✦ Smart summary
This Circular guides the establishment and operation of insurance enterprises and insurance brokers, specifies procedures for issuing licenses, managing insurance agents, reinsurance activities, and foreign representative offices in Vietnam. The document applies to insurance enterprises and competent authorities.
Scope of application
Insurance enterprises, insurance brokers, Ministry of Finance, Vietnam Insurance Association, foreign insurance enterprise representative offices in Vietnam.
Key points
- Insurance enterprises and brokers must submit applications for license issuance according to the prescribed procedures, including specific documents. The Ministry of Finance will review the application and decide to issue or reject the license within sixty days.
- During their operations, insurance enterprises are responsible for registering insurance rules, terms, and premium rates for insurance products as required.
- Insurance enterprises may only pay insurance commissions from actual premiums collected, with the maximum commission rate specified in detail.
- Insurance enterprises must comply with mandatory reinsurance and insurance agent management regulations.
- The transfer of insurance contracts between insurance enterprises must ensure that it does not harm the interests of the insured party.
🌐 Social impact of this document
- Creating opportunities for insurance enterprises and brokers to operate in accordance with the law.
- Reducing risks for the insured through the management of insurance agents, reinsurance, and the activities of foreign representative offices.
- Strengthening supervision of insurance business operations to ensure transparency and effectiveness.
❓ Frequently asked questions
What documents do insurance enterprises need to prepare when applying for a license?
The application for a license of an insurance enterprise includes approval documents for insurance business operations, financial reports, and organizational charters. The application for an insurance broker also requires approval documents for insurance brokerage business operations.
What is the maximum insurance commission rate?
The maximum insurance commission rate is specified in Appendix 4 and Appendix 5 of this Circular, based on each type of insurance business.
Can insurance enterprises transfer insurance contracts?
Yes, but it must ensure that it does not harm the interests of the insured party. Enterprises must register and follow the regulations set forth in this Circular.
Which types of insurance are subject to mandatory reinsurance?
Mandatory reinsurance applies to property insurance, cargo transportation insurance, fire and explosion insurance, and civil liability insurance for ship owners (Clause 1 Article 22 of Decree No. 42/2001/NĐ-CP).
What activities can insurance brokers perform?
Insurance brokers may only advise and introduce insurance rules, terms, and premium rates that have been approved by the Ministry of Finance or registered by insurance enterprises with the Ministry of Finance.
Full text
CIRCULAR
Guidelines for Implementing Decree No. 42/2001/NĐ-CP dated August 1, 2001 of the Government
detailing the implementation of certain provisions of the Insurance Business Law
____________________
Pursuant to the Insurance Business Law No. 24/2000/QH10 dated December 9, 2000;
Pursuant to Decree No. 42/2001/NĐ-CP dated August 1, 2001 of the Government detailing the implementation of certain provisions of the Insurance Business Law;
Pursuant to Decree No. 178/CP dated October 28, 1994 of the Government stipulating the tasks, powers, and organizational structure of the Ministry of Finance;
I. SCOPE AND APPLICABLE SUBJECTS:
I. ESTABLISHMENT AND OPERATIONS OF INSURANCE COMPANIES AND INSURANCE BROKERS
1The application for a license to establish and operate (hereinafter referred to as the license)
1.1. The application for a license of an insurance company shall be carried out in accordance with Article 64 of the Insurance Business Law. The application for a license of an insurance brokerage company shall be carried out in accordance with Clause 1, 2, 3, and 4 of Article 64 of the Insurance Business Law.
1.2. The application for a license of an insurance company and an insurance brokerage company shall be prepared in three (3) sets, including one (1) original set and two (2) copies. The application for a license of an insurance company and an insurance brokerage company with foreign investment capital shall be prepared in three (3) sets, each set consisting of one copy in Vietnamese and one copy in English. One (1) set shall be the original, and two (2) sets shall be copies.The entity or individual named in the application for a license (hereinafter referred to as the investor) shall be responsible for the accuracy of the application for a license..
1.3. The application for a license shall be made according to the form attached at Appendix 1 to this Circular, signed by the legal representative or authorized person of the investor.
1.4. In addition to the documents stipulated in Point 1.1 above, depending on the type of business to be established, the application for a license must include the following documents:
1.4.1. For state-owned insurance companies and state-owned insurance brokerage companies:
a) A document from the authority deciding to establish the enterprise approving the enterprise's participation in insurance business and insurance brokerage business;
b) An explanation of the source of capital for establishing the insurance company or insurance brokerage company, confirmed by the competent authority.
1.4.2. For joint-stock insurance companies, joint-stock insurance brokerage companies, limited liability insurance brokerage companies, private insurance brokerage enterprises, and partnership insurance brokerage companies:
a) Minutes of meetings of the investors regarding the establishment of joint-stock insurance companies, joint-stock insurance brokerage companies, limited liability insurance brokerage companies, private insurance brokerage enterprises, and partnership insurance brokerage companies;
b) Confirmation by the competent authority regarding the legality of the capital for establishing the company.
1.4.3. Forinsurance companies and insurance brokerage companies with foreign investment capital:
a) The charter of the foreign party participating in the joint venture or of the foreign investor (for wholly foreign-owned insurance companies and insurance brokerage companies);
b) The operating permit of the foreign party participating in the joint venture or of the foreign investor (for wholly foreign-owned insurance companies and insurance brokerage companies);
c) A document confirming by the competent authority of the foreign country allowing the foreign party to participate in the joint venture or allowing the foreign investor to establish a wholly foreign-owned insurance company or insurance brokerage company in Vietnam. If the regulations of the country where the foreign party or foreign investor has its headquarters do not require such approval, evidence confirming this must be provided;
d) Joint venture insurance companies and insurance brokerage companies must have adocument from the competent authority of Vietnam allowing participation in the joint venture;
đ) An explanation of the source of capital contributed by the Vietnamese partner, confirmed by the competent authority.
2. Procedures for receiving and processing the application dossier for obtaining a license
2.1. The application dossier for obtaining a license shall be received and examined by the Ministry of Finance on the basis of the following:
2.1.1. The number of sets of applications that must be submitted and the list of documents required in the application as prescribed;
2.1.2. The validity of the application dossier for obtaining a license;
2.1.3. Documents confirming the legal status and financial situation of the investors.
2.2. Immediately upon receipt of a complete and valid set of applications, the Ministry of Finance will issue a receipt to the investor or their authorized representative for the application for a license.
2.3. Within sixty (60) days from the date of receiving all applications for licenses from the investors, the Ministry of Finance will decide to grant or refuse the license. In case of refusal, the Ministry of Finance will provide a written explanation of the reasons.
During the review process of the application for a license, within fifteen (15) working days from the date of receiving a complete and valid set of applications as prescribed in Point 2.1 above, the Ministry of Finance may send a notice requesting the investor to supplement or amend the application if necessary.
The investor must submit the supplementary or amended application within thirty (30) working days from the date of receipt of the notice from the Ministry of Finance. Upon expiration of the period for supplementing or amending the application for a license, including any extension periods, if the investor fails to complete the application as required, the application for a license will lose its validity for consideration.
2.4. The license will be issued according to the form prescribed in Appendix 2 to this Circular.
3. Examination of the application dossier for obtaining a license
3.1. The application for a license will be reviewed based on the following grounds:
3.1.1. The Insurance Business Law and guiding documents;
3.1.2. Other relevant laws and regulations.
3.2. Contents of the examination of the application dossier for obtaining a license:
3.2.1. Examination of the legal status and financial situation of the investors through:
a) Documents establishing the enterprise and the charter of the organization and operation of the enterprise (for investors who are enterprises) or documents proving the legal status (for individual investors);
b) Audited financial reports for the last three years (for operating enterprises), including revenue, asset value, annual profit; capital-raising capacity of the investors; bank confirmation of the amount in the investor's account (for individual investors); support from the parent company (if applicable).
c) The scale of capital, reserve funds, and other reserves as prescribed by law, investment activities, and business plans of the proposed insurance company and insurance brokerage company.
3.2.2. Examination of the appropriateness of establishing an insurance company or an insurance brokerage company in relation to planning and economic-social benefits:
a) The application dossier for obtaining a license is consistent with planning, plans, and development orientations for the insurance market and the financial market of Vietnam;
b) The appropriateness of establishing the enterprise will be examined on the following specific issues:
- Ensuring the healthy development of the insurance market;
- National economic needs for the type of insurance product that the enterprise intends to operate;
- Considering the ability to enhance the exploitation potential of domestic insurance and the ability to retain insurance premiums in the market; the ability to create jobs for workers;
- The progress of integration and the development of trade relations between Vietnam and other countries.
3.2.3. Examination of the business operations for the application dossier for obtaining a license:
a) Rules, terms, and insurance fee schedules shall be established in accordance with current laws, ensuring economic and technical feasibility while being suitable for Vietnam's economic and social conditions and customs.
b) Encouraging the implementation of new insurance businesses that existing operating insurance companies have not been able to meet.
4. Licensing fees
Within seven days from the date of receiving the business registration certificate, insurance companies and insurance brokerage firms must pay the license issuance fee; the license issuance fee rate is 0.1% of the statutory capital as stipulated in Article 4 of Decree No. 43/2001/NĐ-CP dated August 1, 2001, issued by the Government on financial regulations for insurance companies and insurance brokerage firms.
5. Amending and Supplementing the License
The procedures for approving changes as prescribed in Article 69 of the Insurance Business Law shall be implemented as follows:
5.1. Changing the name of the enterprise:
An insurance company or insurance brokerage firm wishing to change its name must submit to the Ministry of Finance an application for name change signed by the legal representative or authorized person of the enterprise, along with a confirmation document from the competent authority or individual of the enterprise regarding the name change.
5.2. Increasing or decreasing the registered capital of the insurance company or insurance brokerage company:
An insurance company or an insurance brokerage company wishing to change its registered capital must submit to the Ministry of Finance:
5.2.1. A statement explaining the adjustment of the registered capital increase or decrease, signed by the legal representative or authorized person of the enterprise, specifying the amount of increased (or decreased) capital, reasons for the increase (or decrease), the plan for using the capital, and the implementation timeline.
5.2.2. A document of approval from the authorized agency or person of the enterprise regarding the increase or decrease in registered capital;
5.2.3. An explanation regarding the sources of finance used to increase capital in the case of increasing registered capital.
5.3. Opening or ceasing operations of a branch or representative office
5.3.1. The application documents for establishing a branch or representative office of an insurance company or insurance brokerage firm shall be carried out according to the provisions of Article 11 and Article 12 of Decree No. 42/2001/NĐ-CP of the Government dated August 1, 2001, detailing the implementation of certain articles of the Insurance Business Law.
5.3.2. Application documents for establishing a branch or representative office of an insurance company or insurance brokerage firm abroad shall comply with the relevant laws on foreign investment.
5.3.3. Application documents for terminating the operations of a branch or representative office of an insurance company or insurance brokerage firm include:
- Request for termination of operations
- Report on the operational status of the branch or representative office over the last three years. In cases where the branch or representative office has been operating for less than three years, the report should cover the period since the start of operations.
- Responsibilities and issues arising from the termination of operations
5.4. Changing the location of the headquarters, branches, or representative offices of an insurance company or insurance intermediary.
An insurance company or insurance brokerage firm wishing to change the location of its headquarters, branches, or representative offices must submit to the Ministry of Finance an application for changing the location of the headquarters or branches signed by the legal representative or authorized person of the enterprise.
5.5. Changes in the content, scope, and duration of operations
The procedures and application documents for changing the content, scope, and duration of operations of an insurance company or insurance brokerage firm shall be carried out according to the provisions of Article 13 of Decree No. 42/2001/NĐ-CP of the Government dated August 1, 2001, detailing the implementation of certain articles of the Insurance Business Law.
5.6. Transfer of shares or equity contributions
The application documents for transferring shares or equity contributions representing 10% or more of the registered capital shall be compiled into one set and submitted to the Ministry of Finance, including the following documents:
5.6.1. An application for transferring shares or equity contributions representing 10% or more of the registered capital, signed by the legal representative or authorized person of the enterprise, specifying the quantity, value, and percentage of shares or equity contributions to be transferred; the reasons for the transfer.
5.6.2. Information related to the organization or individual receiving the transferred shares or capital contributions;
5.6.3. The share transfer agreement or equity contribution transfer contract.
5.7. Changing the Chairman of the Board of Directors, General Director (Director).
5.7.1. At least fifteen days before issuing a notice of appointment or dismissal of the Chairman of the Board of Directors, General Director (Director) of an insurance company or insurance brokerage firm, the General Director (Director), Chairman of the Board of Directors, or a person authorized by the Chairman of the Board of Directors must send a written request to the Ministry of Finance for approval of the change.
5.7.2. Application documents for changing the Chairman of the Board of Directors or General Director (Director) include:
a) A request for approval of the change;
b) The proposed appointment or dismissal of personnel of the insurance company or insurance intermediary;
c) A resume of the proposed appointee, confirmed by the Board of Directors or the authorized person of the insurance company or insurance brokerage firm.
d) Certificates proving the qualifications and professional competence of the proposed Chairman of the Board of Directors or General Director (Director);
đ) Minutes of the meeting regarding the appointment or dismissal of the Chairman of the Board of Directors or General Director (Director) of the insurance company or insurance intermediary, if any.
5.8. Splitting, dividing, merging, consolidating, dissolving, or converting the form of the enterprise.
The application documents, procedures, and deadlines for handling requests for splitting, dividing, merging, consolidating, dissolving, or converting the form of an insurance company or insurance brokerage firm shall be carried out according to the relevant laws.
5.9. Deadline for resolving requests to amend and supplement licenses.
Within thirty days from the date the Ministry of Finance receives complete application documents for amending and supplementing the license of an insurance company or insurance brokerage firm as specified in Points 5.1 to 5.8, Part I, of this Circular, the Ministry of Finance will issue a written response regarding the approval or rejection of the enterprise's request. In case of rejection, the reasons must be clearly stated in writing. In case of approval, the Ministry of Finance will issue an amended license to the enterprise according to the model specified in Appendix 3 (attached to this Circular). The amended license is an integral part of the establishment and operation license of the insurance company.
II. INSURANCE OPERATIONS
1. Registration of rules, terms, and premium rates of insurance products.
1.1. Registration of rules, terms, and insurance fee schedules shall apply to insurance products as prescribed in Clause 3 of Article 18 of Decree No. 42/2001/NĐ-CP of the Government dated August 1, 2001, detailing the implementation of certain articles of the Insurance Business Law.
1.2. An insurance company may only register rules, terms, and insurance fee schedules for insurance products within the permitted insurance businesses as specified in the business registration certificate (or Certificate of Compliance with Insurance Business Standards and Conditions) issued by the Ministry of Finance to the enterprise.
1.3. An insurance company is responsible for the content and legality of the rules, terms, and insurance fee schedules of the registered insurance products with the Ministry of Finance.
1.4. When registering the rules, terms, and insurance fee schedules of insurance products, the insurance company must submit to the Ministry of Finance the following documents:
1.4.1. The application for registering insurance products according to the form prescribed in Appendix 13 attached hereto;
1.4.2. Rules, terms, and premium rates of the proposed insurance product.
1.4.3. Within seven days from the date of receiving all registration documents for rules, terms, and premium rates of insurance, the Ministry of Finance shall confirm that the insurance company has completed the registration procedures for such rules, terms, and premium rates.
2. Publication of the list of insurance products
Within the first fifteen days of each quarter, the Ministry of Finance shall publish the list of insurance products provided by insurance companies on the market up to the publication date. The publication of the list of insurance products shall be conducted publicly through mass media and sent to the Vietnam Insurance Association, insurance companies legally established and operating in Vietnam.
3. Insurance commission
3.1. An insurance company may only pay insurance commissions from actual premiums collected according to the insurance commission rate prescribed by the Ministry of Finance for each type of insurance business to the entities specified in Article 20 of Decree No. 42/2001/NĐ-CP dated August 1, 2001, detailing certain provisions of the Law on Insurance Business.
3.2. Insurance commissions are expenses paid by insurance companies to insurance brokerage firms and insurance agents. Insurance companies may independently use insurance commissions for the following expenses:
3.2.1. Direct payment to insurance agents and brokerage firms after these organizations provide services to the insurance company to offset the following costs:
- Initial acquisition costs (research, persuasion, and introduction of customers);
- Premium collection costs;
- Costs for monitoring contracts and persuading customers to maintain insurance contracts.
3.2.2. Payment of insurance commissions to manage agents including:
- Payment to agent managers who are not employees of the company;
- Incentives for agents exceeding revenue targets, number of insurance contracts, and maintaining high contract retention rates;
- Costs to implement certain welfare policies and stabilize income for agents.
3.3. The maximum insurance commission rate that an insurance company may pay to agents is implemented according to the table of insurance commission rates applicable to each type of insurance business specified in Appendix 4 - Table of Maximum Insurance Commission Rates for Non-Life Insurance Businesses and Appendix 5 - Table of Maximum Insurance Commission Rates for Life Insurance Businesses attached hereto.
Insurance companies may adjust the insurance commission rates applied among different insurance products within the same type of insurance business based on business realities but may not adjust commission rates between different types of insurance businesses.
3.4. The insurance commission rate paid to insurance brokerage firms is based on the agreement between the insurance company and the brokerage firm in accordance with Vietnamese law and international practices.
III. REINSURANCE ACTIVITIES
1. Insurance companies must perform mandatory reinsurance as stipulated in Article 22 of Decree No. 42/2001/NĐ-CP dated August 1, 2001, detailing certain provisions of the Law on Insurance Business. The list of business activities subject to mandatory reinsurance includes:
1.1. Property insurance and liability insurance;
1.2. Cargo transportation insurance by road, sea, river, rail, and air;
1.3. Aviation insurance;
1.4. Fire and explosion insurance;
1.5. Hull insurance and civil liability insurance of ship owners.
2. Mandatory reinsurance commissions paid by the National Reinsurance Corporation of Vietnam to insurance companies that have ceded mandatory reinsurance are carried out according to the provisions in Appendix 6 attached hereto.
3. Based on specific circumstances at each period, the Ministry of Finance shall supplement the list of reinsurance activities and mandatory reinsurance commissions.
IV. INSURANCE AGENTS
1. Responsibilities of insurance enterprises and the Vietnam Insurance Association (hereinafter referred to as the training institution for insurance agents) in the training of insurance agents
1.1. Training institutions wishing to train insurance agents must submit a request to the Ministry of Finance for approval of the training program for insurance agents in accordance with Clause 3 of Article 31 of Decree No. 42/2001/NĐ-CP dated August 1, 2001, detailing certain provisions of the Law on Insurance Business.
1.2. Issuance of insurance agent training certificates
1.2.1. Only training institutions approved by the Ministry of Finance may issue certificates of training for insurance agents. Individuals receiving certificates must complete the insurance agent training program and pass the examination for the certificate of training for insurance agents.
1.2.2. Certificates of training for insurance agents are issued according to the form promulgated by the Ministry of Finance (Appendix 7 attached hereto).
1.3. Each year, no later than January 30 of the following year, training institutions for insurance agents must report to the Ministry of Finance on the number of training courses organized, the number of insurance agents trained, and the number of certificates issued in the year (according to the form prescribed in Appendix 8 attached hereto). Quarterly, no later than the 15th day of the first month of the next quarter, insurance companies must report to the Ministry of Finance on the list of insurance agents of their company (according to the form prescribed in Appendix 9 attached hereto).
2. Rights and obligations of insurance enterprises and insurance agents
The rights and obligations of insurance companies in managing the activities of insurance agents, and the rights and obligations of insurance agents are stipulated in Article 29 and Article 30 of Decree No. 42/2001/NĐ-CP dated August 1, 2001, detailing certain provisions of the Law on Insurance Business.
3. Strictly prohibited are the following actions by insurance agents:
3.1. Providing false information or advertising about the content and scope of activities of insurance enterprises; conditions and terms of insurance that harm the legitimate rights and interests of policyholders;
3.2. Obstructing policyholders from providing information related to insurance contracts or inciting policyholders not to disclose details related to insurance contracts;
3.3. Competing for customers through obstructive, enticing, bribing, or threatening employees or customers of insurance enterprises, insurance agents, or insurance brokerage enterprises;
3.4. Promoting customers through illegal means such as promising to reduce insurance premiums, refunding insurance premiums, or other benefits that the insurance company does not provide to customers;
3.5. Inducing the buyer of insurance to cancel existing insurance contracts to purchase new insurance contracts.
4. The supervision of the Ministry of Finance's activities regarding the training and utilization of insurance agents by insurance companies and the Vietnam Insurance Association.
4.1. Insurance companies and the Vietnam Insurance Association are responsible under the law for all activities related to training and using insurance agents.
4.2. The Ministry of Finance may conduct inspections of insurance companies and the Vietnam Insurance Association regarding the situation of training and using insurance agents.
Such inspections shall not affect the normal operations of insurance companies and the Vietnam Insurance Association.
V. INSURANCE BROKERING COMPANIES
1. Principles of insurance brokerage activities
Insurance broking companies may only advise and introduce to policy buyers insurance rules, terms, and premium rates that have been issued, approved by the Ministry of Finance, or registered with the Ministry of Finance by insurance companies.
2. Payment of insurance premiums and payment of insurance proceeds through insurance brokers' enterprises
2.1. Insurance companies may authorize insurance brokers' enterprises to collect insurance premiums, indemnities, or insurance proceeds.
2.2. In the case where an insurance brokerage company is authorized by an insurance company to collect insurance premiums, the obligation of the insurance buyer to pay the insurance premium is fulfilled when the insurance buyer has paid the insurance premium according to the agreement in the insurance contract to the insurance brokerage company.
In the case where an insurance brokerage company is authorized by an insurance company to collect insurance premiums and the insurance buyer has paid the insurance premium according to the agreement in the insurance contract, the insurance brokerage company shall be responsible for paying the said amount of insurance premium to the insurance company within the agreed payment period between the insurance company and the insurance brokerage company. In the absence of an agreement on the payment period, the insurance brokerage company must pay the said amount of insurance premium to the insurance company as soon as possible but not exceeding 7 days from the date of receipt of the insurance premium.
2.3. In the case where an insurance brokerage company is authorized by an insurance company to pay insurance money or compensation, the insurance company still bears responsibility towards the insured person or beneficiary regarding the amount of insurance money that the insurance company is obligated to pay to the insured person or beneficiary.
2.4. In the case where an insurance brokerage company is authorized by an insurance company to pay insurance money or compensation, the insurance brokerage company shall be responsible for paying the said amount of insurance money to the insured person or beneficiary immediately upon receipt of the insurance money from the insurance company.
3. An insurance brokerage company shall not carry out the following acts:
3.1. Preventing the buyer of insurance from providing information related to the insurance contract or inducing the buyer of insurance not to declare details related to the insurance contract.
3.2. Promoting customers through illegal promises to induce them to enter into insurance contracts.
3.3. Inducing the buyer of insurance to cancel existing insurance contracts to purchase new insurance contracts.
VI. REPRESENTATIVE OFFICES OF FOREIGN INSURANCE COMPANIES AND FOREIGN INSURANCE BROKERAGE COMPANIES IN VIETNAM
1. Documents for applying for permission to establish a representative office
1.1. Foreign insurance companies and foreign insurance brokerage companies wishing to establish representative offices in Vietnam must submit to the Ministry of Finance a set of documents applying for permission to establish a representative office in accordance with Article 110 of the Insurance Business Law.
1.2. The application for establishing a representative office in Vietnam must be signed by the Chairman of the Board of Directors or an authorized person of the foreign insurance company or foreign insurance brokerage company, in accordance with the form prescribed by the Ministry of Finance at Appendix 10 attached to this Circular.
1.3. The permit for establishing a representative office of a foreign insurance company or foreign insurance brokerage company in Vietnam shall be issued in accordance with the form prescribed at Appendix 11 attached to this Circular.
1.4. Within thirty days from the date of receiving all documents for the issuance of a permit to establish a representative office, the Ministry of Finance shall issue a written approval or rejection of the application of the enterprise. In the case of rejection, the reasons must be stated in writing. In the case of approval, the Ministry of Finance shall issue a permit for the establishment of a representative office of a foreign insurance company or foreign insurance brokerage company in Vietnam.
1.5. Within seven days from the date of issuance of the permit to establish a representative office or extension of operation, foreign insurance companies and foreign insurance brokerage companies must pay the fee for issuing the permit; the fee for issuing the permit or extending operation is one million Vietnamese dong according to the provisions of Article 43 of Decree No. 42/2001/NĐ-CP dated August 1, 2001 of the Government detailing the implementation of certain provisions of the Insurance Business Law.
2. Reports on the activities of representative offices
2.1. Representative offices of foreign insurance companies and foreign insurance brokerage companies in Vietnam must report to the Ministry of Finance their activities of the representative office periodically every six months and annually to the Ministry of Finance and the People's Committee of the province or city where the representative office is located.
The mid-year report must be submitted before July 30 and the annual report must be submitted before March 1 of the following year.
2.2. Content of the report:
2.2.1. Organizational structure of the representative office, personnel, number of Vietnamese and foreign nationals working at the representative office;
2.2.2. Main activities:
a) Market access of the representative office;
b) Relations between the representative office and domestic insurance companies, insurance brokers' enterprises, and economic organizations;
c) Advisory and training work;
d) Other activities of the representative office.
2.2.3. Future directions for activities.
2.3. In cases of necessity, the Ministry of Finance may request the representative office to submit ad hoc reports outside the regular reports mentioned above, provide documents, and explain issues related to its operations.
3. Modification of the contents of the license
3.1. When there is a need to change any of the following contents in the permit to establish a representative office, the foreign insurance company or foreign insurance brokerage company must submit a written request to the Ministry of Finance to amend and supplement the Permit:
3.1.1. Changing the name, nationality of the foreign insurance company, foreign insurance brokerage company, or the name of the representative office;
3.1.2. Change in the content of the representative office's activities;
Within seven days from the date of receipt of the written request of the foreign insurance company or foreign insurance brokerage company, the Ministry of Finance will issue a written response regarding the approval or rejection of the request. In the case of rejection, the Ministry of Finance must issue a written explanation of the reasons.
3.2. In the case of increasing or decreasing the number of people from abroad working at the representative office or changing the location of the representative office, the foreign insurance company or foreign insurance brokerage company must immediately notify the Ministry of Finance in writing.
VII. PROCEDURES AND DOCUMENTS FOR TRANSFER OF INSURANCE CONTRACTS
1. Transfer of insurance contracts
1.1. During the course of operation, an insurance company may transfer all insurance contracts of one or several insurance businesses (hereinafter referred to as transfer) to other insurance companies permitted to operate in Vietnam in accordance with Section 3, Chapter III of the Insurance Business Law.
1.2. The transfer must ensure the principle of not causing damage to the interests of the policyholder after the transfer is implemented.
2. Procedures for transferring
2.1. For the transferring insurance company (hereinafter referred to as the transferring company): The transferring company must submit a written request for transfer to the Ministry of Finance, clearly stating the reasons for requesting the transfer, accompanied by the following documents:
a) A transfer plan specifying:
- The name and address of the insurance company receiving the transfer (hereinafter referred to as the receiving company);
- The type of insurance business and the number of insurance contracts being transferred;
- The method of transferring funds, reserves, and insurance claims related to the transferred contracts;
- The expected time frame for completing the transfer;
- A detailed explanation by the receiving company regarding its financial capacity after the transfer.
b) The transfer agreement between the transferring company and the receiving company shall include the following main contents:
- The object of the transfer;
- The expected time frame for completing the transfer;
- The rights and obligations of the parties involved in the transfer;
- The method of resolving disputes.
c) The commitment of the enterprise receiving the transfer to ensure the rights and interests of the insurance policyholder under the transferred insurance contract after the transfer takes effect.
2.2. Within fifteen days from the date on which the application for transferring the insurance contract is approved by the Ministry of Finance, the transferring enterprise must:
a) Publish a notice regarding the transfer in two central newspapers for five consecutive issues containing the following main contents:
- The name and address of the transferring insurance enterprise and the receiving insurance enterprise;
- The type of insurance business and the number of insurance contracts being transferred;
- The expected time frame for completing the transfer;
- The address for handling complaints and inquiries of the insurance policyholders related to the transfer.
b) The transferring enterprise must send a notification along with a summary of the transfer plan to each insurance policyholder immediately after the Ministry of Finance approves the application for transfer. The notification sent to the insurance policyholder must clearly state the period during which the insurance policyholder is permitted to terminate the insurance contract if they disagree with the transfer plan and the date when the transfer plan officially becomes effective.
c) The insurance policyholder is permitted to terminate the insurance contract within fifteen days from the date of receipt of the notification regarding the transfer according to the postmark. In case the insurance policyholder terminates the insurance contract, the transferring enterprise must refund the corresponding premium paid by the insurance policyholder for the remaining term of the insurance contract after deducting reasonable costs related to non-life insurance; or the premium paid by the insurance policyholder after deducting reasonable costs related to life insurance.
2.3. From the date the Ministry of Finance approves the application for transfer, the transferring enterprise may not continue to enter into new insurance contracts under the business operations that have been transferred.
2.4. Within sixty days from the date on which the Ministry of Finance approves the transfer plan, the transferring enterprise must transfer to the receiving enterprise:
a) All existing insurance contracts within the transfer plan that have been approved by the Ministry of Finance;
b) Complaint files that have not yet been resolved relating to the business operations that have been transferred;
c) All assets, funds, and reserves related to the transferred insurance contracts and complaint files that have not yet been resolved relating to the business operations that have been transferred.
3. Approval of the Application for Transferring Insurance Contracts
3.1. Within thirty days from the date of receipt of all documents for the application for transfer, the Ministry of Finance shall issue a document approving, refusing approval, or requesting amendments and supplements to the application for transfer. In case the Ministry of Finance requests amendments and supplements to the documents, within fifteen days from the date of receipt of such request, the transferring enterprise must complete the documents and resubmit them to the Ministry of Finance. Beyond this period, the Ministry of Finance has the right to refuse approval of the application for transfer. In case of refusal to approve the application for transfer, the Ministry of Finance shall explain the reasons in writing.
3.2. After approving the application for transfer, the Ministry of Finance will issue an adjustment permit (according to the form attached as Appendix 3 to this Circular) to the transferring enterprise in accordance with the insurance business operations that the transferring enterprise is still permitted to conduct.
4. Responsibilities of the Receiving Insurance Enterprise
4.1. The receiving insurance enterprise is responsible for cooperating with the transferring enterprise in developing the transfer plan, determining the value of assets related to the funds and reserves of the transferred insurance contracts, and agreeing on the effective date of the transfer plan.
4.2. From the date of receipt of the transfer, the receiving enterprise is responsible for performing the obligations of the transferred insurance contract in accordance with the terms agreed between the transferring enterprise and the insurance policyholder, including the responsibility to resolve claims that have occurred but have not yet been reported. The receiving enterprise has the right to accept assets related to the funds and reserves of the transferred insurance contract and use these assets to fulfill the obligations under the transferred insurance contract.
VIII. PREVENTION AND MITIGATION OF LOSSES
1. Insurance enterprises are allowed to allocate a percentage of the actual retained premium according to the provisions in Appendix 12 attached to this Circular to cover measures for preventing and mitigating losses as stipulated in Clause 2, Article 25 of Decree No. 42/2001/NĐ-CP dated August 1, 2001, detailing the implementation of certain provisions of the Law on Insurance Business.
2. The amount allocated for prevention and mitigation of losses can only be extracted and utilized on a per-insurance-business basis.
3. The allocation for prevention and mitigation of losses must be carried out in accordance with current regulations on financial management of enterprises and relevant laws.
IX. IMPLEMENTATION ORGANIZATION
1. This Circular takes effect from August 16, 2001.
2. The following documents shall cease to be effective from the date this Circular takes effect:
2.1. Circular No. 144/1999/TT-BTC dated December 13, 1999 of the Ministry of Finance on the commission system for life insurance.
2.2. Circular No. 78/1998/TT-BTC dated June 9, 1998 of the Ministry of Finance on reinsurance activities.
2.3. Circular No. 26/1998/TT-BTC dated March 4, 1998 of the Ministry of Finance guiding procedures for issuing Certificates of Qualification and Conditions for Engaging in Insurance Business.
2.4. Circular No. 27/1998/TT-BTC dated March 4, 1998 of the Ministry of Finance guiding insurance exploitation activities and premium management.
2.5. Circular No. 28/1998/TT-BTC dated March 4, 1998 of the Ministry of Finance on agency and cooperative insurance activities.
2.6. Circular No. 02 TC/TCNH dated January 4, 1996 of the Ministry of Finance guiding the amendment and supplementation of the commission system for insurance.
2.7. Circular No. 76 TC/TCNH dated October 25, 1995 of the Ministry of Finance on the commission system for insurance.
2.8. Decision No. 581a TC/TCNH dated July 1, 1996 of the Minister of Finance promulgating the Interim Regulations on General Provisions of Insurance Contracts.
2.9. Decision No. 927 TC/QĐ/TCNH dated August 18, 1995 of the Minister of Finance amending the scope of application of insurance rules, clauses, and premium rates.
During the implementation process, if there are difficulties or obstacles, please promptly report to the Ministry of Finance for consideration and resolution./.
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↑ Basis & documents that affect this document
Based on 5
42/2001/NĐ-CP
Nghị định số 42/2001/NĐ-CP Quy định chi tiết thi hành một số điều của Luật kinh doanh bảo hiểm.
Expired
24/2000/QH10
Luật Kinh doanh bảo hiểm số 24/2000/QH10
In effect
178/1999/NĐ-CP
Nghị định số 178/1999/NĐ-CP Về bảo đảm tiền vay của các tổ chức tín dụng
Expired
153/2003/QĐ-BTC
Quyết định số 153/2003/QĐ-BTC về việc ban hành Hệ thống chỉ tiêu giám sát doanh nghiệp bảo hiểm
Expired
150/2001/QĐ-BTC
Quyết định số 150/2001/QĐ-BTC Về việc bổ sung, sửa đổi chế độ kế toán doanh nghiệp bảo hiểm ban hành theo Quyết định số 1296 TC/QĐ/CĐKT ngày 31/12/1996
In effect
Referenced by 1
71/2001/TT-BTC
Circular No. 71/2001/TT-BTC Providing guidance on the implementation of Decree No. 42/2001/ND-CP dated August 1, 2001 of the Government on detailed regulations for the application of certain provisions of the Insurance Business Law (Content Attached)
Expired
↓ Documents affected by this document
Replaces 8
144/1999/TT-BTC
Thông tư số 144/1999/TT-BTC Quy định chế độ hoa hồng bảo hiểm nhân thọ
Expired
27/1998/TT-BTC
Thông tư số 27/1998/TT-BTC hướng dẫn hoạt động khai thác bảo hiểm và quản lý phí bảo hiểm
Expired
78/1998/TT-BTC
Thông tư số 78/1998/TT-BTC quy định về hoạt động kinh doanh bảo hiểm
Expired
28/1998/TT-BTC
Thông tư số 28/1998/TT-BTC quy định về hoạt động đại lý, cộng tác viên bảo hiểm
Expired
26/1998/TT-BTC
Thông tư số 26/1998/TT-BTC hướng dẫn thủ tục cấp giấy chứng nhận đủ tiêu chuẩn và điều kiện hoạt động kinh doanh bảo hiểm
Expired
76/TC-TCNH
Thông tư số 76/TC-TCNH Quy định chế độ hoa hồng bảo hiểm
Expired
927TC/QĐ/TCNH
Quyết định số 927TC/QĐ/TCNH Về việc sửa đổi phạm vi áp dụng các quy tắc, điều khoản, biểu phí bảo hiểm
Expired
581/a-TC-QĐ-TCNH
Quyết định số 581/a-TC-QĐ-TCNH Ban hành Quy chế tạm thời về các quy định chung của hợp đồng bảo hiểm
Expired
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Translations
This document is available in the following languages:
Tiếng Việt
Thông tư số 71/2001/TT-BTC Providing guidance on the implementation of the Decree No 42/2001/ND/CP dated 1st August 2001 of the Government on detail regulations for some articles application of insurance business law (<font color="red">Content Attached</font>)
한국어
제71/2001/TT-BTC 고시는 정부령 제42/2001/ND-CP호 2001년 8월 1일자 보험업 법률 적용에 관한 세부 규정에 대한 지침을 제공한다.
中文
通知71/2001/TT-BTC就政府2001年8月1日第42/2001/ND-CP号法令关于保险业务若干条款实施细则的具体规定提供指导（内容附后）