Circular No. 31/2004/TT-BTC guiding the implementation of Decree No. 118/2003/NĐ-CP dated October 13, 2003 of the Government on administrative penalties for violations in the insurance business sector.

 

CIRCULAR

Guidelines for implementing Decree No. 118/2003/NĐ-CP dated October 13, 2003 of the Government on administrative penalties in the field of insurance business

Pursuant to the Law on Insurance Business No. 24/2001/QH10 dated December 9, 2000 and related guiding documents;
Pursuant to the Administrative Violation Handling Ordinance dated July 2, 2002;
Pursuant to Decree No. 134/2003/NĐ-CP dated November 14, 2003 of the Government detailing implementation of certain provisions of the Administrative Violation Handling Ordinance 2002;
BASED ON 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;
Pursuant to Decree No. 118/2003/NĐ-CP dated October 13, 2003 of the Government on administrative penalties in the field of insurance business;
The Ministry of Finance hereby provides guidance as follows:

I. GENERAL PROVISIONS

1. Scope of Application

1.1. Administrative penalties in the field of insurance business shall be applied to individuals, agencies, organizations (hereinafter referred to collectively as "individuals, organizations") who intentionally or negligently violate regulations on insurance business activities that are not criminal offenses and must be subject to administrative penalties according to the law.

1.2. These Circular applies to:

a) Individuals, organizations that commit administrative violations in the field of insurance business as stipulated in Chapter II of Decree No. 118/2003/NĐ-CP dated October 13, 2003 (referred to as Decree No. 118/2003/NĐ-CP).

b) Foreign individuals, organizations operating within the territory of Vietnam that commit administrative violations in the field of insurance business as stipulated in Decree No. 118/2003/NĐ-CP, except where international treaties to which Vietnam is a party provide otherwise.

2. Administrative penalties in the field of insurance business must comply with general provisions on administrative penalties set forth in the Administrative Violation Handling Ordinance dated July 2, 2002 (referred to as the Ordinance), Decree No. 134/2003/NĐ-CP dated November 14, 2003 of the Government detailing implementation of certain provisions of the Administrative Violation Handling Ordinance 2002 (referred to as Decree No. 134/2003/NĐ-CP), and relevant laws.

3. In cases where the violation has characteristics indicative of a crime, the authority responsible for imposing administrative penalties shall prepare a file and transfer it to the competent authority for investigation and resolution in accordance with the law.

4. Administrative penalty fines collected from violations in the field of insurance business must be deposited into the state budget through an account opened at the State Treasury. The management system for fine receipts and payment procedures shall be carried out in accordance with current legal regulations.

II. PRINCIPLES FOR DETERMINING AUTHORITY TO IMPOSE PENALTIES

1. Only those persons authorized to impose administrative penalties as specified in Article 25 of Decree No. 118/2003/NĐ-CP have the authority to issue decisions on administrative penalties in the field of insurance business, within the scope of their authority regarding form and level of penalty. It is not permitted to divide one violation into several minor violations or combine several minor violations into one major violation in order to change the authority to impose penalties.

2. During inspection and supervision, if violations in the field of insurance business are discovered but fall outside the authority's jurisdiction to impose penalties, the competent authorities must transfer the violation files to the person authorized to impose administrative penalties in the field of insurance business for consideration and imposition of penalties in accordance with Decree No. 118/2003/NĐ-CP.

3. In cases where the administrative violation falls under the authority to impose penalties of multiple persons, the first person to handle the case will issue the penalty decision.

4. In cases where the administrative violations fall under the authority to impose penalties of one person, that person will issue a single penalty decision, but must clearly record each violation, the form and level of penalty for each violation.

5. In cases where one of the violations may be handled according to a form and level of penalty that does not fall within or exceeds the authority of the person imposing the penalty, that person must transfer the entire file to a higher authority for review and decision within fifteen working days from the date of issuance of the administrative violation record.

6. The authority to impose penalties of the Chairman of the Provincial People's Committee, the Chairman of the District People's Committee, and the Director of the Financial Inspection Department over administrative violations in the field of insurance business as stipulated in Article 25 of Decree No. 118/2003/NĐ-CP is specifically defined as follows:

6.1. The Chairman of the Provincial People's Committee has the right:

a) To issue warnings;

b) To impose fines up to seventy million dong;

c) To apply remedial measures prescribed in Clause 6, Article 5, Clause 4, Article 6, Point a, Clause 3, Article 8, Point a, Clause 2, Article 9, Point a, Clause 2, Article 10, Point a, Clause 2, Article 11, Clause 3, Article 15, Point a, Clause 2, Article 17, Clause 2, Article 18 of Decree No. 118/2003/NĐ-CP.

6.2. The Chairman of the District People's Committee has the right:

a) To issue warnings;

b) To impose fines up to twenty million dong.

c) To apply remedial measures prescribed in Clause 6, Article 5, Clause 4, Article 6, Point a, Clause 3, Article 8, Point a, Clause 2, Article 9, Point a, Clause 2, Article 10, Point a, Clause 2, Article 11, Clause 3, Article 15, Point a, Clause 2, Article 17, Clause 2, Article 18 of Decree No. 118/2003/NĐ-CP.

6.3. The Director of the Financial Inspection Department has the right:

a) To issue warnings;

b) To impose fines up to twenty million dong.

c) To apply remedial measures prescribed in Clause 6, Article 5, Clause 4, Article 6, Point a, Clause 3, Article 8, Point a, Clause 2, Article 9, Point a, Clause 2, Article 10, Point a, Clause 2, Article 11, Clause 3, Article 15, Point a, Clause 2, Article 17, Clause 2, Article 18 of Decree No. 118/2003/NĐ-CP.

III. APPLICATION OF PENALTY FORMS

1. The person issuing the penalty decision must base the application of appropriate forms of punishment on the degree and nature of the violation as stipulated in Chapter II of Decree No. 118/2003/NĐ-CP.

2. The application of monetary penalties, including when applying mitigating or aggravating circumstances, must not be lower than or exceed the prescribed monetary penalty range.

3. The specific amount of the monetary penalty is determined by the authority authorized to impose penalties in each case based on the monetary penalty range prescribed in Decree No. 118/2003/NĐ-CP, the nature and degree of the violation, and the subject committing the violation.

4. The minimum level of the monetary penalty range is applied to the first administrative violation committed negligently and with mitigating circumstances as stipulated in Article 8 of the Ordinance.

5. Determining the middle level of the monetary penalty range is carried out in accordance with Article 24 of Decree No. 134/2003/NĐ-CP.

6. The maximum level of the monetary penalty range is applied to violations with multiple aggravating circumstances as stipulated in Article 9 of the Ordinance.

7. Only one of the two main forms of administrative penalty, namely warning or fine, may be applied to a single act of administrative violation.

8. Supplementary forms of administrative penalty shall not be applied independently but must be applied together with a main form of administrative penalty.

IV. PROCEDURES FOR ADMINISTRATIVE PENALTIES

1. The procedures for imposing administrative penalties in the insurance business sector shall be carried out in accordance with the provisions of Chapter IV of Decree No. 134/2003/ND-CP. The models of inspection reports and decisions used in imposing administrative penalties in the insurance business sector are issued together with this Circular.

2. Due to the special nature of insurance business activities:

2.1. The simplified procedure prescribed in Article 54 of the Ordinance and Article 19 of Decree No. 134/2003/ND-CP will not apply to acts of administrative violations in the insurance business sector. All cases of administrative penalties in the insurance business sector must be based on the administrative violation report established by the competent authority and person in charge according to the content and form prescribed by law.

2.2. The time limit for issuing decisions on administrative penalties in the insurance business sector shall be implemented in accordance with the provisions of Clause 2, Clause 3, Clause 4, and Clause 5, Article 21 of Decree No. 134/2003/ND-CP.

3. The enforcement of decisions on administrative penalties shall be carried out in accordance with the provisions of Article 66 and Article 67 of the Ordinance.

V. VIOLATIONS

Some violations stipulated in Decree No. 118/2003/ND-CP are specifically guided as follows:

1. Violations concerning the management and use of licenses for establishment and operation, representative office licenses (hereinafter referred to as "licenses"), as prescribed in Article 5 of Decree No. 118/2003/ND-CP.

1.1. Failure to publish or publishing false information about the scope of operations as prescribed by relevant laws refers to the failure of insurance companies and insurance brokerage companies to comply with the regulations on publishing major contents of the license in newspapers as prescribed in Clause 2, Article 8 of Government Decree No. 42/2001/ND-CP dated August 1, 2001 detailing the implementation of certain provisions of the Insurance Business Law.

1.2. Not operating within twelve months from the date of issuance of the license refers to the situation where an insurance company does not conduct any activity specified in Clause 1, Article 60 of the Insurance Business Law; an insurance brokerage company does not conduct any activity specified in Article 90 of the Insurance Business Law.

1.3. Delaying the publication of changes beyond the prescribed period refers to the situation where, thirty days after the Ministry of Finance's approval of changes, the insurance company has not yet published the approved changes as required by law.

1.4. Operating or conducting activities not in accordance with the contents stated in the license refers to the situation where insurance companies, insurance brokerage companies, representative offices of foreign insurance companies, and foreign insurance brokerage companies operate contrary to or outside the contents specified in their licenses regarding the scope of business, permitted business activities, operational areas, customer targets, and duration of operation.

1.5. Accepting insurance brokerage services provided by foreign insurance brokerage companies that are not allowed to operate in Vietnam refers to the situation where domestic insurance companies accept insurance brokerage services for risks arising in Vietnam from foreign insurance brokerage companies with headquarters abroad and not permitted to engage in business in Vietnam.

2. Illegal promotional activities as prescribed in Point c, Clause 1, Article 10 of Decree No. 118/2003/ND-CP refer to the use of promotional methods prohibited by the Trade Law and other legal documents, including:

a) Promoting insurance products that have not been registered or approved by the Ministry of Finance;

b) Promoting insurance services in a misleading manner to deceive customers;

c) Promoting activities that affect the environmental landscape;

d) Promising gifts or prizes but failing to fulfill them or fulfilling them incorrectly;

đ) Other promotional methods prohibited by law.

3. Forcing the conclusion of insurance contracts against the law as prescribed in Article 11 of Decree No. 118/2003/ND-CP refers to the use of influence, administrative measures, or other coercive methods by agencies, organizations, enterprises, and individuals to compel persons seeking insurance to participate in insurance at a specific insurance company, or to compel insurance companies to accept insurance brokerage services or reinsurance brokerage services against their wishes.

4. Fraudulent behavior in participating in insurance, claiming insurance compensation, paying insurance benefits, and resolving insurance complaints as prescribed in Article 15 of Decree No. 118/2003/ND-CP refers to the intentional deceitful actions of organizations or individuals aimed at obtaining improper gains when participating in insurance, making claims for insurance compensation, paying insurance benefits, and resolving insurance complaints.

Colluding with insurance beneficiaries as prescribed in Point b, Clause 2, Article 15 of Decree No. 118/2003/ND-CP refers to the collusion with insurance beneficiaries to forge documents, provide false information, stage fake scenes, or engage in other illegal behaviors during the process of requesting resolution, claiming insurance compensation, and paying insurance benefits.

5. Violations of the regulations on inspections, examinations, and supervision by competent state authorities as prescribed in Article 24 of Decree No. 118/2003/ND-CP.

5.1. Acts of delaying, evading, or using deceptive tactics include:

a) Failing to provide or deliberately prolonging the provision of documents and materials requested by the inspection or audit team.

b) Failing to arrange, arranging too late, or arranging personnel without responsibility to work with the inspection or audit teams.

c) Providing inaccurate information, reports, vouchers, accounting books, and other documents and materials requested by the inspection or audit teams.

d) Other acts of delaying, evading, or using deceptive tactics as prescribed by law.

5.2. Interfering with the handling of matters by inspection agencies and competent state authorities includes:

a) Providing incorrect information to a higher administrative agency with the aim of exerting pressure on the responsible agency handling the matter.

b) Providing false information to mass media outlets with the aim of exerting pressure to obstruct the handling of the matter.

c) Threatening or using other means to obstruct the handling agency.

VI. COOPERATION AMONG FUNCTIONAL AGENCIES IN HANDLING PENALTIES

1. During the process of performing state management functions at the local level, if violations in the insurance business sector are discovered, before issuing a penalty decision, the authorized authority must exchange opinions in writing with the Ministry of Finance.

Within ten working days from the date of receipt of the document, the Ministry of Finance has the responsibility to reply in writing to the authorized authority regarding its opinion on the penalty.

Based on the opinion of the Ministry of Finance, the authorized authority at the local level issues a decision on administrative penalties in the insurance business sector.

2. Administrative violations related to insurance business activities and contrary to regulations on state management in other areas such as taxation, accounting systems, business registration, etc., shall be handled according to decrees on administrative penalties in those specialized fields.

3. In cases where the violation of an organization or individual occurs in multiple locations, the agency discovering the violation must prepare an administrative violation record, stop the violation, and notify the Department of Finance Inspectorate for joint handling of the violation.

4. Decisions of the Department of Finance Inspectorate and the Ministry of Finance Inspectorate regarding administrative penalties in the insurance business sector must be sent to the People's Committee of the locality where the administrative violation was discovered and handled for monitoring and ensuring enforcement.

5. Within seven working days from the date of issuance of the penalty decision, the person issuing the administrative penalty decision in the insurance business sector has the responsibility to send a copy of the decision to the Ministry of Finance for monitoring and coordination in resolution.

VII. IMPLEMENTATION ORGANIZATION

1. This Circular takes effect fifteen days after its publication in the Official Gazette.

2. The Director of the Ministry of Finance Inspectorate directs and guides units and individuals within the financial inspection system to thoroughly understand and strictly implement administrative penalties in the insurance business sector.

3. During implementation, if there are difficulties or obstacles, they should promptly reflect them to the Ministry of Finance for consideration and guidance in resolution.

 

 

 

MODEL OF ADMINISTRATIVE VIOLATION RECORD

(Annexed to Circular No.../2004/TT-BTC dated...March 2004 of the Ministry of Finance)

 

ADMINISTRATIVE VIOLATION RECORD ON THE INSURANCE BUSINESS SECTOR

 

Today, at...hours...day...month...year...at...

We include ²:

1...Position: ...;

2...Position: ...;

3...Position: ...;

With the presence of: ³

1. Mr./Ms....Occupation/position...;

Permanent address (temporary residence): ...;

Identity card number:...Date of issue:...; Issuing place:...;

2...Occupation/position: ...Permanent address:...;

Identity card number:...Date of issue:...; Issuing place:...;

.............................................................,

Conducting the preparation of an administrative violation record on the insurance business sector against:

Mr./Mrs./organization ⁴: ...Occupation (field of activity): ...;

Address: ...;

Identity card number/Decision on establishment or Business Registration Certificate...

Issued on...at ...

Has committed the following administrative violations: ⁵: .............;

The above actions have violated Article...Clause...Point...of Government Decree No. 118/2003/NĐ-CP dated October 13, 2003 on administrative penalties in the insurance business sector.

The person/organization suffering damage (if any):

Name:...;

Address: ...;

Identity card number/Decision on establishment or Business Registration Certificate...;

Issued on...at ...

Statement of the violator/representative of the violating organization:

Statement of the witness:

Statement of the person/representative of the organization suffering damage due to the violation (if any):

The authorized authority has requested Mr./Mrs./organization to immediately cease the violation.

Measures to prevent administrative violations include:

........

We temporarily hold the following items, means, and documents of the violation to transfer to:...for the competent authority to resolve.

 

 

Apart from the items, means, and documents mentioned above, we do not hold any additional items.

Request Mr./Mrs./representative of the violating organization to be present at ⁸...at...hours...day...month...year to resolve the violation.

The record is made in...copies having the same content and value, and one copy is handed over to the violator/representative of the violating organization and... ⁹

After reading the record, the people present agree with the content of the record, have no other comments, and sign the record or provide other comments as follows:

Additional comments (if any) ¹⁰:

This record consists of...pages, signed and confirmed by all present on each page

 

 

 

Reason why the violator or representative of the violating organization did not sign the record ¹¹:

...............................................................................

Reason why the person suffering damage or representative of the organization suffering damage did not sign the record ¹²:......

 

MODEL OF DECISION ON ADMINISTRATIVE PENALTY

(Annexed to Circular No.../2004/TT-BTC dated...March 2004 of the Ministry of Finance)

 

Pursuant to …;

DECISION ON ADMINISTRATIVE PENALTY ON THE INSURANCE BUSINESS SECTOR

Based on the Administrative Violation Handling Ordinance dated July 2, 2002;

Based on Article...Government Decree No. 118/2003/NĐ-CP dated October 13, 2003 on administrative penalties in the insurance business sector;

Based on the Administrative Violation Record prepared by ¹⁴...at...hours...day...month...year...at ...;

I, ...¹⁵; Position:...;

Unit...,

DECISION:

Article 1. Imposing administrative penalties on:

Mr./Mrs./organization¹⁶: ..........;

Occupation (field of activity): ...;

Address: ...;

Identity card number/Decision on establishment or Business Registration Certificate...;

Issued on...at...;

With the following forms:

1. Principal forms of administrative penalty:

Warning/fine with the amount of:...dong. (Written in words: ...).

2. Additional penalty form (if any):

1. Revocation of the right to use licenses, practice certificates:...

2. Confiscation of items, means used for committing administrative violations including:...

3. Remedial measures (if any):

Reason:

- Has committed administrative violations: ¹⁷...........

As stipulated in Point...Clause...Article...of Government Decree No. 118/2003/NĐ-CP dated October 13, 2003 on administrative penalties in the insurance business sector.

Related circumstances in resolving the violation: ...

Article 2. Mr./Mrs./Organization... must strictly comply with the Decision on Administrative Sanction within ten days from the date of receipt of the Decision on Administrative Sanction on..., except in cases where compliance is deferred or...¹⁸.

Beyond this period, if Mr./Mrs./Organization... intentionally fails to comply with the Decision on Administrative Sanction, enforcement measures will be taken.

The fine stipulated in Article 1 shall be paid into Account Number:...of the State Treasury...¹⁹ within ten days from the date of receipt of the Decision on Administrative Sanction.

Mr./Mrs./Organization... has the right to lodge a complaint or bring a lawsuit against this Decision on Administrative Sanction in accordance with the provisions of the law.

Article 3. This Decision takes effect from..., month..., year...²⁰.

Within three days, this Decision shall be sent to:

1. Mr./Mrs./Organization:...for compliance;

2. The State Treasury...for collection of fines.

3....................... .

This Decision consists of...pages, stamped across the joints of the pages.

 

DECISION MAKER
(Sign, write full name and stamp)

Note:

1. Record the administrative province name.

2. Clearly record the full name and position of the person drafting the record.

3. Full name of the witness. If there is a representative of the authority, clearly record their full name and position.

4. If it is an organization, record the full name and position of the representative of the violating organization.

5. Specifically record the time, date, month, year, and location of the violation; describe the violation behavior.

6. If it is a vehicle, add the registration number; if it is foreign currency, record the serial number of each note.

7. Clearly state whether the evidence or means of transportation have been sealed; if they have been sealed, the seal must bear the signature of the violator (or the representative of the violating organization), witnessed by a family representative, organizational representative, or authority representative; if not, clearly state that it was witnessed by Mr./Mrs./...

8. Clearly record the address of the headquarters where the individual or organization must appear.

9. Specifically record the individuals and organizations entrusted with the record.

10. Individuals who have different opinions about the content of the record must write down their own opinions, reasons for differing opinions, sign, and clearly record their full names.

11,17. The person drafting the record must clearly record the reasons why these individuals refuse to sign the record.

13. Record the administrative province name.

14. Record the full name and position of the person drafting the record.

15. Full name of the person issuing the sanction decision.

16. If it is an organization, clearly record the full name and position of the representative of the violating organization.

17. If there are multiple violations, clearly record each violation.

18. Clearly record the reason.

19. Clearly record the name and address of the State Treasury.

20. Date of signing the Decision or the date decided by the authorized sanctioning authority.