Circular No. 97/TC-TCCB guiding temporarily the ranking of insurance companies

CIRCULAR

Provisional Guidelines for Ranking Insurance Companies

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Implementing Decree No. 26/CP dated May 23, 1993 of the Government on the provisional wage system in enterprises; Circular No. 21/LB-TT dated June 17, 1993; Circular No. 28/LB-TT dated December 2, 1993 of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance guiding the ranking of enterprises; supplementary guidance on implementing the new wage system for workers and officials in enterprises, following the agreement of the Ministry of Labor, Invalids and Social Affairs at Document No. 4803/LĐTBXH-TL dated November 7, 1994, the Ministry of Finance provides provisional guidelines for ranking insurance companies under the Vietnam Insurance Corporation as follows:

I- CRITERIA FOR RANKING

The criteria for ranking insurance companies are defined as follows:

1. Group of management complexity indicators: (accounting for 40% of total points) including specific indicators:

a. Number of business lines implemented: This indicator is determined based on business lines that have had stable revenue for more than three years.

b. Number of newly implemented business lines: These are business lines that have been implemented for less than three years.

      c. Scope of operation divided into three levels:

      - Wide: operating within provinces and cities with numerous representatives and agents sufficiently covering the business area, having relationships with foreign customers.

      - Medium: operating within provinces and cities with stable representatives and agents in certain district and commune areas.

      - Narrow: operating within provinces without or with very few representatives and agents, with unstable operations.

      d. Number of employees: calculated based on the number of employees approved for each company.

2. Business performance indicators (accounting for 60% of total points) including the following indicators:

a. Revenue realized is the total revenue for the year in Vietnamese dong.

b. Fulfillment of obligations to the State budget in the locality including income tax, business license tax, property tax, etc., as stipulated by the General Tax Department.

      c. Business efficiency: the ratio of business lines with good efficiency (compensation ratio below 65%) out of the total number of implemented business lines.

      d. Management cost savings: the percentage of cost savings compared to the total management costs of the company.

II- SCALE OF POINTS FOR EACH INDICATOR AND THE STANDARD SCORING TABLE FOR RANKING.

1. Scale of points for each indicator:

2. Standard scoring table for ranking insurance companies

The standard scoring table for ranking insurance companies is defined as follows:

Based on the points of each criterion, the total points achieved by each company are determined to be ranked into one of four categories.

The criteria for calculating points are taken from the settled figures of the reporting year and the implementation of the planning year, up to the time of requesting the ranking of companies, with reference to the results of the two previous years.

In 1994, the figures are taken from the settled figures of 1993 and the implementation of the 1994 plan up to the time of ranking the companies, with cross-referencing to the situation of the years 1991 and 1992.

III- IMPLEMENTATION

- Based on the above ranking standards, the Vietnam Insurance Corporation calculates and determines the points for each insurance company to submit to the Ministry of Finance for review, based on which decisions are made for the companies.

- For companies ranked first (if any), the Ministry of Finance will make a decision after reaching an agreement with the Ministry of Labor, Invalids and Social Affairs.

- For companies achieving less than 30 points, not meeting the ranking criteria, the new wage system for managerial staff will be applied according to the guidance in Joint Circular No. 28/LB-TT dated December 3, 1993 of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance.

- During the implementation process, if there are any difficulties, companies are requested to report them to the Ministry for research and resolution.