the reasons.

5. The Ministry of Finance shall publish the contents of the license for establishment and operation of mutual organizations providing microinsurance on its official website within 30 days from the date of issuing the license.

Article 11. Documents, procedures, and formalities for requesting to reissue the License for Establishment and Operation

1. In cases where the License for Establishment and Operation of a microinsurance mutual organization is lost, destroyed, damaged, or otherwise eliminated, the microinsurance mutual organization shall submit to the Ministry of Finance a request for reissuing the License for Establishment and Operation in accordance with Clause 2 of this Article.

2. The documents for requesting to reissue the License for Establishment and Operation include:

a) A request for reissuing the License for Establishment and Operation in Form No. 03 as prescribed in the Appendix issued together with this Decree;

b) A commitment from the microinsurance mutual organization regarding the loss, damage, destruction, or elimination of the License and supporting documents (if any).

3. Within 14 days from the date of receiving complete and valid documents, the Ministry of Finance shall reissue the License for Establishment and Operation. In case of refusal, the Ministry of Finance shall issue a document explaining the reasons.

Article 12. Documents, procedures, and formalities for amending and supplementing the License for Establishment and Operation

1. A microinsurance mutual organization must request the Ministry of Finance to amend and supplement the License for Establishment and Operation in the following cases:

a) Changing its name or main office location;

b) Amending the scope and duration of operations.

2. The documents for requesting to change the name or main office location include the following:

a) A document proposing to change the name or main office location in Form No. 04 as prescribed in the Appendix issued together with this Decree;

b) A document from the competent authority as stipulated in the Charter of the microinsurance mutual organization regarding the change of name or main office location;

c) Proof of rights to use the main office location (for changes in the main office location).

3. The documents for requesting to amend the scope and duration of operations include the following:

a) A document proposing to amend the scope and duration of operations in Form No. 04 as prescribed in the Appendix issued together with this Decree;

b) A document from the competent authority as stipulated in the Charter of the microinsurance mutual organization regarding the amendment of the scope and duration of operations;

c) Supporting documents proving that the microinsurance mutual organization has fully deposited the required collateral as prescribed in Article 37 of this Decree; has fully established business reserves as prescribed in Article 38 of this Decree; has positive operating results at the time of preparing the audited financial report of the immediately preceding year (for expanding the scope and duration of operations); ensures fulfillment of obligations towards microinsurance participants (for reducing the scope and duration or changing the operation period).

4. Within 14 days from the date of receiving complete and valid documents (for requests to amend the scope and duration of operations) or within seven working days from the date of receiving complete and valid documents (for requests to change the name or main office location), the Ministry of Finance shall issue an amended License in Form No. 05 as prescribed in the Appendix issued together with this Decree. In case of refusal, the Ministry of Finance shall issue a document explaining the reasons.

Article 13. Procedure and formalities for suspending the content of operations of mutual organizations providing micro-insurance

1. Within fifteen days from the end of the period specified in Clause 4, Article 36 of this Decree, the Ministry of Finance shall decide to suspend the content of operations of mutual organizations providing micro-insurance in writing. Depending on the nature and extent of the violation, the suspension period ranges from one to six months.

2. During the period of suspension of operations, mutual organizations providing micro-insurance must comply with the following provisions:

a) Not signing new or extending micro-insurance contracts;

b) Fully setting aside reserves according to the provisions of the law for micro-insurance contracts signed before the date of suspension; continuing to pay debts and fulfill obligations under contracts concluded with participating members and workers in accordance with the law;

c) Implementing measures to address the violation situation.

3. Within fifteen days from the end of the suspension period, mutual organizations providing micro-insurance must report to the Ministry of Finance on the results of implementing the measures to address the violation situation.

a) In cases where the violation situation has been resolved, the mutual organization providing micro-insurance may continue its normal operations;

b) In cases where the violation situation cannot be resolved, the Ministry of Finance will carry out the revocation of the License for establishment and operation of the mutual organization providing micro-insurance. The revocation of the License for establishment and operation shall be carried out in accordance with Articles 14 and 16 of this Decree.

Article 14. Revocation of the License for establishment and operation

1. Mutual organizations providing micro-insurance shall have their License for establishment and operation revoked in the following cases:

a) The application dossier for the License for establishment and operation contains false information to meet the conditions for issuance of the License;

b) Operating activities do not conform to the contents stipulated in the License for establishment and operation;

c) Unable to rectify the violation situation as prescribed in Point b, Clause 3, Article 13 of this Decree;

d) Unable to increase the number of members as reported to the Ministry of Finance in accordance with Clause 3, Article 32 of this Decree;

đ) Voluntary dissolution

2. For cases prescribed in Points a and b, Clause 1 of this Article, the procedure and formalities for revoking the License for establishment and operation shall be carried out in accordance with Article 15 of this Decree.

3. For cases prescribed in Points c and d, Clause 1 of this Article, the procedure and formalities for revoking the License for establishment and operation shall be carried out in accordance with Article 16 of this Decree.

4. For cases prescribed in Point đ, Clause 1 of this Article, the dossier, procedure, and formalities for revoking the License for establishment and operation shall be carried out in accordance with Article 17 of this Decree.

5. Mutual organizations providing micro-insurance cease operations from the date the Ministry of Finance issues the Decision to revoke the License for establishment and operation.

Article 15. Procedure and formalities for revoking the License for establishment and operation in cases of fraud in licensing and operating activities not conforming to the contents stipulated in the License for establishment and operation

1. From the date of signing the record confirming the violation for the cases prescribed in Points a and b, Clause 1 of Article 14 of this Decree, mutual organizations providing micro-insurance must comply with the following provisions:

a) Not signing new or extending micro-insurance contracts;

b) Notify all participating members of micro-insurance, individuals, and related organizations about the implementation of asset distribution prior to the revocation of the License for establishment and operation;

c) Establish a Liquidation Committee to implement asset distribution in accordance with the priority order prescribed in Clause 2 of this Article.

2. Asset distribution shall be carried out in the following priority order:

a) Pay compensation and insurance proceeds for claims within the scope of insurance coverage;

b) Refund premiums corresponding to the remaining term of the micro-insurance contract;

c) Pay wages, severance benefits, social insurance, and health insurance for workers;

d) Fulfill financial obligations to the State; refund unsecured debts to creditors listed in the creditor list; refund secured debts that have not been paid due to the value of the collateral being insufficient to cover the debt;

đ) Return the founding capital from the founding members.

If the asset value is insufficient for distribution, entities belonging to the same priority order shall be paid in proportion to their respective debts. After distributing the above amounts, if there are still assets left, they shall be distributed to the founding members and participating members of micro-insurance.

3. Within twelve months from the date of signing the record confirming the violation, mutual organizations providing micro-insurance must complete the tasks prescribed in Clauses 1 and 2 of this Article and report to the Ministry of Finance along with documents proving the completion of the tasks.

4. Within thirty days from the receipt of the report prescribed in Clause 3 of this Article, the Ministry of Finance shall issue the Decision to revoke the License for establishment and operation of the mutual organization providing micro-insurance and publish the Decision to revoke the License for establishment and operation on the Ministry of Finance's electronic portal.

Article 16. Procedure and formalities for revoking the License for establishment and operation in cases where mutual organizations providing micro-insurance cannot remedy violations

1. From the date when the suspension period specified in Clause 1, Article 13 of this Decree ends and the mutual organization providing micro-insurance has not remedied the violation situation, or from the date when the mutual organization providing micro-insurance reports to the Ministry of Finance about its inability to increase the number of members as prescribed in Clause 3, Article 32 of this Decree, the mutual organization providing micro-insurance must implement the following provisions:

a) Notify all participating micro-insurance members, individuals, and related organizations about the implementation of asset distribution before the revocation of the License for establishment and operation;

b) Establish a Liquidation Board to carry out asset distribution according to the priority order prescribed in Clause 2, Article 15 of this Decree.

2. The mutual organization providing micro-insurance must complete the tasks prescribed in Clause 1 of this Article and report to the Ministry of Finance along with supporting documents within 12 months from the end date of the suspension period specified in Clause 1, Article 13 of this Decree if the mutual organization providing micro-insurance has not remedied the violation situation; or within 12 months from the date when the mutual organization providing micro-insurance reports to the Ministry of Finance about its inability to increase the number of members as prescribed in Clause 3, Article 32 of this Decree.

3. Within 30 days from the receipt of the report prescribed in Clause 2 of this Article, the Ministry of Finance issues a Decision to revoke the License for establishment and operation of the mutual organization providing micro-insurance and publishes the Decision to revoke the License for establishment and operation on the Ministry of Finance's electronic portal.

Article 17. Procedure and formalities for revoking the License for establishment and operation in cases where mutual organizations providing micro-insurance voluntarily dissolve

1. A mutual organization providing micro-insurance can only be dissolved after fulfilling all obligations and having no disputes with participating micro-insurance members, employees, the State, and other related individuals and organizations.

2. A mutual organization providing micro-insurance that voluntarily dissolves must submit to the Ministry of Finance a dissolution application dossier including:

a) Application for dissolution of the mutual organization providing micro-insurance;

b) Minutes of meeting, Resolution of the Member Assembly (in case the founding member is an individual) or document of the competent authority according to the Charter of the Member Representative Organization (in case the founding member is a representative organization of members) regarding dissolution and dissolution plan;

c) Plan to fulfill obligations towards participating micro-insurance members, the State, employees, and other related organizations and individuals;

d) Plan to handle and distribute assets from micro-insurance activities to participating micro-insurance members.

3. Within 14 days from the date of receiving the complete dissolution application dossier of the mutual organization providing micro-insurance, the Ministry of Finance issues a document approving in principle the dissolution of the mutual organization providing micro-insurance. In case of non-approval, the Ministry of Finance will issue a document explaining the reasons.

4. After receiving the document approving in principle the dissolution, the mutual organization providing micro-insurance must implement the following provisions:

a) Not signing new or extending micro-insurance contracts;

b) Publish in five consecutive daily newspapers about the voluntary dissolution of the micro-insurance mutual organization;

c) Notify all participating micro-insurance members, individuals, and related organizations about the voluntary dissolution;

d) Establish a Liquidation Board to carry out asset distribution according to the handling and distribution plan reported to the Ministry of Finance.

5. Within 12 months from the date the Ministry of Finance approves in principle the dissolution, the mutual organization providing micro-insurance completes the fulfillment of obligations towards participating micro-insurance members, the State, employees, and other related organizations and individuals; handles and distributes assets according to the plan reported to the Ministry of Finance.

6. After completing all obligations towards participating micro-insurance members, employees, the State, and other related individuals and organizations, the mutual organization providing micro-insurance reports to the Ministry of Finance the results of implementation along with supporting documents proving the completion of all obligations.

7. Within seven days from the date of receiving the complete report on the fulfillment of obligations of the mutual organization providing micro-insurance, the Ministry of Finance issues a Decision to revoke the License for establishment and operation of the mutual organization providing micro-insurance and publishes the Decision on the Ministry of Finance's electronic portal.

Article 18. General provisions on files and documents

1. The files and documents specified in Clause 2, Article 10, Clause 2, Article 11, Clauses 2 and 3, Article 12, and Clause 2, Article 17 must comply with the following requirements:

a) Foreign documents bearing signatures, titles, and foreign seals of foreign organizations and individuals must be legalized according to the law within twelve months from the date of submission of the application file, except for the following documents: request for issuance of a License; certified copies of citizen identification cards or identity cards or passports or other lawful personal identification; documents issued by competent authorities of enterprises; power of attorney documents; commitment documents;

b) In cases where the file contains copies of documents, they must be copies from original registers or certified copies;

c) Documents drafted in a foreign language must be accompanied by a certified translation into Vietnamese by an authorized agency;

d) The criminal record form according to the prescribed model must be issued by the competent authority before the submission of the application file not more than twelve months prior, including complete information about criminal records and information about prohibitions on holding positions, establishing, and managing enterprises; cooperatives;

e) The curriculum vitae must be prepared not more than six months before the submission of the application file;

f) There must be a list of documents in the file;

2. Organizations and individuals participating in the preparation of files and documents shall bear legal responsibility for the accuracy, truthfulness, and completeness of the files and documents. In cases where organizations and individuals fraudulently forge documents proving eligibility for license issuance in the application file, the Ministry of Finance has the right to refuse to consider granting permission for establishment and operation of micro-insurance deployment for these organizations and individuals within five years from the date of discovery of fraudulent acts regarding the forgery of documents in the application file for license issuance;

3. When legal, identification, and residence documents of citizens included in the files stipulated in this Decree have been integrated into the National Population Database and the Citizen Identification Card Database, the Ministry of Finance shall be responsible for exploiting and using information from the National Population Database and the Citizen Identification Card Database based on information exchange and provision among state management agencies;

Section 2
ORGANIZATION OF OPERATIONS AND RISK MANAGEMENT

Article 19. Content of operations of mutual organizations providing micro-insurance

The content of operations of mutual organizations providing micro-insurance includes:

1. Providing micro-insurance products.

2. Investing operational capital, mandatory reserve funds, and idle funds from insurance business reserves.

Article 20. Organizational structure and management of mutual organizations providing micro-insurance

1. In cases where the founding members of mutual organizations providing micro-insurance are individuals as stipulated in Point a, Clause 1, Article 149 of the Insurance Business Law, the organizational structure of mutual organizations providing micro-insurance includes:

a) Members' Assembly;

b) Board of Directors;

c) General Director (Director);

d) Supervisory Board or Supervisor.

2. In cases where the founding members of mutual organizations providing micro-insurance are representative organizations of members as stipulated in Point b, Clause 1, Article 149 of the Insurance Business Law, the organizational structure of mutual organizations providing micro-insurance includes:

a) Representative Organization of Members;

b) Board of Directors;

c) General Director (Director);

d) Supervisory Board or Supervisor.

Article 21. Members' General Meeting.

1. For mutual organizations providing micro-insurance where founding members are individuals, the Members' General Meeting has the highest decision-making power of the mutual organization providing micro-insurance. The Members' General Meeting includes the Annual Members' General Meeting and the Extraordinary Members' General Meeting. The Members' General Meeting is held in the form of a full assembly.

2. The Annual Members' General Meeting convened by the Board of Directors must be held within three months from the end of the fiscal year to decide on the following matters:

a) Approving the report on the results of operations for the year of the mutual organization providing micro-insurance; reports on the activities of the Board of Directors, Management Board, and Supervisory Board or Supervisor;

b) Approving the plan and financial activities for the next year of the mutual organization providing micro-insurance;

c) Establishing reserves as prescribed by law; reducing insurance premiums for members in the next fiscal year at the proposal of the Board of Directors;

d) Deciding on additional capital raising;

đ) Electing and dismissing members of the Board of Directors and the Supervisory Board;

e) Dissolving the mutual organization providing micro-insurance;

g) Amending and supplementing the Charter of the mutual organization providing micro-insurance;

h) Remuneration for members of the Board of Directors, Management Board, Supervisory Board or Supervisor and other positions (if any) of the mutual organization providing micro-insurance;

i) Other issues proposed in writing by the Board of Directors or by at least one-third of the total number of members of the mutual organization providing micro-insurance.

The Members' General Meeting shall be conducted when at least 75% of the total number of members are present; if the number of members is insufficient, the meeting must be postponed. After thirty days from the first scheduled meeting date, the second Members' General Meeting shall be held with at least 50% of the total number of members present. If the second meeting does not meet the conditions for convening, the third meeting shall be held regardless of the number of attendees within twenty days from the second scheduled meeting date.

3. The Extraordinary Members' General Meeting shall be convened by the Board of Directors, Supervisory Board, or Supervisor, or by representatives of at least one-third of the total number of members of the mutual organization providing micro-insurance in the following cases:

a) Resolving issues exceeding the authority of the Board of Directors;

b) The Board of Directors cannot convene a regular meeting after two calls;

c) At the request of the Supervisory Board or Supervisor;

d) At the request of at least one-third of the total number of members.

Within fifteen days from the date of receiving the request of the Supervisory Board, Supervisor, or the request of at least one-third of the total number of members, the Board of Directors must convene the Extraordinary Members' General Meeting. In case the Board of Directors fails to convene the Extraordinary Members' General Meeting within the fifteen-day period, the Supervisory Board or Supervisor has the right to convene the Extraordinary Members' General Meeting.

Within fifteen days from the date the Supervisory Board or Supervisor has the right to convene but fails to convene the Extraordinary Members' General Meeting as stipulated in Clause 3 of this Article, the representative of at least one-third of the total number of members has the right to convene the meeting.

Article 22. Member Representative Organization

For mutual organizations providing micro-insurance where the founding members are member representative organizations, the member representative organization is the highest decision-making body of the mutual organization providing micro-insurance and has the authority to decide on the following matters:

1. Approving the annual activity report of the mutual organization providing micro-insurance; reports on the activities of the Board of Directors, Management Board, and Supervisory Board or Supervisor.

2. Approving the financial operation plan for the next year of the mutual organization providing micro-insurance.

3. Returning the initial capital supported from the member representative organization when the mutual organization providing micro-insurance has achieved significant results, has established and maintained a mandatory reserve fund not less than 50 billion VND as stipulated in Clause 2, Article 42 of this Decree.

4. Establishing funds as prescribed by law; reducing insurance fees for members in the next fiscal year at the proposal of the Board of Directors.

5. Deciding on additional capital raising.

6. Appointing and dismissing members of the Board of Directors and Supervisory Board.

7. Dissolving the mutual organization providing micro-insurance.

8. Amending and supplementing the Charter of the mutual organization providing micro-insurance.

9. Compensation for members of the Board of Directors, Management Board, Supervisory Board or Supervisor and other positions (if any) of the mutual organization providing micro-insurance.

10. Other issues proposed in writing by the Board of Directors or by at least one-third of the total number of members of the mutual organization providing micro-insurance.

Article 23. Board of Directors

1. The Board of Directors is the management body of the mutual organization providing micro-insurance, having full authority to act on behalf of the mutual organization providing micro-insurance to decide all matters related to the purpose and interests of the mutual organization providing micro-insurance, except those matters within the jurisdiction of the General Assembly of Members or the Member Representative Organization. The Board of Directors is elected by the General Assembly of Members (for mutual organizations providing micro-insurance founded by founding members) or appointed by the Member Representative Organization (for mutual organizations providing micro-insurance established by the Member Representative Organization).

2. The Board of Directors convenes at least twice a year, performing the following rights and duties:

a) Deciding on the development strategy of the mutual organization providing micro-insurance;

b) Recommending to the General Assembly of Members or the Member Representative Organization to decide on increasing or decreasing insurance fees for members in the next fiscal year; deciding or handling losses arising during the course of operations;

c) Decide on investment plans;

d) Deciding on solutions for developing activities and technology; approving contracts with a value equal to or greater than 50% of the total asset value recorded in the accounting books of the mutual organization providing micro-insurance or another ratio smaller as specified in the Charter of the mutual organization providing micro-insurance;

đ) Appointing, dismissing, and removing the position of General Director (Director) and other important managerial staff of the mutual organization providing micro-insurance; determining their salaries and other benefits;

e) Deciding on the organizational structure and internal management regulations of the mutual organization providing micro-insurance;

g) Submitting the annual financial settlement report to the General Assembly of Members, the Member Representative Organization;

h) Approving the program and content of documents serving the General Assembly of Members meetings, convening the General Assembly of Members meetings or implementing procedures to seek opinions for the General Assembly of Members to approve decisions;

i) Other rights and duties as prescribed by law and the Charter of the mutual organization providing micro-insurance.

Article 24. Chairman of the Board of Directors, General Director or Director

1. The legal representative of a micro-insurance mutual support organization shall be the Chairman of the Board of Directors or the General Director or the Director. In cases where the Charter of the micro-insurance mutual support organization does not specify, the legal representative shall be the General Director or the Director.

2. The General Director or the Director shall manage the daily operations of the micro-insurance mutual support organization and shall be responsible to the Board of Directors for the performance of assigned tasks.

3. The Chairman of the Board of Directors, the General Director or the Director must meet the following general criteria:

a) Not being a person currently under criminal prosecution or a person convicted but not yet rehabilitated according to the provisions;

b) Holding a bachelor's degree or higher in insurance, finance, banking. In cases where a bachelor's degree or higher is held in another field, they must have a certificate in insurance training issued by insurance training institutions established and operating legally within or outside the country;

c) In addition to the criteria specified in points a and b of this clause, the General Director or the Director of a micro-insurance mutual support organization must have at least three years of work experience in the insurance sector.

Article 25. Criteria and Conditions for Insurance Actuary for Micro-insurance

1. The Insurance Actuary for Micro-insurance must meet the following criteria and conditions:

a) Not being a person currently under criminal prosecution or a person convicted but not yet rehabilitated according to the provisions;

b) Being an Associate member of the Institute of Actuaries that is a full member of the International Actuaries Association or having a minimum of five years of work experience in the insurance sector and holding a certificate proving successful completion of at least two exams (exams) from one of the following Institutes: The Institute and Faculty of Actuaries in the United Kingdom, the Society of Actuaries in the United States, the Institute of Actuaries of Australia, the Canadian Institute of Actuaries, or having successfully completed courses or programs recognized by these Institutes as equivalent to two exams of the Institute.

Five years after the effective date of this Decree, the Insurance Actuary for Micro-insurance must be at least an Associate member of the Institute of Actuaries that is a full member of the International Actuaries Association.

2. A micro-insurance mutual support organization may employ an Insurance Actuary for Micro-insurance in the following forms:

a) Signing a labor contract with the Insurance Actuary for Micro-insurance;

b) Reaching an agreement to enter into an outsourcing contract with other organizations or individuals to perform the tasks of the Insurance Actuary for Micro-insurance as stipulated in Clause 3 of this Article. In this case, the micro-insurance mutual support organization still bears ultimate and sole responsibility for the participating members.

3. A micro-insurance mutual support organization must use actuaries who meet the criteria and conditions stipulated in Clause 1 of this Article to perform the following tasks:

a) Calculating insurance premiums; annually assessing the difference between premium assumptions and actual implementation of each product, recalculating and adjusting premiums for the next year, and formulating plans for using results;

b) Calculating the establishment of business reserves in accordance with the provisions of the law;

c) Periodically reporting in writing every quarter and annually to the Board of Directors, General Director (Director) on the financial status, investment activity situation of the micro-insurance mutual support organization, including emerging risks and proposals regarding investment assets, investment terms corresponding to the investment term of each type of asset guaranteeing the commitments made under insurance contracts;

d) Promptly reporting in writing to the General Director (Director), the Board of Directors about any unusual issues that could adversely affect the financial situation of the micro-insurance mutual support organization and proposing remedial measures;

đ) Evaluating reinsurance programs and reinsurance contracts (if any) before submitting them to the General Director (Director), the Board of Directors for approval;

e) Reporting to the Ministry of Finance annually on matters related to their responsibilities according to Model No. 11 prescribed in the Appendix attached to this Decree, within the latest deadline of ninety days from the end of the fiscal year;

g) Other tasks to ensure financial safety for the micro-insurance mutual support organization.

Article 26. Risk Management

1. Mutual organizations providing micro-insurance must establish a Supervisory Board or designate a Supervisor in accordance with the provisions of Article 27 of this Decree.

2. Mutual organizations providing micro-insurance must develop and implement internal responsibility allocation regulations; product research and development, exploitation, assessment, compensation, reinsurance procedures, and other business procedures.

3. Mutual organizations providing micro-insurance must regularly inspect and supervise compliance with laws, business procedures, and internal regulations. Inspection and supervision activities must be independent from insurance business operations and ensure timely identification of all risks that may adversely affect the effectiveness and objectives of mutual organizations providing micro-insurance, promptly reporting to the competent authority of the mutual organization for appropriate measures.

4. The results of inspection and supervision must be documented and retained at the mutual organization providing micro-insurance.

Article 27. Supervisory Board, Supervisor

1. The Supervisory Board, Supervisor shall be elected by the Member Assembly (in cases where the mutual organization has individual founding members) or designated by the Member Representative Organization (in cases where the mutual organization has organizational founding members).

2. The Supervisory Board, Supervisor operates independently, is responsible to the Member Assembly or the Member Representative Organization, and performs the following rights and duties:

a) Checking the reasonableness and legality in management and operation, in accounting records and financial reports of the mutual organization providing micro-insurance;

b) Reviewing the annual financial report of the mutual organization providing micro-insurance;

c) Reporting to the Member Assembly on the accuracy, truthfulness, and legality of recording, retaining documentation, and preparing accounting books, financial reports, and other reports of the mutual organization providing micro-insurance; truthfulness and legality in management and operation of the mutual organization providing micro-insurance;

d) Recommending supplementary, amendment, and improvement measures for the organizational structure of management and operation of the mutual organization providing micro-insurance;

đ) Other rights and duties as stipulated in the Charter of the mutual organization providing micro-insurance. hỗ trợ cung cấp bảo hiểm vi mô.

The implementation of the contents prescribed in points a and b of this clause shall not obstruct the normal operation of the Board of Directors, nor cause disruption in daily management of the mutual organization providing micro-insurance.

3. Members of the Supervisory Board, Supervisor shall not concurrently be members of the Board of Directors, General Director (Director), Chief Accountant, cashier, and shall not be the biological or adoptive parents, spouse, children, adopted children, siblings of members of the Board of Directors, or other members of the Supervisory Board (in cases where the Supervisory Board is established).

Section 3
BUSINESS OPERATIONS

Article 28. Distribution of Micro-Insurance Products

1. Mutual organizations providing micro-insurance may distribute micro-insurance products through the following organizations and individuals:

a) Members participating in micro-insurance;

b) Insurance agents.

2. Members participating in micro-insurance who provide advice on micro-insurance products and assist in concluding micro-insurance contracts must undergo at least 14 hours of training annually on micro-insurance products before performing such tasks. The mutual organization providing micro-insurance is responsible for training these members.

3. Insurance agents providing micro-insurance must hold one of the following types of insurance agent certificates:

a) Basic life insurance agent certificate;

b) Health insurance agent certificate;

c) Basic non-life insurance agent certificate (applicable only to insurance agents providing micro-insurance products with property insurance benefits).

Article 29. Contents of Micro Insurance Contracts

The contents of micro insurance contracts must include at least the following:

1. Participants in micro insurance, beneficiaries (if any).

2. Insured object.

3. Insurance amount or value of the insured asset.

4. Scope or insurance benefits, rules, conditions, and terms of insurance.

5. Insurance period, effective date of the insurance contract.

6. Premium rate, payment method, and premium payment schedule.

7. Method of indemnity or payment of insurance money.

8. Rights and obligations of the mutual organization providing micro insurance as prescribed by law.

9. Rights and obligations of participants in micro insurance as prescribed by law.

Article 30. Rights and Obligations of Mutual Organizations Providing Micro Insurance

1. Mutual organizations providing micro insurance have the right to:

a) Collect premiums according to the agreement in the micro insurance contract;

b) Request participants in micro insurance to provide complete and truthful information related to the conclusion and performance of the micro insurance contract;

c) Refuse to pay insurance money to the beneficiary or refuse to indemnify the insured person if it is found that the participant in micro insurance intentionally provides false information which directly relates to the insured event;

d) Refuse to pay insurance money to the beneficiary or refuse to indemnify the insured person if the event does not fall within the scope of insurance or excluded liability as agreed upon in the micro insurance contract;

đ) Other rights as prescribed by law, agreed upon in the micro insurance contract, and stipulated in the Charter of the mutual organization providing micro insurance.

2. Mutual organizations providing micro insurance have the obligation to:

a) Provide and explain fully and accurately about the rules, conditions, and terms of micro insurance products to participants in micro insurance; rights and obligations of participants in micro insurance;

b) Pay insurance money promptly to the beneficiary or indemnify the insured person when an insured event occurs;

c) Monitor, compare, and confirm consistent information with participants in micro insurance regarding the micro insurance product they have participated in, the amount of premiums paid, and the payment periods, the amount of insurance money to be paid out;

d) Announce to participants in micro insurance the results of micro insurance operations annually, plans for using the results of micro insurance operations.

đ) Other obligations as prescribed by law, agreed upon in the micro insurance contract, and stipulated in the Charter of the mutual organization providing micro insurance.

Article 31. Rights and Obligations of Participants in Micro Insurance

1. Participants in micro insurance have the following rights:

a) To enjoy the benefits under the micro insurance contract concluded with the mutual organization providing micro insurance;

b) To enjoy the results of the operations of the mutual organization providing micro insurance as stipulated in the Charter of the mutual organization providing micro insurance;

c) Equality and equal voting rights regardless of the amount of premiums paid in deciding on the organization, management, and operation of the mutual organization providing micro insurance; to be provided with full, timely, and accurate information about the activities of the organization, the use of the results of the organization's operations (in cases where the results of operations are large), and other contents as stipulated in the Charter of the mutual organization providing micro insurance;

d) Attend or authorize another person to attend the General Meeting of Members of the mutual organization providing micro insurance;

đ) To receive a corresponding portion of the remaining assets when the mutual organization providing micro insurance is dissolved;

e) Other rights as prescribed by law, agreed upon in the micro insurance contract, and stipulated in the Charter of the mutual organization providing micro insurance.

2. Participants in micro insurance have the following obligations:

a) To pay premiums fully according to the agreed time and method in the micro insurance contract;

b) To comply with the Charter, internal regulations, and operational rules of the mutual organization providing micro insurance and resolutions passed at the General Meeting of Members;

c) To bear responsibility for debts and losses of the mutual organization providing micro insurance within the scope of the premiums paid to the mutual organization providing micro insurance;

d) Other obligations as prescribed by law, agreed upon in the micro insurance contract, and stipulated in the Charter of the mutual organization providing micro insurance.

Article 32. Number of Members Participating in Microinsurance

1. Within six months from the date of issuance of the License for Establishment and Operation, the mutual organization providing microinsurance must ensure that it maintains at least 1,000 members participating in microinsurance continuously.

2. In case the number of members of the mutual organization providing microinsurance falls below the minimum number specified in Clause 1 of this Article for a continuous period of six months, the mutual organization providing microinsurance must immediately report to the Ministry of Finance on the current situation, reasons, and remediation plans, including the deadline for implementing the remediation plan.

3. Within six months from the date of reporting as stipulated in Clause 2 of this Article, if the mutual organization providing microinsurance cannot increase the number of members according to the remediation plan reported to the Ministry of Finance, the Ministry of Finance shall revoke the License for Establishment and Operation of the mutual organization providing microinsurance. The revocation of the License for Establishment and Operation shall be carried out in accordance with Articles 14 and 16 of this Decree.

Article 33. Termination of Membership Status in Mutual Organizations Providing Microinsurance

1. The membership status in mutual organizations providing microinsurance terminates under one of the following circumstances:

a) The insurance contract between the member and the mutual organization providing microinsurance terminates or is transferred in accordance with the provisions of the law;

b) The member of the mutual organization providing microinsurance is an individual who has died;

c) The mutual organization providing microinsurance is dissolved;

d) Other cases prescribed by the Charter of the mutual organization providing microinsurance.

2. Unless otherwise provided in the Charter of the mutual organization providing microinsurance or the microinsurance contract, founding members may not unilaterally terminate their membership status within three years from the date the mutual organization providing microinsurance was issued the License for Establishment and Operation.

3. The resolution of rights and obligations towards members in the cases stipulated in Clause 1 of this Article shall be implemented in accordance with the Charter of the mutual organization providing microinsurance, the insurance contracts concluded with the mutual organization providing microinsurance, and relevant legal provisions.

Article 34. Business Reports

1. Not later than thirty days from the end of each quarter and ninety days from the end of the fiscal year, the mutual organization providing microinsurance shall prepare and submit to the Ministry of Finance quarterly and annual business reports in accordance with Forms 07 to 10 attached to this Decree.

2. The reports stipulated in Clause 1 of this Article shall be submitted directly, through postal service, or online in accordance with the guidelines of the Ministry of Finance.

3. In addition to the reports stipulated in Clause 1 of this Article, the Ministry of Finance may request the mutual organization providing microinsurance to provide additional reports on its operational and financial conditions to serve management, supervision, statistical analysis, and market assessment.

Article 35. Reinsurance

1. The mutual organization providing microinsurance may transfer part of the insurance liability accepted in an insurance contract to one or more domestic or foreign insurance companies or reinsurance companies.

2. The reinsured company must meet the following requirements:

a) Legally operating and fully meeting the solvency requirements as prescribed by law;

b) Foreign insurance companies or reinsurance companies accepting reinsurance of ten percent or more of the insurance liability of a single microinsurance contract must have a minimum rating of "BBB" by Standard & Poor's or Fitch, "B++" by A.M. Best, "Ba1" by Moody's, or equivalent ratings by other rating organizations with rating functions and experience in the most recent fiscal year compared to the time of entering into the reinsurance contract.

3. The mutual organization providing microinsurance bears sole responsibility towards the members participating in microinsurance according to the microinsurance contract, even in the event of reinsurance of accepted insurance liabilities. The mutual organization providing microinsurance may not refuse or delay the fulfillment of its responsibilities towards the members participating in microinsurance, even if the reinsured company fails to fulfill its obligation to pay reinsurance for the accepted liabilities under the reinsurance contract.

Section 4
PROVISIONS ON FINANCIAL REGIME, ACCOUNTING RECORDS,
PUBLIC INFORMATION DISCLOSURE AND FINANCIAL REPORTING

Article 36. Management of Operating Capital of Microinsurance Mutual Organizations

1. The operating capital of microinsurance mutual organizations includes:

a) Initial capital;

b) Compulsory reserve fund;

c) Undistributed operating results.

2. Throughout its operation, the microinsurance mutual organization must ensure that its operating capital does not fall below the minimum initial capital level prescribed in Clause 1, Article 7 of this Decree.

3. The microinsurance mutual organization must regularly review its operating capital. In cases where the operating capital does not meet the requirements stipulated in Clause 2 of this Article, the microinsurance mutual organization must immediately report to the Ministry of Finance a plan and timeline for increasing the initial capital. Increasing the initial capital must comply with the following principles:

a) The increase in initial capital shall be made in Vietnamese Dong;

b) It is not allowed to use borrowed funds or entrusted investment capital from other organizations or individuals to supplement the initial capital;

c) Sources of increased initial capital include those specified in Clause 1, Article 7 of this Decree.

4. Six months after reporting to the Ministry of Finance as prescribed in Clause 3 of this Article, if the microinsurance mutual organization cannot increase its initial capital according to the reported plan, the Ministry of Finance will suspend operations of the microinsurance mutual organization pursuant to Article 13 of this Decree.

5. The microinsurance mutual organization shall implement investments in initial capital and compulsory reserve fund in accordance with Article 39 of this Decree.

Article 37. Deposit Guarantee

1. The microinsurance mutual organization must use part of its initial capital to deposit as a guarantee at a commercial bank operating in Vietnam (excluding banks placed under special supervision).

2. The amount of the deposit guarantee equals 10% of the minimum initial capital as prescribed in Clause 1, Article 7 of this Decree. This amount must be maintained throughout the period of operation of the microinsurance mutual organization.

3. During the course of operation, the microinsurance mutual organization may only use the deposit guarantee to fulfill commitments to participating members when the business reserve is insufficient to pay insurance benefits. Within 90 days from the date of using the deposit guarantee, the microinsurance mutual organization is responsible for replenishing the full amount of the deposit guarantee used.

4. When implementing asset distribution according to the procedure for revoking the License for Establishment and Operation as prescribed in Articles 15, 16, and 17 of this Decree, the microinsurance mutual organization may withdraw the entire deposit guarantee based on the Decision of the Liquidation Council.

Article 38. Insurance Business Reserve

The microinsurance mutual organization must establish an insurance business reserve to settle pre-determined and emerging insurance liabilities from concluded microinsurance contracts.

Monthly, the microinsurance mutual organization must review and establish the insurance business reserve according to the following guidelines:

1. Unearned premium reserve: Used to pay insurance money or compensation for liabilities that will arise during the remaining validity period of the microinsurance contract. The microinsurance mutual organization may choose one of the following methods to establish the unearned premium reserve:

a) Percentage method of total insurance premiums: The unearned premium reserve is 50% of the total premiums of microinsurance contracts concluded in the fiscal year and still valid at the time of establishing the business reserve.

b) One-eighth method of the term of the microinsurance contract (for annual premium payments): This method assumes that premiums from microinsurance contracts issued by the microinsurance mutual organization in a quarter are effective halfway through that quarter and remain valid at the time of calculating the reserve. The unearned premium reserve is calculated according to the following formula:

Example: The unearned premium reserve at the end of December X is calculated as follows for microinsurance contracts with a one-year term and still valid on December 31, X:

c) One-twenty-fourth method of the term of the microinsurance contract (for annual premium payments): This method assumes that premiums from microinsurance contracts issued by the microinsurance mutual organization in a month are effective halfway through that month and remain valid at the time of calculating the reserve. The unearned premium reserve is calculated according to the following formula:

Example: The unearned premium reserve at the end of December X is calculated as follows for microinsurance contracts with a one-year term and still valid on December 31, X:

d) Daily unearned premium reserve calculation method: This method can be applied to calculate the unearned premium reserve for microinsurance contracts of any duration according to the general formula below:

đ) For cases of non-periodic insurance premium payments, the unearned premium reserve is established at 50% of the total premiums collected in the period.

2. Claims reserve:

a) Reserve for claims for payment of insurance money or compensation within insurance liability but not yet resolved: Established by the total amount of insurance money that may have to be paid for each case that has been notified or requested payment of insurance money or compensation but has not been settled by the end of the reserve establishment period.

b) Reserve for losses within insurance liability but not yet reported or requested payment of insurance money or compensation: Established at 3% of the total premiums collected in the fiscal year.

3. Balance assurance reserve: The level of establishment is 1% of the pre-tax operating result (if any), established annually until this reserve equals 5% of the premiums collected in the fiscal year of the microinsurance mutual organization.

Article 39. Financial Investment

1. The investment of capital for establishment, mandatory reserve fund as stipulated in points a and b, Clause 1, Article 36 of this Decree; and the idle capital from operational reserves for micro-insurance as provided in Clause 2 of this Article must ensure safety, efficiency, and meet the requirements for regular payment under micro-insurance contracts.

2. Idle capital from operational reserves

a) Micro-insurance mutual organizations must maintain a sum of money to pay insurance benefits or compensation regularly during the period not less than 25% of the total operational reserve for insurance and deposit it in the form of time deposits for up to one year at commercial banks operating in Vietnam (excluding those banks placed under special control).

b) Idle capital from operational reserves for insurance is the total operational reserve for insurance minus the sums of money used to pay insurance benefits or compensation regularly during the period as stipulated in point a of this clause.

3. Capital for establishment, mandatory reserve fund, and idle capital from operational reserves for insurance of micro-insurance mutual organizations can only be invested in Vietnam in the following areas:

a) Purchasing government bonds with a term of less than five years;

b) Depositing funds at commercial banks operating in Vietnam (excluding those banks placed under special control).

4. Micro-insurance mutual organizations must issue, implement, and monitor the implementation of investment regulations and procedures.

Article 40. Revenue of Micro-Insurance Mutual Organizations

The revenue of micro-insurance mutual organizations is the amount receivable generated during the period including:

1. Revenue from the operation of micro-insurance products: Is the amount receivable generated during the period after deducting the amounts payable to reduce receivables generated during the period. Among which:

a) The amount receivable generated during the period includes: Premium income; Commission income from reinsurance cessions (if any); Third-party reimbursement income.

b) The amounts payable to reduce receivables generated during the period include: Refund of premiums; Reinsurance fees; Refund of reinsurance commission; Reduction of reinsurance commission.

2. Income from investment activities.

3. Other lawful income (if any).

Article 41. Expenses of Micro-Insurance Mutual Organizations

The expenses of micro-insurance mutual organizations are the amounts payable and provisions made during the period including:

1. Expenses for the operation of micro-insurance product deployment: Is the amount payable and provisions made during the period after deducting the amounts receivable to reduce expenses generated during the period. Among which:

a) The amounts payable and provisions made during the period include: Insurance indemnity or payment; Establishment of operational reserve; Insurance commission expense; Expense for distribution of micro-insurance products; Loss assessment expense; Expense for prevention and limitation of risks and losses; Risk assessment expense of insured objects; Insurance appraisal expense; Expense for research, design, and development of products; Expense for building and improving information technology systems serving the management of micro-insurance contracts, financial accounting for micro-insurance operations; Training and promotion expense for micro-insurance; Salary, travel allowance, social insurance, unemployment insurance, health insurance, and allowances for the management board and staff responsible for micro-insurance operations; Office rental expense (if any); Expense for purchasing, repairing office supplies, assets serving micro-insurance operations, and outsourced services supporting micro-insurance operations.

b) The amounts receivable to reduce expenses generated during the period include: Reimbursement from reinsurers.

2. Expenses for investment activities.

3. Other lawful expenses (if any).

Article 42. Results of Operations

The results of operations of a mutual organization providing microinsurance are determined as the difference between total revenue minus total expenses for the fiscal year (including financial obligations to the State) as prescribed by law.

In cases where the results of operations exceed zero, after fulfilling all financial obligations to the State, the mutual organization providing microinsurance must comply with the following provisions:

1. Set aside 10% of post-tax operating results (if any) to establish a mandatory reserve fund. The maximum level of the mandatory reserve fund is 50 billion VND;

2. After establishing the mandatory reserve fund, the mutual organization providing microinsurance shall use the remaining portion of the operating results to implement the following items:

a) Supplementing operational capital;

b) Repaying the founding capital supported from member representative organizations without interest. Such repayment can only be made when the mutual organization providing microinsurance has established and maintained a mandatory reserve fund not less than 50 billion VND;

c) Serving as a basis for reducing insurance premiums or increasing insurance amounts, supplementing insurance benefits for members participating in microinsurance in the subsequent fiscal year;

d) Other purposes as stipulated in the Charter of the mutual organization providing microinsurance.

Article 43. Accounting System and Fiscal Year

1. The Ministry of Finance shall provide guidance on implementing the accounting system for mutual organizations. hỗ trợ cung cấp bảo hiểm vi mô.

2. The fiscal year of a mutual organization providing microinsurance begins on January 1 and ends on December 31 of the same calendar year.

3. Within thirty days from the end of each quarter, the mutual organization providing microinsurance shall prepare and submit to the Ministry of Finance quarterly financial reports.

4. Within ninety days from the end of the fiscal year, the mutual organization providing microinsurance shall settle its accounts, prepare and submit to the Ministry of Finance audited financial reports by an independent auditing organization as prescribed by law.

Article 44. Obligation to Publicize Information

1. A mutual organization providing microinsurance shall have the obligation to publicize information as prescribed in Article 45 of this Decree to members participating in microinsurance.

2. A mutual organization providing microinsurance shall have the obligation to publish necessary information on the electronic information website of the mutual organization providing microinsurance or directly send such information to members participating in microinsurance. The publicizing of information must ensure accuracy, timeliness, completeness, and ease of tracking.

3. The deadline for publicizing information shall be implemented according to the following provisions:

a) For information prescribed in Clause 1 and Clause 2 of Article 45 of this Decree: Publicize within seven working days from the date of occurrence of any event related to the information that needs to be publicized;

b) For information prescribed in Clause 3 of Article 45 of this Decree: Publicize within seven working days from the date of expiration of the reporting period as prescribed in Clause 4 of Article 43 of this Decree;

c) For information prescribed in Clause 4 of Article 45 of this Decree: Publicize within three working days from the date of occurrence of any event related to the information that needs to be publicized.

Article 45. Content for Public Disclosure of Information

1. Information related to licensing, organization, and personnel of microinsurance mutual organizations, including:

a) Information in the License for Establishment and Operation; Amended License;

b) Information on the appointment and change of the Chairman of the Board of Directors, General Director (Director), legal representative, and Microinsurance Actuary;

c) Head office address;

d) Hotline.

2. Information regarding microinsurance business activities includes:

a) Rules, terms, and premium rates of each microinsurance product provided by the microinsurance mutual organization;

b) Procedures, application files, and deadlines for claims settlement and insurance payment;

c) Investment management objectives and policies.

3. Annual financial reports that have been audited.

4. Abnormal information related to:

a) Suspension of operations and revocation of the License for Establishment and Operation of the microinsurance mutual organization;

b) Administrative penalty decisions concerning the implementation of microinsurance.

Chapter IV

IMPLEMENTING PROVISIONS

Article 46. Effective Date

1. This Decree takes effect from May 5, 2023.

2. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairpersons of provincial and municipal People's Committees directly under the central government, and entities subject to this Decree shall be responsible for its implementation.