Decree No. 48/2018/ND-CP amends and supplements some articles of Decree No. 98/2013/ND-CP dated August 28, 2013 of the Government on administrative penalties for violations in the insurance business and lottery business.

DECREE

Amending and supplementing certain articles of Decree No. 98/2013/NĐ-CP dated August 28, 2013 of the Government on administrative penalties for violations in the insurance business and lottery businessissued on December 9, 2000, Law amending and supplementing certain articles of the Insurance Business Law issued on November 24, 2010; 

Pursuant to the Law on Government Organization dated June 19, 2015;

Based on the Administrative Violation Handling Law dated June 20, 2012;

Pursuant to the Law kThe Government promulgates this Decree to amend and supplement certain articles of Decree No. 98/2013/NĐ-CP dated August 28, 2013 of the Government on administrative penalties for violations in the insurance business and lottery business. kArticle 1. Amending and supplementing certain articles of Decree No. 98/2013/NĐ-CP dated August 28, 2013 of the Government on administrative penalties for violations in the insurance business and lottery business as follows:

At the proposal of the Minister of Finance;

Organizations subject to administrative penalties for violations in the insurance business and lottery business under this Decree include: Life insurance companies, non-life insurance companies, health insurance companies, reinsurance companies, insurance brokerage companies, branches of foreign non-life insurance companies, representative offices of foreign insurance companies, representative offices of foreign reinsurance companies, representative offices of foreign insurance brokerage companies, insurance agents who are organizations engaged in lottery business, lottery agents who are organizations, and other related organizations as provided for in this Decree".

a) Clause 1 of Article 7 is amended and supplemented as follows:

"1. The purpose of the national high school examination is to use the examination results for recognizing high school graduation; provide information to evaluate the quality of secondary education; provide data as a basis for university and vocational education admissions."

"1. Individuals and organizations of Vietnam, individuals and organizations from foreign countries committing administrative violations in the field of insurance business and lottery business as prescribed in this Decree.

"1. Warning penalty shall be imposed for one of the following violations:

2. Article 7 shall be amended and supplemented as follows:

a) Not publishing daily in five consecutive issues about the contents that must be published according to the law;

b) Publishing out of time one of the contents in the License for Establishment and Operation or the Representative Office Placement License according to the law;
c) Not publishing the contents or the modified and supplemented contents at the Representative Office Placement License according to the law";
b) Clause 4a is added after Clause 4 of Article 7 as follows:
"4a. Additional form of administrative penalty: Confiscation of the objects of violation for the case of violation at point c of Clause 2 of this Article".

3. Clauses 2, 3, and 4 of Article 9 are amended and supplemented as follows:

a) Point d of Clause 2 of Article 9 is amended and supplemented as follows:

"d. Appointing the General Director (Director), Deputy General Director (Deputy Director), Branch Manager, Head of Representative Office of insurance companies, reinsurance companies, insurance brokerage companies concurrently with the position of head of more than one (01) branch or representative office of insurance companies, reinsurance companies, insurance brokerage companies or business units. Appointing the Director, Deputy Director of foreign branches concurrently with the position of head of more than one (01) business unit of such branch."

b) Point đ is added after point d of Clause 2 of Article 9 as follows:

"đ. Appointing actuarial experts of life insurance companies, health insurance companies, actuarial experts of reserve and solvency of non-life insurance companies, reinsurance companies, foreign branches concurrently with the positions of General Director (Director), Chief Accountant."

c) Point a of Clause 3 of Article 9 is amended and supplemented as follows:

"a. Appointing Deputy General Directors (Deputy Directors), actuarial experts, Branch Managers, Heads of Representative Offices, Heads of Internal Audit Departments, Supervisors, Members of the Board of Management, Members of the Board of Members not meeting the standards prescribed by law."

d) Points a and b of Clause 4 of Article 9 are amended and supplemented as follows:

"a. Appointing Chairmen of the Board of Management (Chairman of the Board of Members, Chairman of the company), General Directors (Directors), Actuarial Experts, Actuarial Experts of Reserve and Solvency not meeting the standards prescribed by law;

b. Not appointing Chairmen of the Board of Management (Chairman of the Board of Members, Chairman of the company), General Directors (Directors), Actuarial Experts, Actuarial Experts of Reserve and Solvency according to the provisions of the law;"

4. Clauses 2, 3, 4, and 5 of Article 10 are amended and supplemented as follows:

"2. A fine from VND 30,000,000 to VND 40,000,000 shall be imposed for the act of actuarial experts of life insurance companies, health insurance companies failing to perform their duties according to the law in one of the following tasks:

a. Calculating insurance premiums and participating in drafting rules and terms of insurance products; confirming insurance premiums;

b. Annually assessing the difference between assumptions for premium calculation and actual implementation of each product;
c. Evaluating the reinsurance program and reinsurance contracts before submitting to the General Director, Board of Management (Board of Members, Chairman of the company) for approval;
d. Reporting directly to the Ministry of Finance in cases of serious impact on the solvency of the insurance company.
3. A fine from VND 30,000,000 to VND 40,000,000 shall be imposed for the act of actuarial experts of reserve and solvency of non-life insurance companies, reinsurance companies, foreign branches failing to perform their duties according to the law in one of the following tasks:
a. Calculating insurance premiums and participating in drafting rules and terms of insurance products, reinsurance; confirming insurance premiums;
b. Assessing the situation of compensation payments;
4. A fine from VND 90,000,000 to VND 100,000,000 shall be imposed for the act of actuarial experts of life insurance companies, health insurance companies failing to perform their duties according to the law in one of the following tasks:
a. Calculating the establishment of reserves for insurance operations;
3. A fine from VND 30,000,000 to VND 40,000,000 shall be imposed for the act of actuarial experts of reserve and solvency of non-life insurance companies, reinsurance companies, foreign branches failing to perform their duties according to the law in one of the following tasks:
a. Calculating insurance premiums and participating in drafting rules and terms of insurance products, reinsurance; confirming insurance premiums;
b. Participating in the implementation of fund separation and annual surplus distribution of the main contract insurance fund;
a) Calculate the provision for insurance business operations;
b) Participate in the implementation of the fund separation and the calculation of the annual surplus distribution of the main insurance contract fund;
c) Monthly, assess the payment capacity of life insurance companies, health insurance companies, and confirm in the payment capacity report sent to the Ministry of Finance.
5. A fine of from 90,000,000 VND to 100,000,000 VND for the violation by risk assessment professionals and payment capacity assessors of non-life insurance companies, reinsurance companies, and foreign branches who fail to comply with legal regulations on any of the following tasks:
a) Calculate the provision for insurance business operations;
b) Participate in implementing the separation of equity capital and insurance premium sources in accordance with legal provisions;

c) Quarterly calculate the payment capacity of non-life insurance companies, reinsurance companies, and foreign branches, and confirm in the payment capacity report sent to the Ministry of Finance."

5. Point b Clause 2 Article 12 shall be amended and supplemented as follows:

"b) Retain maximum liability on each risk or individual loss exceeding 10% of equity capital."

6. Clause 3 Article 14 shall be amended and supplemented as follows:

"3. A fine of from 90,000,000 VND to 100,000,000 VND for any of the following violations of fraud in insurance business where the amount embezzled is under 20,000,000 VND or the damage caused is under 50,000,000 VND or does not reach the level of criminal prosecution, specifically as follows:
a) Collude with the beneficiary of insurance benefits to settle insurance claims, pay insurance money contrary to the law;
b) Forge documents, intentionally distort information to refuse compensation, pay insurance money when the insured event has occurred;
c) Forge documents, intentionally distort information in claim request files for compensation, payment of insurance money;
d) Self-inflict damage to property or health to enjoy insurance benefits except as otherwise provided by law".

7. Add point đ after point d Clause 2 Article 17 as follows:

"đ) Force organizations and individuals to purchase insurance in any form".

8. Clause 2, Clause 3 Article 18 shall be amended and supplemented as follows:

"2. A fine of from 10,000,000 VND to 20,000,000 VND for any of the following violations:
a) Failure to report the list of new products launched in the previous month;
b) Announce products permitted to be launched according to the law outside the prescribed time limit;
c) Announce incomplete contents of products permitted to be launched according to the law.
3. A fine of from 60,000,000 VND to 70,000,000 VND for any of the following violations:
a) Implementing rules, terms, and premium schedules of motor vehicle insurance products before registration and approval by the Ministry of Finance;
b) Launching life insurance and health insurance products before approval by the Ministry of Finance;
c) Not complying with registered rules, terms, and premium schedules with the Ministry of Finance;
d) Not complying with approved rules, terms, and premium schedules by the Ministry of Finance;
đ) Amending or supplementing rules, terms, and premium schedules without written consent from the Ministry of Finance;

e) Failure to report to the Ministry of Finance non-life insurance products that do not ensure financial safety as prescribed by law."

9. Clause 5 Article 24 shall be added as follows:

"5. Additional forms of punishment:
a) Revocation of the insurance agent certificate of individuals for two to three months, suspension of insurance agency activities of organizations for two to three months for violations stipulated in Clause 2 of this Article.
b) Compel training institutions to suspend training of agents for one to three months for violations stipulated in Clause 3 of this Article".

10. Point a Clause 1 Article 26 shall be amended and supplemented as follows:

"a) Shareholder equity is lower than the statutory capital as prescribed by law;"

11. Clause 2 Article 29 shall be amended and supplemented as follows:

"2. A fine of from 60,000,000 VND to 70,000,000 VND for any of the following violations:
a) Investing outside the permitted sources of funds as prescribed by law;
b) Investing idle funds from risk reserves not in accordance with legal provisions;
c) Investing more than 30% of investment capital in companies within the same group or cluster of companies with mutual ownership relationships as prescribed by law;
d) Investing from shareholder equity not in accordance with legal provisions".

12. Article 31 shall be amended and supplemented as follows:

a) The name of Article 31 shall be amended and supplemented as follows:

"Article 31. Punishment for violations of provisions on separating equity capital and insurance premiums, and distributing surplus"

b) Clause 1, Clause 2, Clause 3 Article 31 shall be amended and supplemented as follows:

"1. A fine of from 10,000,000 VND to 20,000,000 VND for any of the following violations:
a) Failure to register with the Ministry of Finance the principles of asset allocation, capital, revenue, and common expenses related to both the owner's fund and the policyholder's fund before implementation by insurance companies, foreign branches as prescribed by law;
b) Applying the method of distributing surplus of life insurance companies before approval by the Ministry of Finance.
2. A fine of from 30,000,000 VND to 40,000,000 VND for the act of transferring assets and compensating deficits of the policyholder's fund of life insurance companies not in accordance with legal provisions.
3. A fine of from 60,000,000 VND to 70,000,000 VND for any of the following violations:
a) Separating equity capital and insurance premiums of insurance companies, foreign branches not in accordance with legal provisions;
b) Distributing surplus of life insurance companies not in accordance with legal provisions".

Article 2. Repeal certain provisions of Decree No. 98/2013/NĐ-CP dated August 28, 2013 of the Government on administrative penalties for violations in the insurance business and lottery business as follows:

1. Repeal Clause 1 of Article 9.

2. Repeal Point b of Clause 2 of Article 14.

3. Repeal Point a of Clause 3 of Article 23.

4. Repeal Point d of Clause 6 of Article 24.

5. Repeal Points b, c, d, and đ of Clause 1 of Article 26.

Article 3. Effectiveness and Implementation:

1. This Decree takes effect from May 10, 2018.

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