Joint Circular No. 86/2014/TTLT-BTC-NHNNVN guiding the activities of insurance agency for life insurance companies by credit institutions and foreign bank branches.

JOINT CIRCULAR

Guidelines on the activities of insurance agency for life insurance enterprises by credit institutions and foreign bank branches

foreign bank for life insurance enterprise

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Pursuant to the Law on Insurance Business No. 24/2000/QH10 dated December 9, 2000 and the Law Amending and Supplementing Certain Articles of the Law on Insurance Business No. 61/2010/QH12 dated November 24, 2010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

The Minister of Finance hereby promulgates this Circular amending and supplementing some articles of Circular No. 124/2012/TT-BTC dated July 30, 2012 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Insurance Business Law and Decree No. 123/2011/NĐ-CP dated December 28, 2011 of the Government detailing the implementation of certain provisions of the Law amending and supplementing some articles of the Insurance Business Law (hereinafter referred to as "Circular No. 124/2012/TT-BTC") and Circular No. 125/2012/TT-BTC dated July 30, 2012 of the Ministry of Finance guiding the financial regime for insurance companies, reinsurance companies, insurance brokerage companies and branches of foreign non-life insurance companies (hereinafter referred to as "Circular No. 125/2012/TT-BTC").

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The Minister of Finance and the Governor of the State Bank of Vietnam issue this Circular guiding the activities of insurance agency for life insurance enterprises by credit institutions and foreign bank branches.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the activities of insurance agency for life insurance enterprises by credit institutions and foreign bank branches.

Article 2. Applicability

1. Life insurance enterprises established and operating legally in Vietnam;

2. Credit institutions and foreign bank branches established and operating under the Law on Credit Institutions;

3. Organizations and individuals related to the activities of insurance agency for life insurance enterprises by credit institutions and foreign bank branches on the territory of the Socialist Republic of Vietnam.

Article 3. Contents of the activities of insurance agency for life insurance enterprises by credit institutions and foreign bank branches

The activities of insurance agency for life insurance enterprises by credit institutions and foreign bank branches include one, several, or all of the following activities:

1. Introducing customers: Credit institutions and foreign bank branches introduce customers with a need to purchase insurance so that life insurance enterprises can provide advice and offer insurance products.

3. Arranging the conclusion of insurance contracts:

a) Credit institutions and foreign bank branches offer, explain the conditions and terms of insurance products to customers;

b) Credit institutions and foreign bank branches receive and transfer information about customers who have a need to purchase insurance to life insurance enterprises for assessment and issuance of insurance contracts.

4. Collecting insurance premiums:

a) Credit institutions and foreign bank branches guide and accept insurance application files from customers;

b) For insurance application files that do not require assessment or are authorized by credit institutions and foreign bank branches to assess according to the insurance agency agreement, credit institutions and foreign bank branches issue insurance contracts or certificates of insurance to customers based on the authorization of life insurance enterprises;

c) For insurance application files that require assessment before issuing insurance contracts according to the insurance agency agreement, credit institutions and foreign bank branches transfer the files to life insurance enterprises for assessment. Life insurance enterprises issue insurance contracts or certificates of insurance to customers or authorize credit institutions and foreign bank branches to issue insurance contracts or certificates of insurance to customers.

agreement in the insurance agency agreement.

Credit institutions and foreign bank branches collect insurance premiums from customers and transfer them to life insurance enterprises according to the insurance agency agreement.

5. Arranging payment of insurance benefits when an insured event occurs:

Credit institutions and foreign bank branches assist and guide customers regarding procedures for claiming insurance benefits, receive claim forms from customers and transfer them to life insurance enterprises for assessment and issuance of payment decisions. Life insurance enterprises pay insurance benefits or authorize credit institutions and foreign bank branches to pay insurance benefits to customers.

6. Performing other activities and obligations related to the conclusion and performance of insurance contracts in accordance with insurance business laws and the authorization of life insurance enterprises.

Chapter II

SPECIFIC PROVISIONS

Article 4. Conditions for credit institutions and foreign bank branches to carry out insurance agency activities for life insurance companies

1. Being permitted by the State Bank of Vietnam to conduct insurance agency activities in the License for Establishment and Operation.

2. Signing an insurance agency contract with a life insurance company. Credit institutions and foreign bank branches must have directly involved staff who have been trained and certified as insurance agents according to the provisions of Article 11 of this Circular.

Article 5. Principles of insurance agency activities of credit institutions and foreign bank branches for life insurance companies

1. Credit institutions and foreign bank branches shall not simultaneously act as agents for another life insurance company without written approval from the life insurance company they are currently representing; shall not influence customers to purchase misleading or incomplete information insurance products; shall not encourage customers to terminate existing valid insurance contracts in any form.

2. Staff of credit institutions and foreign bank branches directly conducting insurance agency activities shall be managed under the common insurance agency system of the Vietnam Insurance Association.

3. Life insurance companies and credit institutions, foreign bank branches may link insurance products with banking products and services but must ensure that insurance contracts are concluded separately and distinctly from other contracts of credit institutions and foreign bank branches and bear independent responsibility for their own provided products and services.

Article 6. Insurance Agency Contract

1. The insurance agency contract includes the following contents:

a) Name, address, License for Establishment and Operation, legal representative or authorized person of the credit institution, foreign bank branch;

b) Name, address, License for Establishment and Operation, legal representative or authorized person of the life insurance company;

c) Effective date and term of the insurance agency contract;

d) Content and scope of agency activities authorized by the life insurance company for the credit institution, foreign bank branch to perform;

đ) Commission and other payments (if any);

e) Rights and obligations of the life insurance company;

g) Rights and obligations of the credit institution, foreign bank branch;

h) Agreement on information provision between the life insurance company and the credit institution, foreign bank branch;

i) Provisions regarding termination of the insurance agency contract;

k) Regulations on dispute resolution and jurisdiction.

2. In addition to the contents stipulated in Clause 1 of this Article, the insurance agency contract may include other contents consistent with the provisions of the law agreed upon by the life insurance company and the credit institution, foreign bank branch.

Article 7. Insurance Commission and Agency Management Expenses

1. The life insurance company pays the insurance commission to the credit institution, foreign bank branch according to the agreement in the insurance agency contract but shall not exceed the current legal limit on insurance commissions.

2. In addition to the insurance commission, the life insurance company may pay agency management expenses and other costs in accordance with the law and as agreed in the insurance agency contract.

Article 8. Rights and Obligations of Life Insurance Enterprises in Insurance Agency Activities

1. Life insurance enterprises shall exercise their rights in insurance agency activities in accordance with the provisions of Clause 1, Article 29 of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business.

2. Life insurance enterprises shall perform their obligations in insurance agency activities in accordance with the provisions of Clause 2, Article 29 of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business and the following obligations:

a) Design insurance products, calculate premiums, compute surrender values, establish reserves for business operations, and compute dividends for life insurance policyholders (if applicable) in accordance with the provisions of the Law on Insurance Business and guiding documents.

b) Notify customers in writing or by other means about the termination of the insurance agency contract with credit institutions and foreign bank branches. Life insurance enterprises shall be responsible for guiding customers who purchase insurance through credit institutions and foreign bank branches to pay regular insurance premiums, notify changes during the contract execution process, and request insurance payments.

Article 9. Rights and Obligations of Credit Institutions and Foreign Bank Branches in Insurance Agency Activities

1. Credit institutions and foreign bank branches shall exercise the rights of insurance agents in accordance with the provisions of Clause 1, Article 30 of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business.

2. Credit institutions and foreign bank branches shall perform the obligations of insurance agents in accordance with the provisions of Clause 2, Article 30 of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Law on Insurance Business and the following obligations:

a) Explain to customers that insurance products distributed through credit institutions and foreign bank branches are not products of these institutions and are not mandatory.

b) Manage and store lists of employees conducting insurance agency activities for life insurance enterprises.

c) Coordinate with life insurance enterprises to fully and accurately monitor and transfer all collected insurance premiums and any customer payments related to insurance contracts to the life insurance enterprise; pay insurance benefits and other payments to customers according to the authorization of the life insurance enterprise as agreed upon in the insurance agency contract.

d) Compensate and reimburse life insurance enterprises for any fees and expenses incurred due to violations committed by credit institution and foreign bank branch employees when performing insurance agency activities for life insurance enterprises.

Article 10. Provision and Verification of Information

1. Credit institutions and foreign bank branches must provide life insurance enterprises with the following minimum information:

a) For insurance sales activities: The name, age, gender, and contact address of customers interested in purchasing insurance.

b) For arranging the conclusion of insurance contracts: Provide and verify information related to insurance buyers and necessary information for assessing and issuing insurance contract decisions.

c) For collecting insurance premiums: A list of the number of customers from whom premiums have been collected, total premiums collected, outstanding premiums, names and addresses, and contract numbers of customers who owe premiums.

d) For arranging the payment of insurance proceeds when an insured event occurs: A list of amounts of insurance proceeds payable and claim forms for insurance payments.

e) Provide information about credit institutions, foreign bank branches, and customers to serve the design of insurance products by life insurance enterprises without violating laws on information confidentiality.

2. On a monthly basis or as agreed in the insurance agency contract, credit institutions, foreign bank branches, and life insurance enterprises shall be responsible for verifying data on new insurance contracts, premium revenue, and changes in effective insurance contracts conducted by credit institutions and foreign bank branches.

Article 11. Training of credit institution staff and foreign bank branch personnel engaged in insurance agency activities

1. Life insurance enterprises must develop training programs, cooperate with credit institutions and foreign bank branches to organize training and be responsible for issuing insurance agency certificates to credit institution and foreign bank branch staff directly engaged in insurance agency activities.

2. Life insurance enterprises and credit institutions, foreign bank branches shall agree and select training formats for basic training programs, including centralized, online or other formats as prescribed by law. For product training programs, the training format shall be centralized, except for products under life insurance business.

3. The minimum training time is four (4) hours for each insurance product and at least sixteen (16) hours for investment-linked insurance products.

4. The regular quarterly training time for credit institution and foreign bank branch staff selling unit-linked insurance products shall be a minimum of three (3) hours.

Article 12. Customer Information Confidentiality

Credit institutions, foreign bank branches, and life insurance enterprises are responsible for customer information confidentiality in accordance with the provisions of the law.

Article 13. Reporting regime

1. Quarterly, no later than the fifteenth day of the first month of the following quarter, in addition to reports required by current laws, life insurance enterprises must submit to the Ministry of Finance (Insurance Management and Supervision Department) a report on the implementation of insurance agency activities of credit institutions and foreign bank branches for life insurance enterprises in the quarter according to the form prescribed in Appendix I attached to this Circular.

2. Quarterly, credit institutions and foreign bank branches must report to the State Bank of Vietnam on the implementation of insurance agency activities for life insurance enterprises in the quarter according to the form prescribed in Appendix II attached to this Circular.

Chapter III

IMPLEMENTATION

Article 14. Responsibilities of Relevant Authorities and Units

1. Life insurance enterprises, credit institutions, foreign bank branches, and related organizations and individuals are responsible for implementing the insurance agency activities of credit institutions and foreign bank branches for life insurance enterprises in accordance with this Circular and relevant legal provisions.

2. The Ministry of Finance is responsible for supervising and managing state administration over life insurance enterprises, and the State Bank of Vietnam is responsible for supervising and managing state administration over credit institutions and foreign bank branches in their insurance agency activities for life insurance enterprises.

3. The Ministry of Finance and the State Bank of Vietnam are responsible for coordinating and exchanging information in the management and supervision of insurance agency activities of credit institutions and foreign bank branches for life insurance enterprises.

Article 15. Implementation Provisions

1. This Circular takes effect from September 1, 2014.

2. During implementation, if there are difficulties or obstacles, they should be promptly reported to the Ministry of Finance and the State Bank of Vietnam for consideration and resolution.