Bản dịch văn bản 73/2016/ND-CP
Decree 73/2016/ND-CP
Cơ quan ban hành: Chính phủ
Ngày ban hành: 2016-07-01

DECREE Detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business _________________________ Pursuant to the June 19, 2015 Law on Organization of the Government; Pursuant to the December 9, 2000 Law on Insurance Business; Pursuant to the November 24, 2010 Law Amending and Supplementing a Number of Articles of the Law on Insurance Business; Pursuant to the November 26, 2014 Law on Investment; Pursuant to the November 26, 2014 Law on Enterprises; At the proposal of the Minister of Finance, The Government promulgates the Decree detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business. Chapter I GENERAL PROVISIONS Article 1. Scope and subjects of application 1. This Decree details and guides the implementation of a number of articles of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, including: a/ The establishment and operation of life insurance businesses, non-life insurance businesses, health insurance businesses and reinsurance businesses (below collectively referred to as insurance businesses), branches of foreign non-life insurance businesses (below referred to as foreign branches), insurance brokerage businesses, insurance agents, cross-border insurance service providers, representative offices of foreign insurance businesses or insurance brokerage businesses, and funds for the protection of the insured; b/ The financial management regime applicable to insurance businesses, foreign branches and insurance brokerage businesses. 2. This Decree applies to: a/ Insurance businesses; b/ Foreign branches; c/ Insurance brokerage businesses and insurance agents; d/ Other related organizations and individuals. Article 2. Policies to develop the insurance market 1. To develop a comprehensive, secure and sound insurance market with a view to meeting the insurance demand of the economy and population; to ensure enjoyment of international-standard insurance products for organizations and individuals; to create an equal business regulatory environment so as to bring into the fullest play resources of all economic sectors, raise the competitiveness of the insurance industry and meet the requirements of international economic integration. 2. The State shall create favorable conditions for insurance businesses, foreign branches and insurance brokerage businesses in the research and development of insurance products, and encourage organizations and individuals to participate in insurance. 3. The State shall create conditions for the Association of Vietnamese Insurers and socio-professional organizations to enhance their self-management role in the insurance field; and ensure fair competition for the sake of lawful rights and interests of organizations and individuals participating in insurance. Article 3. Principles of participation in insurance and provision of insurance services in Vietnam 1. An organization or individual that wishes to carry out insurance, reinsurance or insurance brokerage business activities in Vietnam shall apply for an establishment and operation license (below referred to as license) from the Ministry of Finance or must meet the conditions on provision of cross-border insurance services prescribed in Clause 1, Article 90, and Article 91, of this Decree. 2. An organization or individual that wishes to participate in insurance has the right to choose an insurance business and may only participate in insurance at an insurance business or a foreign branch licensed to operate in Vietnam, unless it/he/she uses cross-border insurance services prescribed in Clauses 2 and 3, Article 90 of this Decree. No organization or individual may illegally interfere in an insurance buyer’s right to choose an insurance business or a foreign branch. Article 4. Insurance operations and products 1. Life insurance covers the operations prescribed in Clause 1, Article 7 of the Law on Insurance Business and in Clause 3, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business. 2. Non-life insurance covers the operations prescribed in Clause 2, Article 7 of the Law on Insurance Business and in Clause 3, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, and the guarantee insurance operation. Guarantee insurance means an insurance business activity whereby an insurance business or a foreign branch assumes the risks of the guaranteed on the basis that the guaranteed pays insurance premiums to the insurance business or foreign branch for the latter to perform an obligation on behalf of the guaranteed in case the guaranteed fails to perform or improperly performs the obligation when it becomes due. The guaranteed shall acknowledge the debt and repay it to the insurance business or foreign branch as agreed in the insurance contract. The parties may agree that the insurance business or foreign branch shall only perform the obligation when the guaranteed is unable to perform its/his/her obligation. 3. Health insurance covers the operations prescribed in Clause 3, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business. 4. An insurance business may only provide insurance products of the insurance operations stated in its license and must meet the business conditions prescribed in this Decree. Article 5. Compulsory insurance 1. Insurance businesses and foreign branches licensed to provide compulsory insurance may not refuse to sell compulsory insurance in case the subject matter of insurance has fully satisfied the conditions for purchase of compulsory insurance as prescribed by law. 2. Organizations and individuals covered by compulsory insurance are obliged to participate in compulsory insurance in accordance with law. Chapter II ESTABLISHMENT AND OPERATION LICENSES OF INSURANCE BUSINESSES, FOREIGN BRANCHES OR INSURANCE BROKERAGE BUSINESSES Section 1 ESTABLISHMENT AND OPERATION LICENSES Article 6. General conditions for grant of establishment and operation licenses of insurance businesses, foreign branches or insurance brokerage businesses 1. For a capital-contributing organization or individual: An organization or individual that wishes to contribute capital to establish an insurance business or insurance brokerage business must meet the following conditions: a/ Not falling into the cases prescribed in Clause 2, Article 18 of the Law on Enterprises; b/ Contributing capital in cash, which must not be a loan or investment capital entrusted by another organization or individual; c/ An organization that wishes to contribute a capital amount representing 10% or more of the charter capital must have conducted profitable business for 3 consecutive years preceding the year of submission of a dossier of application for a license and have no accumulated loss by the time of submission of the dossier; d/ An organization that conducts a business line requiring legal capital shall ensure that its equity minus the legal capital at least equals the to-be-contributed capital amount; dd/ For an insurance business, an insurance brokerage business, a commercial bank, a financial company or a securities company, such organization must maintain and satisfy the conditions on financial safety and obtain a competent agency’s permission for making capital contribution under relevant specialized law. 2. For a to-be-established insurance business, foreign branch or insurance brokerage business: a/ Its paid-in charter capital (for an insurance business or insurance brokerage business) or allocated capital (for a foreign branch) must not be lower than the legal capital level prescribed in Article 10 of this Decree; b/ Its corporate type and charter (for an insurance business or insurance brokerage business) or organization and operation regulation (for a foreign branch) must comply with this Decree and relevant regulations; c/ Its tentative managers and executive officers must satisfy the conditions prescribed in this Decree. 3. Having a dossier of application for a license as prescribed in this Decree. Article 7. Conditions for establishment of insurance businesses 1. Conditions for the establishment of an insurance limited liability company: In addition to the general conditions prescribed in Article 6 of this Decree, a member that wishes to contribute capital for the establishment of an insurance limited liability company must be an organization and meet the following conditions: a/ For a foreign organization: - Being a foreign insurance business that has been permitted by a competent foreign agency to operate in the business line expected to be conducted in Vietnam, or being a subsidiary of a foreign insurance business which specializes in making offshore investment and is authorized by the foreign insurance business to contribute capital to establish an insurance business in Vietnam; - Having operated for at least 10 years in the business line expected to be conducted in Vietnam; - Having total assets worth at least USD 2 billion in the year preceding the year of submission of a dossier of application for a license; - Having not committed any serious violation of the regulations on insurance business and other regulations of the country where the organization’s head office is located for 3 consecutive years preceding the year of submission of a dossier of application for a license. b/ For a Vietnamese organization: - Being an enterprise operating in the field of finance, banking or insurance; - Having total assets worth at least VND 2 trillion in the year preceding the year of submission of a dossier of application for a license. 2. Conditions for establishment of an insurance joint-stock company: In addition to the general conditions prescribed in Article 6 of this Decree, a to-be-established insurance joint-stock company must meet the following conditions: a/ Having at least 2 institutional founding shareholders that meet the conditions prescribed in Clause 1, Article 7 of this Decree and jointly hold at least 20% of shares of the to-be-established company; b/ Within 3 years after the company obtains a license, the founding shareholders must jointly hold at least 50% of the company’s ordinary shares eligible to be sold. Article 8. Conditions for establishment of a foreign branch 1. A foreign branch must be a dependent unit of a foreign non-life insurance business, have no legal person status, and receive the guarantee from the foreign non-life insurance business that it will take responsibility for all obligations and commitments of the branch in Vietnam. 2. A foreign non-life insurance business that wishes to establish a branch in Vietnam must meet the following conditions: a/ The conditions prescribed at Point a, Clause 1, Article 7 of this Decree; b/ Its head office is located in a country that has signed with Vietnam treaties on trade containing an agreement on establishment of branches of foreign non-life insurance businesses in Vietnam; c/ It has obtained permission from a state management agency in charge of insurance in the country where its head office is located to establish a branch in Vietnam to operate within the scope of its licensed insurance operations, is not subject to any restriction on addition of capital to a branch in Vietnam, and guarantees that all of its activities are supervised; d/ The state management agency in charge of insurance in the country where its head office is located has signed a cooperation agreement on management and supervision of activities of foreign branches with the Ministry of Finance of Vietnam; dd/ It has a written commitment to taking responsibility for all obligations and commitments of its branch in Vietnam and a written authorization for the branch’s director to bear responsibility before Vietnam’s law for all activities of the branch; e/ The capital used for establishing the branch is from a lawful source, which must not be a loan or entrusted investment capital in any form; g/ It has made profit for 3 consecutive years preceding the year of submission of a dossier of application for a license and has no accumulated loss by the time of submission of the dossier. Article 9. Conditions for establishment of an insurance brokerage business 1. A Vietnamese organization or individual that wishes to contribute capital to establish an insurance brokerage business must meet the conditions prescribed in Article 6 of this Decree. 2. A foreign organization that wishes to contribute capital to establish an insurance brokerage business must meet the conditions prescribed in Article 6 of this Decree and the following conditions: a/ Being a foreign insurance brokerage business that has been permitted by a foreign competent agency to conduct insurance brokerage business in Vietnam; b/ Having operated for at least 10 years in insurance brokerage; c/ Having not committed any serious violation of the regulations on insurance brokerage and other regulations of the country where the organization’s head office is located for 3 consecutive years preceding the year of submission of a dossier of application for a license. Article 10. Legal capital of insurance businesses, foreign branches or insurance brokerage businesses 1. Legal capital level of a non-life insurance business: a/ VND 300 billion, if it provides non-life insurance (except the cases prescribed at Points b and c of this Clause) and health insurance; b/ VND 350 billion, if it provides the insurance according to Point a of this Clause and aviation insurance or satellite insurance; c/ VND 400 billion, if it provides the insurance according to Point a of this Clause, aviation insurance and satellite insurance. 2. Legal capital level of a life insurance business: a/ VND 600 billion, if it provides life insurance (except unit-linked insurance and pension insurance) and health insurance; b/ VND 800 billion, if it provides the insurance according to Point a of this Clause and unit-linked insurance or pension insurance; c/ VND 1 trillion, if it provides the insurance according to Point a of this Clause, unit-linked insurance or pension insurance. 3. Legal capital level of a health insurance business: VND 300 billion. 4. Legal capital level of a foreign branch: a/ VND 200 billion, if it provides non-life insurance (except the cases prescribed at Points b and c of this Clause) and health insurance; b/ VND 250 billion, if it provides the insurance according to Point a of this Clause and aviation insurance or satellite insurance; c/ VND 300 billion, if it provides the insurance according to Point a of this Clause, aviation insurance and satellite insurance. 5. Legal capital level of a reinsurance business: a/ VND 400 billion, if it provides non-life reinsurance or both non-life reinsurance and health reinsurance; b/ VND 700 billion, if it provides life reinsurance or both life reinsurance and health reinsurance; c/ VND 1.1 trillion, if it provides life reinsurance, non-life reinsurance and health reinsurance. 6. Legal capital level of an insurance brokerage business: a/ VND 4 billion, if it engages in primary insurance brokerage or reinsurance brokerage; b/ VND 8 billion, if it engages in primary insurance brokerage and reinsurance brokerage. Article 11. Dossier of application for an establishment and operation license of an insurance limited liability company 1. An application for a license, made according to a form provided by the Ministry of Finance. 2. The draft charter of the company as prescribed in Article 25 of the Law on Enterprises. 3. A plan on the first 5 years’ operation suitable to the business field to be licensed, clearly stating the target market, distribution channel, method of setting aside technical reserves, reinsurance program, capital investment, business efficiency, and solvency of the insurance company. 4. A copy of the citizen or people’s identity card, passport or another lawful personal identification paper; judicial record, resumes and copies of diplomas and certificates of the persons expected to be appointed as company president or chairperson of the Members’ Council, director general, actuary or valuation and solvency actuary, and chief accountant of the insurance company. 5. A list of founding members or members whose capital contribution makes up 10% or more of the charter capital, enclosed with: a/ A copy of the establishment decision, business registration certificate or another equivalent paper; b/ The company charter; c/ A decision of a competent person or body of the capital-contributing organization on this organization’s contribution of capital to establish the insurance company; d/ The power of attorney and a copy of the citizen or people’s identity card, passport or another personal identification paper of the authorized representative of the capital-contributing organization; dd/ Audited financial statements of 3 consecutive years preceding the year of submission of the dossier. In case a foreign insurance business authorizes its subsidiary to contribute capital for establishing an insurance business in Vietnam, the financial statement of such subsidiary is also required; e/ The foreign insurance business’s power of attorney for its subsidiary specializing in making offshore investment and its commitment to take joint responsibility with the subsidiary for the capital contribution and obligation to establish an insurance business in Vietnam (in case a foreign insurance business authorizes its subsidiary specializing in making offshore investment to establish an insurance business in Vietnam). 6. Rules, terms and premium rates for to-be-launched insurance products. 7. Certification by a bank licensed to operate in Vietnam of the charter capital amount deposited at a blocked account opened at the bank. 8. The cooperation contract as prescribed in Article 19 of the Law on Enterprises (in case a domestic organization and a foreign organization jointly contribute capital to establish a limited liability company with 2 or more members). 9. A minutes of the meeting of capital contributors (for a dossier of request for establishment of a limited liability company with 2 or more members) which records: a/ Their agreement to contribute capital for the establishment of an insurance company, together with a list of founding members or members whose capital contribution makes up 10% or more of the charter capital; b/ Their adoption of the draft charter of the company. 10. A document of a competent authority of the country where the capital-contributing foreign organization’s head office is located which certifies that: a/ The foreign organization is permitted to establish insurance businesses in Vietnam. If such permission is not required by such country, there should be proof of such non-requirement; b/ The foreign organization is conducting the business lines expected to be conducted in Vietnam; c/ The foreign organization is in a sound financial state and fully meets the management requirements in the country where its head office is located; d/ The foreign organization has not committed any serious violation of the regulations on insurance business and other regulations of the country where its head office is located for 3 consecutive years preceding the year of submission of the dossier. 11. A competent state agency’s document stating that the capital-contributing Vietnamese organization meets the conditions on financial safety and is permitted to contribute capital to establish insurance businesses under relevant specialized law. 12. The written commitments of capital contributors on their satisfaction of the licensing conditions prescribed in Clause 1, Article 7 of this Decree. 13. The written authorization for an individual or organization to carry out licensing procedures on behalf of the capital contributors. Article 12. Dossier of application for an establishment and operation license of an insurance joint-stock company 1. An application for a license, made according to a form provided by the Ministry of Finance. 2. The draft charter of the company as prescribed in Article 25 of the Law on Enterprises. 3. A plan on the first 5 years’ operation suitable to the business field to be licensed, clearly stating the target market, distribution channel, method of setting aside technical reserves, reinsurance program, capital investment, business efficiency, and solvency of the insurance company. 4. A copy of the citizen or people’s identity card, passport or another lawful personal identification paper; judicial record, resumes and copies of diplomas and certificates of the persons expected to be appointed as chairperson of the Board of Directors, director general, actuary or valuation and solvency actuary, and chief accountant of the insurance company. 5. A list of founding shareholders, enclosed with the following papers: a/ For an individual: - A copy of the citizen or people’s identity card, passport or another lawful personal identification paper; and a judicial record made according to a form prescribed by law; - A bank’s certification of his/her deposit balance in Vietnam dong or a freely convertible currency. b/ For an organization: - A copy of the establishment decision, business registration certificate or another equivalent paper; for a foreign organization, this copy must be consularly legalized; - The company charter; - A decision of a competent person or body of the capital-contributing organization on this organization’s contribution of capital to establish the insurance company; - A power of attorney and a copy of the citizen or people’s identity card, passport or another personal identification paper of the authorized representative of the capital-contributing organization; - Audited financial statements of 3 consecutive years preceding the year of submission of the dossier. 6. Rules, terms and premium rates for to-be-launched insurance products. 7. Certification by a bank licensed to operate in Vietnam of the charter capital amount deposited at a blocked account opened at the bank. 8. A minutes of the meeting of shareholders which records: a/ Their agreement to contribute capital for establishing the insurance company, together with a list of founding shareholders; b/ Their adoption of the draft charter of the company. 9. The written authorization for an individual or organization to carry out licensing procedures on behalf of the shareholders. 10. A competent state agency’s document stating that the capital-contributing Vietnamese organization meets the conditions on financial safety and is permitted to contribute capital for establishing insurance businesses under relevant specialized law. 11. In case the foreign organization is an insurance business, there must be a document of a competent authority of the country where its head office is located, which certifies that: a/ The foreign insurance business is permitted to establish insurance businesses in Vietnam. If such permission is not required by such country, there must be proof of such non-requirement; b/ The foreign insurance business is operating in the field of expected operation in Vietnam; c/ The foreign insurance business is in a sound financial state and fully meets the management requirements in the country where its head office is located; d/ The foreign insurance business has not committed any serious violation of the regulations on insurance business and other regulations of the country where its head office is located for 3 consecutive years preceding the year of submission of the dossier. 12. The written commitments of the shareholders on their satisfaction of the licensing conditions prescribed in Clause 2, Article 7 of this Decree. Article 13. Dossier of application for an establishment and operation license of a foreign branch 1. An application for a license, made according to a form provided by the Ministry of Finance. 2. The draft Regulation on organization and operation of the foreign branch, already approved by the foreign non-life insurance business. 3. A plan on the first 5 years’ operation suitable to the business field to be licensed, clearly stating the method of setting aside technical reserves, reinsurance program, capital investment, business efficiency, and solvency of the foreign branch. 4. A copy of the citizen or people’s identity card, passport or another lawful personal identification paper; judicial record, resumes and copies of diplomas and certificates of the persons expected to be appointed as director, valuation and solvency actuary, and chief accountant of the foreign branch. 5. Documents on the foreign non-life insurance business: a/ A copy of the establishment decision, business registration certificate or another equivalent paper, which is certified by the agency at which the foreign non-life insurance business has registered itself within 3 months before the date of submission of the dossier; b/ The company charter; c/ A decision of a competent person or body of the foreign non-life insurance business on the establishment of a branch in Vietnam; d/ The power of attorney and a copy of the citizen or people’s identity card, passport or another personal identification paper of the authorized representative of the foreign non-life insurance business; dd/ Audited financial statements of 3 consecutive years preceding the year of submission of the dossier. 6. Rules, terms and premium rates for to-be-launched insurance products. 7. Certification by a bank licensed to operate in Vietnam of the allocated capital amount deposited at a blocked account opened at the bank. 8. A document of the state management agency in charge of insurance of the country where the foreign non-life insurance business’s head office is located, which certifies that: a/ The foreign non-life insurance business is permitted to establish branches in Vietnam. If such permission is not required by such country, there must be proof of such non-requirement; b/ The foreign non-life insurance business is operating the field of expected operation in Vietnam; c/ The foreign non-life insurance business is in a sound financial state and fully meets the management requirements in the country where its head office is located; d/ The foreign non-life insurance business has not committed any serious violation of the regulations on insurance business and other regulations of the country where its head office is located for 3 consecutive years preceding the year of submission of the dossier. 9. A written commitment of the foreign non-life insurance business on its satisfaction of the conditions prescribed in Clause 2, Article 8 of this Decree. Article 14. Dossier of application for an establishment and operation license of an insurance brokerage business 1. An application for a license, made according to a form provided by the Ministry of Finance. 2. The draft charter of the company as prescribed in Article 25 of the Law on Enterprises. 3. A plan on the first 5 years’ operation suitable to the business field to be licensed, clearly stating the capital investment activity and business efficiency of the establishment of an insurance brokerage business. 4. A copy of the citizen or people’s identity card, passport or another lawful personal identification paper; judicial record, resumes, and copies of diplomas and certificates of the persons expected to be appointed as company president, chairperson of the Members’ Council or chairperson of the Board of Directors, director general, and chief accountant of the insurance brokerage business. 5. A list of founding shareholders (or members) or members whose capital contribution makes up 10% or more of the charter capital, enclosed with the following papers: a/ For an individual: - A copy of the citizen or people’s identity card, passport or another lawful personal identification paper; and a judicial record made according to a form prescribed by law; - A bank’s certification of his/her deposit balance in Vietnam dong or a freely convertible currency. b/ For an organization: - A copy of the establishment decision, business registration certificate or another equivalent paper. For a foreign organization, a copy of the business registration certificate shall be certified by the agency with which such organization has registered its operation within 3 months before the date of submission of the dossier; - The company charter; - A decision of a competent person or body of the capital-contributing organization on its contribution of capital to establish an insurance brokerage business in Vietnam; - The power of attorney and a copy of the citizen or people’s identity card, passport or another personal identification paper of the authorized representative of the capital-contributing organization; - Audited financial statements of 3 consecutive years preceding the year of submission of the dossier; - A competent state agency’s written certification that the capital-contributing Vietnamese organization satisfies the conditions on financial safety and is permitted to contribute capital for establishing an insurance brokerage business under relevant specialized law. 6. Certification by a bank licensed to operate in Vietnam of the charter capital amount deposited at a blocked account opened at the bank. 7. The cooperation contract prescribed in Article 19 of the Law on Enterprises (in case a domestic organization and a foreign organization jointly contribute capital to establish a limited liability company with 2 or more members). 8. A minutes of the meeting of founding members or shareholders, which records: a/ Their agreement to contribute capital for establishing the insurance brokerage limited liability company or joint-stock company, together with a list of founding members or shareholders or members whose capital contribution makes up 10% more of the charter capital; b/ Their adoption of the draft charter of the company. 9. The written authorization for a capital-contributing individual or organization to carry out licensing procedures on behalf of the founding shareholders or capital-contributing members. 10. A document of a competent authority of the country where the insurance brokerage business’s head office is located, which certifies that: a/ The foreign insurance brokerage business is permitted to establish insurance brokerage businesses in Vietnam. If such permission is not required by this country, there must be proof of such non-requirement; b/ The foreign insurance brokerage business is operating in the field of insurance brokerage; c/ The foreign insurance brokerage business has not committed any serious violation of the regulations on insurance brokerage business and other regulations of the country where its head office is located for 3 consecutive years preceding the year of submission of the dossier 11. The written commitments of the capital-contributing organizations or individuals on their satisfaction of the licensing conditions prescribed in Article 9 of this Decree. Article 15. Procedures for grant of an establishment and operation license 1. A dossier of application for a license shall be made in 3 sets, including 1 original set and 2 photocopied sets. For a foreign applicant, such a dossier shall be made in two sets, one in Vietnamese and the other in English. Documents in a dossier that bear the signature, title and seal of a foreign country shall be consularly legalized. Copies of Vietnamese-language documents and Vietnamese translations of foreign-language documents shall be certified by a Vietnamese notary office under the law on notarization. The applicant shall take responsibility for the accuracy of the dossier. 2. Within 21 working days after receiving a dossier of application for a license, if seeing that the dossier is incomplete and invalid, the Ministry of Finance shall issue a written notice to request supplementation and modification of the dossier. The time limit for supplementation and modification of a dossier is 6 months from the date of issuance of the notice. If a dossier is not supplemented and modified within this time limit, the Ministry of Finance shall issue a written refusal to consider granting a license. 3. Within 60 days after receiving a complete and valid dossier, the Ministry of Finance shall grant a license to an insurance business, a foreign branch or an insurance brokerage business, or, if refusing to grant a license, issue a document on its refusal and the reason therefor. The Ministry of Finance may refuse to grant a license only when the capital-contributing organization or individual or the to-be-established insurance business, foreign branch or insurance brokerage business fails to fully satisfy the licensing conditions prescribed in this Decree. Article 16. Procedures to be carried out after an insurance business, a foreign branch or an insurance brokerage business obtains an establishment and operation license 1. Within 30 days after obtaining a license, an insurance business, a foreign branch or an insurance brokerage business shall announce the following major details on a daily for 5 consecutive issues: a/ Names and addresses of the head office, branch and representative office of the insurance business or insurance brokerage business; or name and address of the foreign branch; b/ Contents, scope and duration of operation; c/ Charter capital level and paid-in charter capital amount of the insurance business or insurance brokerage business; or allocated capital of the foreign branch; d/ Full name of the at-law representative of the insurance business, foreign branch or insurance brokerage business; dd/ Serial number and date of grant of the license; e/ Licensed insurance or insurance brokerage operations. 2. Within 60 days after obtaining a license, an insurance business or a foreign branch shall deposit part of the contributed charter capital or allocated capital at a commercial bank operating in Vietnam. Such deposit must equal 2% of the legal capital level prescribed in Article 10 of this Decree. 3. Within 12 months after obtaining a license, an insurance business, a foreign branch or an insurance brokerage business shall complete the following procedures for its official operation: a/ Converting the capital amount deposited at a blocked account into the charter capital (or allocated capital); b/ Registering its specimen seal and tax identification number and opening a bank account under law; c/ Establishing a system of information technology infrastructure, equipment and software that meets the requirements on corporate governance and state management of insurance business; d/ Carrying out procedures to request the Ministry of Finance to approve the method of setting aside technical reserves, and approve and register insurance products (for insurance businesses and foreign branches), or approve the managerial and executive titles; dd/ Issuing processes for operation, assessment, compensation, internal control, management of finance and investment, and management of reinsurance programs (for insurance businesses and foreign branches). 4. Past 12 months after obtaining a license, if an insurance business, a foreign branch or an insurance brokerage business fails to complete the procedures prescribed in Clause 3 of this Article in order to commence operation, the Ministry of Finance shall withdraw the granted license. 5. During operation, an insurance business, a foreign branch or an insurance brokerage business shall announce in accordance with Clause 1 of this Article any change subject to approval by the Ministry of Finance as prescribed in Clause 1, Article 69 of the Law on Insurance Business and Clause 9, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business. Section 2 CHANGE OF CONTENTS OF ESTABLISHMENT AND OPERATION LICENSES OF INSURANCE BUSINESSES, FOREIGN BRANCHES OR INSURANCE BROKERAGE BUSINESSES Article 17. Renaming of insurance businesses, foreign branches or insurance brokerage businesses 1. A dossier for renaming of an insurance business, a foreign branch or an insurance brokerage business must comprise: a/ A written request for renaming of the business or branch, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the renaming of the business or branch. 2. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 18. Change of charter capital or allocated capital 1. A dossier of request for the Ministry of Finance’s in-principle approval of the increase of charter capital (for insurance businesses or insurance brokerage businesses) or of allocated capital (for foreign branches) must comprise: a/ A written request for change of the charter capital or allocated capital, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the increase of the charter capital (or allocated capital), stating the increased capital amount, and the method and time of increase; c/ A plan on raising and use of charter capital or allocated capital; d/ A list of shareholders (or members) expected to hold 10% or more of the charter capital of an insurance business or insurance brokerage business after the capital increase; papers proving that these shareholders (or members) satisfy the conditions prescribed in Article 7, 8 or 9 of this Decree. This provision does not apply to shareholders (or members) that already hold 10% or more of the charter capital of an insurance business or insurance brokerage business before the capital increase, and does not apply in the case of increasing the charter capital through public offering of shares or offering of shares of public listed joint-stock companies. 2. A dossier of request for the Ministry of Finance’s in-principle approval of the decrease of charter capital (for insurance businesses or insurance brokerage businesses) or allocated capital (for foreign branches) must comprise: a/ A written request for change of the charter capital or allocated capital, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the decrease of the charter capital or allocated capital, stating the decreased amount and method and time of decrease; c/ A plan on the decrease of the charter capital or allocated capital, which must prove that the insurance business, foreign branch or insurance brokerage business fully meets the financial requirements prescribed in this Decree. 3. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written in-principle approval or a written refusal clearly stating the reason. 4. In case of increase of charter capital through public offering of shares or offering of shares of public listed joint-stock companies, after obtaining the Ministry of Finance’s in-principle approval, an insurance business or insurance brokerage business shall issue shares in accordance with the Law on Securities. 5. Within 6 months after obtaining the Ministry of Finance’s in-principle approval of the request for change of its charter capital or allocated capital, an insurance business, a foreign branch or an insurance brokerage business shall complete the change of the capital and submit to the Ministry of Finance a dossier comprising: a/ A brief report on the result of the change of the charter capital (or allocated capital) compared to the capital change plan approved by the Ministry of Finance; b/ A bank’s certification that shareholders (or capital-contributing members) have fully paid the increased capital amount to the insurance business or insurance brokerage business, or that the foreign non-life insurance business has fully allocated the increased capital amount to the foreign branch into a blocked account (in case of capital increase); c/ Proof that the insurance business or insurance brokerage business has completed the payment to its shareholders (or capital-contributing members) or that the foreign branch has fully returned the decreased amount to the foreign non-life insurance business (in case of capital decrease); d/ The documents mentioned at Point d, Clause 1 of this Article, in case of increase of charter capital through public offering of shares or offering of shares of public listed joint-stock companies. 6. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 7. Within 6 months after obtaining the Ministry of Finance’s in-principle approval of its request for change of the charter capital or allocated capital, if an insurance business, a foreign branch or an insurance brokerage business is unable to implement the approved plan on change of the capital level, it shall report a remedial plan to the Ministry of Finance. 8. Single-member limited liability companies may not decrease their charter capital. Article 19. Opening or termination of operation of branches, representative offices or business locations 1. An insurance business or insurance brokerage business that wishes to open a branch or representative office or to transform a representative office into a branch must satisfy the following conditions: a/ Its equity at the time of making the latest financial statement is not lower than the legal capital level prescribed in Article 10 of this Decree; b/ It complies with regulations on solvency margin; c/ It has not been administratively sanctioned in the field of insurance business with an aggregate fine of VND 400 million or more within 12 months by the time of submission of a dossier of request for opening of its branch or representative office; d/ It has an organization and operation regulation for its branch or representative office, and has proof of its right to use the location of its branch or representative office; dd/ The director of its branch or head of the representative office satisfies the conditions prescribed in Article 29 of this Decree; e/ It has a dossier of request for opening of its branch or representative office or for transformation of its representative office into a branch as prescribed in Clause 2 of this Article. 2. A dossier of request for opening of a branch or representative office or for transformation of a representative office into a branch must comprise: a/ A written request for opening of a branch or representative office, made according to a form provided by the Ministry of Finance; b/ The draft regulation on organization and operation of the branch or representative office as prescribed by law; c/ Proof of the insurance business or insurance brokerage business’s compliance with the provisions on equity and solvency margin at Points a and b, Clause 1 of this Article; d/ A judicial record, a copy of the citizen or people’s identity card, passport or another lawful personal identification paper, resumes, copies of diplomas and certificates proving the qualifications and experience of the person expected to be appointed as director of the branch or head of the representative office; dd/ Proof of the right to use the location of the branch or representative office; e/ A document of a competent person or body as stated in the company charter on the establishment of the branch or representative office. 3. An insurance business or insurance brokerage business that wishes to terminate the operation of its branch or representative office must meet the following conditions: a/ It has a dossier of request for termination of the operation of its branch or representative office as prescribed in Clause 4 of this Article; b/ The termination of the operation of its branch or representative office causes no harm to its current obligations toward the State and interests of insurance buyers and other related subjects. 4. A dossier of request for termination of the operation of a branch or representative office must comprise: a/ A written request for termination of the operation of a branch or representative office, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter on the termination of the operation of the branch or representative office; c/ A report on the operation of the branch or representative office over the last 3 years, or a report on the operation of the branch or representative office since it commenced operation if it has operated for less than 3 years; d/ A report on responsibilities, arising problems and solutions upon the termination of the operation of the branch or representative office. 5. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 6. An insurance business, a foreign branch or an insurance brokerage business may itself decide to establish, or terminate the operation of, a business location. Within 10 working days after deciding to establish, or terminate the operation of, a business location, an insurance business, a foreign branch or an insurance brokerage business shall send a notice to the Ministry of Finance. A notice of the establishment of a business location must state: a/ Name and address of the business location; b/ Operations of the business location; c/ Full name, place of residence, and a copy of the citizen or people’s identity card, passport or another lawful personal identification paper of the head of the business location. 7. If wishing to open, or terminate the operation of, an overseas branch or representative office, an insurance business, a foreign branch or an insurance brokerage business shall comply with Clauses 1, 2, 3 and 4 of this Article and with the law on offshore investment. Article 20. Relocation of head offices, branches, representative offices or business locations 1. A dossier of request for relocation of the head office or a branch or representative office must comprise: a/ A written request for relocation of the head office or a branch or representative office, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the relocation of the head office or a branch or representative office; c/ Proof of the right to use the location of the head office or a branch or representative office. 2. Within 7 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 3. Within 10 working days after the date of relocation of its business location, an insurance business, a foreign branch or an insurance brokerage business shall notify in writing such relocation to the Ministry of Finance. Article 21. Change of contents, scope and duration of operation 1. An insurance business, a foreign branch or an insurance brokerage business that wishes to expand the contents, scope and duration of operation stated in its license must meet the following conditions: a/ The conditions prescribed at Points a, b and c, Clause 1, Article 19 of this Decree; b/ The head of the insurance operation division who needs approval from the Ministry of Finance satisfies the criteria prescribed in Article 30 of this Decree; c/ In case of providing pension insurance: - Having a solvency margin at least VND 300 billion higher than the minimum solvency margin; - Using at least VND 200 billion from its equity to establish a voluntary pension fund; - Having an information technology system to monitor and manage details of every transaction on each pension insurance account; - Having at least 5 employees directly managing the voluntary pension fund, each having at least 5 years’ experience in managing the pension fund or policyholder fund. d/ In case of providing unit-linked insurance: - Having a solvency margin at least VND 200 billion higher than the minimum solvency margin; - Having an appropriate information technology system to prudently and effectively manage and control unit-linked funds; - Being capable of objectively and accurately valuing assets and units of unit-linked funds at least once a week, and publicizing buying and selling prices of units of the funds to insurance buyers. dd/ In case of providing universal life insurance: - Having a solvency margin at least VND 100 billion higher than the minimum solvency margin; - Having an appropriate information technology system to prudently and effectively manage and control universal life funds. e/ In case of providing insurance products prescribed by the Government or decided by the Prime Minister, relevant guiding documents must be complied with. 2. An insurance business, a foreign branch or an insurance brokerage business that wishes to narrow the contents, scope or duration of operation stated in its license shall ensure that such narrowing does not cause any damage to its current obligations toward the State or to the interests of insurance buyers and other related subjects. 3. A dossier of request for change of the contents, scope or duration of operation must comprise: a/ A written request for change of the contents, scope or duration of operation, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the change of the contents, scope or duration of operation; c/ Rules, terms and premium rates of a new insurance product (if any), in case of request for increase of the contents or scope of operation; d/ Documents proving that the insurance business, foreign branch or insurance brokerage business satisfies the conditions prescribed in Clause 1 of this Article, in case of expansion of the contents, scope or duration of operation; dd/ A report of the insurance business, foreign branch or insurance brokerage business on responsibilities, arising problems and solutions upon the narrowing of the contents and scope of operation. 4. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 22. Division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts 1. The division, splitting, consolidation, merger or transformation, or the transfer of shares or contributed capital amounts, of an insurance business, a foreign branch or an insurance brokerage business must: a/ Cause no damage to lawful rights and interests of insurance buyers, employees and the State; b/ Comply with relevant laws; c/ Obtain the written approval from the Ministry of Finance (not applicable in the case of transfer of less than 10% of the charter capital); d/ Organizations or individuals expected to contribute capital to the insurance business, foreign branch or insurance brokerage business after the division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts must respectively satisfy the conditions prescribed in Article 7, 8 or 9 of this Decree; dd/ The insurance business, foreign branch or insurance brokerage business established after the division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts must respectively satisfy the conditions prescribed in Article 7, 8 or 9 of this Decree. 2. A dossier of request for division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts accounting for 10% or more of the charter capital must comprise: a/ A written request for division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts, made according to a form provided by the Ministry of Finance; b/ The written approval of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts; c/ A report on the plan to share benefits and handle insurance contracts still in effect, debt obligation, obligations toward the State, commitments to employees upon the division, splitting, consolidation, merger, purchase, sale, transformation, or transfer of shares or contributed capital amounts of the insurance business, foreign branch or insurance brokerage business; d/ A list of shareholders (or capital-contributing members), the charter capital and the structure of the charter capital of the insurance business, foreign branch or insurance brokerage business established after the division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts; dd/ A notarized copy of the in-principal contract on the consolidation, merger or transfer (unless the insurance business is a public listed joint-stock company); e/ Opinions of a price appraisal agency confirming the rate of conversion of shares or valuation of contributed capital amounts (in case of consolidation or merger), or the values of assets divided to the parties (in case of division or splitting); g/ Notarized copies of audited financial statements of 3 consecutive years preceding the year of request for consolidation or merger of the organization merged or consolidated into the insurance business, foreign branch or insurance brokerage business; h/ Documents proving the capital-contributing organizations or individuals, managers and executive officers and the insurance business, foreign branch or insurance brokerage business expected to be established after the division, splitting, consolidation, merger or transformation satisfy the conditions prescribed in Clause 1 of this Article; i/ Insurance businesses that are public listed joint-stock companies are not required to submit the documents prescribed at Points d, dd and h of this Clause. 3. Within 30 days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 4. Within 10 working days after completing the division, splitting, consolidation, merger, transformation, or transfer of shares or contributed capital amounts under the approved plan, the insurance business, foreign branch or insurance brokerage business shall report on its result to the Ministry of Finance. An insurance business being a public listed joint-stock company shall submit the documents prescribed at Points d, dd and h, Clause 1 of this Article. If unable to implement the approved plan, the insurance business, foreign branch or insurance brokerage business shall report a remedial plan to the Ministry of Finance. 5. Within 10 working days after receiving a report on the result of the division, splitting, consolidation, merger or transformation and accompanying documents from the insurance business, foreign branch or insurance brokerage business, the Ministry of Finance shall grant a license or a modified license. Article 23. Dissolution of insurance businesses or insurance brokerage businesses, termination of operation of foreign branches 1. An insurance business or insurance brokerage business shall be dissolved or a foreign branch shall terminate its operation in the following cases: a/ Its operation duration expires according to the license but it does not request extension of this duration or its request for extension is rejected; b/ It is dissolved or terminates its operation on a voluntary basis if it is capable of paying debts; c/ Its license is revoked; d/ It becomes insolvent under a decision of the Ministry of Finance (only applicable to foreign branches); dd/ The foreign non-life insurance business has its license withdrawn, its operation duration expires, or it is dissolved or goes bankrupt (only applicable to foreign branches). 2. A dossier for dissolution of an insurance business or insurance brokerage business or for termination of the operation of a foreign branch must comprise: a/ A written request for dissolution or operation termination, made according to a form provided by the Ministry of Finance; b/ A decision of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the dissolution or operation termination; c/ A competent state agency’s decision in the case prescribed at Point a (in case the request for extension of the operation duration is rejected), and in the cases prescribed at Points c, d and dd, Clause 1 of this Article; d/ Proof that the insurance business, foreign branch or insurance brokerage business (in the case of dissolution or operation termination on a voluntary basis prescribed at Point b, Clause 1 of this Article) has paid all the debts and fulfilled all asset liabilities and commits that it is not involved in any dispute currently heard at court or arbitration, including: - A report on performance of obligations toward employees as prescribed by law; - A report on performance of debt obligations toward insurance buyers, including also the payment of due liabilities under insurance contracts and transfer of insurance contracts under regulations (for insurance businesses and foreign branches); - A report on performance of obligations toward the State and other creditors; - A notarized copy of the tax agency’s written certification of the fulfillment of tax obligations; - Other evidentiary documents (if any). dd/ The establishment and operation license. 3. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a decision to dissolve the insurance business or insurance brokerage business or to terminate the operation of the foreign branch. Chapter III ORGANIZATION AND OPERATION OF INSURANCE BUSINESSES, FOREIGN BRANCHES AND INSURANCE BROKERAGE BUSINESSES Section 1 ORGANIZATION AND ADMINISTRATION Article 24. Organizational structure of insurance businesses, foreign branches or insurance brokerage businesses 1. The organizational structure of an insurance business or insurance brokerage business includes: a/ The headquarters; b/ Branches, transaction bureaus, head offices or dependent-accounting member companies (referred to as branches) attached to the insurance business or insurance brokerage business, which are tasked to perform all or some of the business’s functions, including the function of acting as an authorized representative; c/ Representative offices being dependent units of the insurance business or insurance brokerage business, which are tasked to represent under authorization and protect the business’s interests; d/ Business locations or transaction bureaus (collectively referred to as business locations) where the business is conducting specific business activities. 2. A foreign branch may not establish its branches in Vietnam. Article 25. Managers or executive officers of insurance businesses, foreign branches or insurance brokerage businesses 1. Managers or executive officers regulated by this Decree include: a/ Chairperson of the Board of Directors (chairperson of the Members’ Council or company president); and members of the Board of Directors (or members of the Members’ Council); b/ Head of the Supervisory Board; head of the Internal Audit Board; and supervisors (if no Supervisory Board is formed); c/ Director general (director); deputy directors general (deputy directors); d/ Head of the internal control division or internal audit division; chief accountant; head of branch; head of representative office; heads of professional divisions; actuary (for life insurance businesses and health insurance businesses); valuation and solvency actuary (for non-life insurance businesses and foreign branches). 2. Principles of assignment of positions a/ A member of the Board of Directors or a member of the Members’ Council of an insurance business or insurance brokerage business may not concurrently act as a member of the Board of Directors or a member of the Members’ Council of another business operating in the same field (non-life insurance, life insurance, reinsurance or insurance brokerage); b/ The director general (director) and deputy director general (deputy director) of an insurance business, a foreign branch or an insurance brokerage business may not concurrently work for another insurance business, foreign branch or insurance brokerage business operating in the same field in Vietnam; the director general (director) of an insurance business, a foreign branch or an insurance brokerage business may not act as a member of the Board of Directors or a member of the Members’ Council of another insurance business or insurance brokerage business operating in the same field in Vietnam; c/ The director general (director) and deputy director general (deputy director), head of branch or head of representative office of an insurance business or insurance brokerage business may concurrently act as the head of only one branch or representative office or professional division of such insurance business or insurance brokerage business. The director or deputy director of a foreign branch may concurrently act as the head of only one professional division of such branch; d/ An actuary of a life insurance business or health insurance business, or a valuation and solvency actuary of a non-life insurance business, reinsurance business or foreign branch has the task to organize the assurance of financial safety of the insurance business or foreign branch. An actuary or a valuation and solvency actuary is entitled to professional independence and may not concurrently act as director general (director) or chief accountant. Article 26. General criteria for a manager or an executive officer 1. Not falling in the cases prescribed in Clause 2, Article 18 of the Law on Enterprises. 2. During 3 consecutive years before being appointed: a/ Having not been administratively sanctioned in the field of insurance business in the form of being removed from the title of manager or executive officer approved by the Ministry of Finance, or being suspended from holding the title appointed by his/her insurance business, insurance brokerage business or foreign branch; b/ Having not been disciplined in the form of dismissal due to a violation of the internal process of operation, assessment, claim, internal control, financial and investment management, or management of the reinsurance program in his/her insurance business or foreign branch, or the operational process of insurance brokerage, internal control or code of professional ethics in his/her insurance brokerage business; c/ Having not directly been involved in any case that is prosecuted by a competent agency under law at the time of being appointed. Article 27. Criteria for a member of the Board of Directors, member of the Members’ Council, head of the Supervisory Board, supervisor, or head of the Internal Audit Board 1. The general criteria prescribed in Article 26 of this Decree. 2. Possessing a university or higher degree. 3. Having worked in the field of insurance, finance or banking for at least 5 years, for the chairperson of the Board of Directors or chairperson of the Members’ Council; 3 years, for a member of the Board of Directors or member of the Members’ Council, head of the Supervisory Board, supervisor (in case a Supervisory Board is not required to be formed), and head of the Internal Audit Board, or having at least 3 years’ experience in managing or administering a business operating in the field of insurance, finance or banking. 4. The number of members of the Board of Directors and Supervisory Board (for joint-stock companies) who permanently reside in Vietnam must comply with the Law on Enterprises and the company charter. 5. The head of the Supervisory Board and supervisors (in case a Supervisory Board is not required to be formed) shall work on a full-time basis at an insurance business or insurance brokerage business. Article 28. Criteria for the director general (director) or at-law representative 1. The general criteria prescribed in Article 26 of this Decree. 2. Possessing a university or higher degree. 3. Possessing a diploma or certificate of training in insurance, issued by an insurance training institution lawfully established and operating in Vietnam or overseas. 4. Having at least 5 years’ working experience in the field of insurance, finance or banking, with at least 3 years acting as a manager or an executive officer as prescribed in Article 25 of this Decree in an insurance business, a foreign branch or an insurance brokerage business, or being directly engaged in state management work in the field of insurance. 5. Residing in Vietnam during his/her term of office. Article 29. Criteria for a deputy director general (deputy director), chief accountant, head of branch or head of representative office 1. The general criteria prescribed in Article 26 of this Decree. 2. Possessing a university or higher degree. 3. Possessing a diploma or certificate of training in insurance, issued by an insurance training institution lawfully established and operating in Vietnam or overseas. 4. Having at least 3 years’ working experience in the field of insurance, finance or banking or in the professional field where he/she is expected to work. 5. For a chief accountant, in addition to the criteria prescribed in Clauses 1, 2 and 3 of this Article, he/she must satisfy the conditions and criteria for a chief accountant prescribed in legal documents on accounting, and have at least 3 years’ experience in the field of insurance accounting or audit. 6. Residing in Vietnam during his/her term of office. Article 30. Criteria for the head of a professional division 1. The general criteria prescribed in Article 26 of this Decree. 2. Possessing a university or higher degree. 3. Possessing a diploma or certificate of training in insurance as suitable to the field he/she will take charge of, issued by an insurance training institution lawfully established and operating in Vietnam or overseas. The head of the reinsurance or investment division must possess a diploma or certificate of training in reinsurance or investment issued by an insurance training institution lawfully established and operating in Vietnam or overseas. 4. Having at least 3 years’ working experience in the field of insurance or professional field where he/she is expected to work. 5. Residing in Vietnam during his/her term of office. Article 31. Criteria for an actuary of a life insurance business or health insurance business 1. The general criteria prescribed in Article 26 of this Decree. 2. Having been trained and having at least 10 years’ actuarial experience in the field of life insurance or health insurance and being a fellow of one of the internationally accredited Actuarial Associations, such as the Society of Actuaries of the United Kingdom, the Actuarial Society of America, the Institute of Actuaries of Australia, the Canadian Institute of Actuaries, or a society of actuaries being an official fellow of the International Actuarial Association, or having at least 5 years’ actuarial experience in the field of life insurance or health insurance after becoming a fellow of one of the above societies. 3. Having not committed any violation of the code of ethics of actuaries. 4. Being an employee of the life insurance business or health insurance business. 5. Residing in Vietnam during his/her term of office. Article 32. Valuation and solvency actuary of a non-life insurance business, reinsurance business or foreign branch 1. A valuation and solvency actuary of a non-life insurance business, reinsurance business or foreign branch must satisfy the following criteria: a/ The general criteria prescribed in Article 26 of this Decree; b/ Being an associate of a Society of Actuaries that is an official fellow of the International Actuarial Association; or, c/ Having at least 5 years’ working experience in the field of non-life insurance and having proof that he/she has passed at least 2 exams organized by one of the following societies: the Society of Actuaries of the United Kingdom, the Actuarial Society of America, the Institute of Actuaries of Australia, and the Canadian Institute of Actuaries, or having proof that he/she has passed 2 equivalent exams of actuarial training courses or programs as recognized by one of the above societies; d/ Having not committed any violation of the code of ethics of actuaries. 2. A non-life insurance business, reinsurance business or foreign branch may employ a valuation and solvency actuary through: a/ Employing an employee of the non-life insurance business or foreign branch; b/ Hiring an actuary of an actuarial service provider; c/ Hiring or employing an actuary of the project owner or parent company or a company in the same group of the non-life insurance business or foreign branch. Article 33. Criteria for an insurance broker An employee of an insurance brokerage business who directly carries out insurance brokerage activities prescribed in Article 90 of the Law on Insurance Business must possess a certificate of training in insurance or insurance brokerage issued by an insurance training institution lawfully established and operated in Vietnam or overseas. Article 34. Procedures for appointment or replacement of some managerial or executive titles of an insurance business, a foreign branch or an insurance brokerage business 1. An insurance business, a foreign branch or an insurance brokerage business shall obtain the Ministry of Finance’s written approval for appointment or replacement of the following titles: a/ Chairperson of the Board of Directors (or Chairperson of the Members’ Council or company president); b/ Director general (director); c/ Actuary of a life insurance business or health insurance business; d/ Valuation and solvency actuary of a non-life insurance business, reinsurance business or foreign branch. 2. A dossier for appointment or replacement of a title prescribed in Clause 1 of this Article must comprise: a/ A written request for appointment or replacement, made according to a form provided by the Ministry of Finance; b/ A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) or in the organization and operation regulation (for foreign branches) on the appointment or replacement; c/ A judicial record; a copy of the citizen or people’s identity card, passport or another lawful personal identification paper; resumes and copies of diplomas and certificates proving professional qualifications and capacity of the candidate; d/ A written commitment of the candidate that he/she will work for the insurance business, foreign branch or insurance brokerage business after obtaining the Ministry of Finance’s approval. 3. Within 7 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 4. An insurance business, a foreign branch or an insurance brokerage business shall take responsibility for the appointment or replacement of managerial and executive titles other than those prescribed in Clause 1 of this Article. Article 35. Information technology system An insurance business, a foreign branch or an insurance brokerage business shall itself establish, maintain and operate a system of information technology infrastructure, equipment and software in accordance with the laws on insurance business and corporate governance. Article 36. Internal control and internal audit 1. An insurance business, a foreign branch or an insurance brokerage business shall formulate, and organize and supervise the implementation of, regulations on assignment of responsibilities within the business or branch; the process on research and development of products, operation, appraisal, compensation and reinsurance (for insurance businesses and foreign branches), or the process on insurance brokerage (for insurance brokerage businesses); and other professional processes as prescribed by law. 2. An insurance business, a foreign branch or an insurance brokerage business shall establish internal control and internal audit systems to ensure its safe and lawful operation. 3. Internal control activities must be independent from administration and business activities; the internal audit division must be independent from the internal control division and shall assess and promptly detect all risks that are likely to adversely affect the operation efficiency and objectives of the insurance business, foreign branch or insurance brokerage business; and promptly report any problems to the competent person or body of the business or branch for appropriate solutions. 4. An insurance business, a foreign branch or an insurance brokerage business shall regularly examine the observance of laws, professional processes and internal regulations; and directly examine and control professional activities in all fields at the head office, branches, representative offices and business locations in order to accurately assess the business results and financial status of the business or branch. 5. Annually, an insurance business, a foreign branch or an insurance brokerage business shall conduct an internal audit of its activities. 6. Internal audit and internal control results shall be made in writing and stored at the insurance business, foreign branch or insurance brokerage business. Section 2 INSURANCE BUSINESS ACTIVITIES Article 37. Contents of activities 1. An insurance business or a foreign branch may conduct the activities prescribed in Clause 1, Article 60 of the Law on Insurance Business. 2. A life insurance business may not conduct non-life insurance operations and a non-life insurance business may not conduct life insurance operations. 3. A life insurance business or a non-life insurance business may conduct health insurance operations. 4. A foreign branch may only conduct insurance operations and provide insurance products that a foreign non-life insurance business may conduct or provide under regulations of the country where the head office of such business is located. Article 38. Sale of insurance products 1. An insurance business or a foreign branch may itself sell insurance products in the following forms: a/ Directly; b/ Through insurance agents or insurance brokers; c/ Through bidding; d/ Via e-transactions; dd/ Other lawful forms. 2. An insurance business or a foreign branch may only sell insurance products according to the contents and scope of activities stated in its license. 3. An insurance business or a foreign branch may not force organizations and individuals to buy insurance in any form. 4. Insurance purchase and sale through bidding must comply with the bidding law and insurance rules, terms and premium rates prescribed in Article 39 of this Decree. Article 39. Insurance rules, terms and premium rates 1. The Ministry of Finance shall issue insurance rules, terms, premium rates and the minimum sum insured for each type of compulsory insurance. 2. Insurance products prescribed by the Government or decided by the Prime Minister must comply with separate guiding documents. 3. Products of life insurance or health insurance operations shall be approved by the Ministry of Finance prior to their provision. 4. For insurance products of non-life insurance operations: a/ Before providing insurance products of insurance operations for motor vehicles, a non-life insurance business or foreign branch shall register their insurance rules, terms and premium rates with the Ministry of Finance. The Ministry of Finance shall announce net insurance premium rates corresponding to basic insurance conditions and liabilities as a basis for determination of insurance premiums; b/ For other non-life insurance products, a non-life insurance business or foreign branch may itself formulate their insurance rules, terms and premium rates. 5. Insurance rules, terms and premium rates formulated by an insurance business or a foreign branch must: a/ Comply with the law and conform with practices, ethical and cultural standards and customs and habits of Vietnam; b/ Use an accurate, simple and easy-to-understand language, with technical terms clearly defined in the insurance rules and terms; c/ Explicitly describe insurable interests, subject matters insured, scope of insurance and insured risks, benefits and obligations of insurance buyers and the insured, liabilities of the insurance business, exclusion of liability clause, methods of premium payment, and regulations on dispute settlement; d/ Premium rates shall be formulated based on statistics, ensuring the solvency of the insurance business or foreign branch, and must correspond to insurance conditions and liability. 6. An insurance business or a foreign branch shall strictly comply with the rules, terms and premium rates approved by or registered with the Ministry of Finance. Any change shall be approved by or registered with the Ministry of Finance before it is effected. 7. An insurance business or a foreign branch shall announce information on insurance products permitted to be provided, including rules, terms and premium rates, claim form, and relevant documents in the course of signing and performance of insurance contracts, on the portals of the Ministry of Finance, Vietnam Association of Insurers and the insurance business or foreign branch. Article 40. Procedures for approval and registration of insurance products 1. For insurance products with their rules, terms and premium rates subject to approval by the Ministry of Finance under Clause 3, Article 39 of this Decree, an insurance business or a foreign branch shall submit a dossier to the Ministry of Finance for approval, which must comprise: a/ A written request for approval of products, made according to a form provided by the Ministry of Finance; b/ The rules, terms and premium rates of insurance products to be provided; c/ Formula and method and explanations about technical grounds used for calculation of premiums, technical reserves of insurance products to be provided; d/ Claim form, product brochures, sale illustration brochures, and forms to be filled in and signed by insurance buyers when buying insurance. Within 21 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 2. For insurance products subject to registration with the Ministry of Finance before being provided under Clause 4, Article 39 of this Decree, an insurance business or a foreign branch shall submit a dossier comprising: a/ A written request for registration of products, made according to a form provided by the Ministry of Finance; b/ The rules, terms and premium rates for to-be-launched insurance products; c/ Explanations about the method and technical grounds for calculation of premiums. Within 10 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 3. The Ministry of Finance is the sole agency that receives dossiers of request for approval or registration of insurance products. The Ministry of Finance shall consult and reach agreement with the Ministry of Industry and Trade on insurance products whose contract shall be registered according to a set form and must contain general transaction conditions as prescribed in the Law on Protection of Consumer Interests. Within 3 working days after issuing a written approval of such an insurance product, the Ministry of Finance shall send its approval together with the insurance product to the Ministry of Industry and Trade for registration of its contract made according to a set form and containing general transaction conditions as prescribed by the Law on Protection of Consumer Interests. Article 41. Insurance commissions Insurance businesses and foreign branches may pay insurance commissions to insurance brokerage businesses and insurance agents under the Ministry of Finance’s regulations. Section 3 REINSURANCE ACTIVITIES Article 42. Reinsurance 1. An insurance business or a foreign branch may transfer part, but not all, of the liability it has assumed under an insurance contract to one or more than one domestic or foreign insurance business or to another foreign branch. 2. The maximum level of liability an insurance business or a foreign branch may retain for each risk or separate loss must not exceed 10% of its equity. 3. In case an insurance business or a foreign branch transfers insurance as designated by the insured, the rate of designated reinsurance must not exceed 90% of the insurance liability. 4. An insurance business or a foreign branch may accept reinsurance for the liability that another insurance business has insured. When accepting reinsurance, an insurance business or a foreign branch shall assess the risks in order to ensure they suit its solvency and it may not accept reinsurance for the already reinsured risks. 5. The Ministry of Finance shall issue guidance on reinsurance and the retention level for insurance businesses, reinsurance businesses and foreign branches. Article 43. Conditions on a foreign reinsurance business 1. A foreign reinsurance business is lawfully operating and fully satisfies the solvency requirements as prescribed by the law of the country where its head office is located. 2. The leading reinsurance business and businesses that accept reinsurance accounting for 10% or more of the total liability under each reinsurance contract are rated at least “BBB” by the Standards & Poor’s or Fitch Ratings, “B++” by A.M. Best, “Baal” by Moody’s or an equivalent rating by another rating agency in the fiscal year nearest to the time the reinsurance contract is entered into. 3. In case of reinsurance to its overseas parent company or a company in the same group that has no credit rating as mentioned above, an insurance business, a reinsurance business or a foreign branch shall submit to the Ministry of Finance a written certification by a foreign insurance management agency of the country where the reinsurance company’s head office is located that the such reinsurance company ensures solvency in the fiscal year nearest to the year of reinsurance. Section 4 INSURANCE BROKERAGE ACTIVITIES Article 44. Contents of insurance brokerage activities 1. Providing information on types of insurance, insurance conditions, terms and premium rates, and insurance businesses to insurance buyers. 2. Providing insurance buyers with consultancy on risk assessment, selection of types of insurance, insurance conditions, terms and premium rates, and insurance businesses. 3. Conducting negotiations and arrangements for conclusion of insurance contracts between insurance businesses and insurance buyers. 4. Carrying out other activities relating to the performance of insurance contracts at the request of insurance buyers. Article 45. Prohibited acts in insurance brokerage activities 1. Obstructing insurance buyers or the insured to provide information relating to insurance contracts, or inciting insurance buyers or the insured not to declare details relating to insurance contracts. 2. Offering sales promotion to clients through promising to provide unlawful interests in order to incite them to sign insurance contracts. 3. Inciting insurance buyers to cancel existing insurance contracts in order to buy new ones. 4. Advising clients to buy insurance at an insurance business or a foreign branch with conditions and terms that are less competitive than those of another insurance business or foreign branch in order to gain higher brokerage commissions. 5. Providing clients with information that is false or incompliant with insurance conditions or terms of insurance businesses. Section 5 OTHER ACTIVITIES Article 46. Loss prevention and limitation 1. Insurance businesses and foreign branches may apply preventive measures to ensure safety for subject matters insured when so agreed by insurance buyers or competent state agencies. 2. Measures to prevent and limit losses include: a/ Conducting public information and educational work; b/ Financing or supporting the furnishing of facilities and physical foundations to prevent and limit risks; c/ Supporting the construction of works in order to prevent, and reduce the level of, risks for subject matters insured; d/ Hiring other organizations or individuals to supervise, prevent and limit losses. 3. Expenses for loss prevention and limitation shall be calculated in percentage of collected premiums under the guidance of the Ministry of Finance. Article 47. Loss assessment 1. Loss assessment must comply with Article 48 of the Law on Insurance Business. Assessment agencies shall take responsibility for their assessment results. 2. Loss assessment must be truthful, objective, scientific, timely and accurate. 3. Loss assessment results shall be presented in assessment records. Article 48. Transfer of insurance contracts 1. An insurance business or a foreign branch that wishes to transfer all insurance contracts of one or more than one insurance operation (below referred to as transferor) shall submit to the Ministry of Finance a dossier comprising: a/ A written request for transfer, made according to a form provided by the Ministry of Finance; b/ A transfer plan, which must have the following details: - Name and address of the insurance business or foreign branch that receives the transfer (below referred to as transferee); - Type of insurance operation and number of transferred insurance contracts; - Method of transfer of technical reserves, and insurance liability relating to the transferred contracts; - Expected time of the transfer; - The transferee’s detailed explanations about its satisfaction of financial requirements after the transfer. c/ A transfer contract, which must have the following details: - Objects of the transfer; - Rights and obligations of the parties to the transfer; - Expected time of the transfer; - Dispute settlement method. d/ The transferee’s commitment to guaranteeing the interests of the insurance buyers under the transferred insurance contracts after the transfer takes effect. 2. Within 21 working days after receiving a complete dossier of request for the transfer, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 3. Within 30 days after the Ministry of Finance approves the transfer of insurance contracts, the transferor shall announce the transfer through: a/ Publishing an announcement of the transfer on 2 dailies for 5 consecutive issues, with the following principal details: - Names and addresses of the transferor and transferee; - Type of insurance operation and number of transferred insurance contracts; - Expected time of the transfer; - Address for settlement of insurance buyers’ complaints relating to the transfer. b/ Sending a notice together with a brief plan on the transfer to every insurance buyer. This notice must clearly state that within 15 days after receiving the notice, an insurance buyer may cancel the insurance contract if disagreeing with the transfer plan, and state the effective date of this plan. In case an insurance buyer cancels its/his/her insurance contract, the transferor shall return to the insurance buyer an amount of the received insurance premium corresponding to the remaining term of the insurance contract minus relevant reasonable expenses, for non-life insurance or health insurance, or the received premium or surrender value, whichever is higher, for life insurance. 4. From the date of signing a contract on transfer of insurance contracts, the transferor shall refrain from signing a new insurance contract for the transferred insurance operation. 5. Within 60 days after the Ministry of Finance approves a transfer plan, the transferor shall hand over to the transferee: a/ All insurance contracts that are still in effect under the approved transfer plan; b/ Outstanding claim files relating to the transferred insurance operation; c/ All assets, funds and technical reserves related to the transferred insurance contracts, and outstanding claim files relating to the transferred insurance operation. 6. The transferee shall coordinate with the transferor in making a transfer plan and determining the value of assets relating to the funds and technical reserves of the transferred insurance contracts, and reach agreement on the effective date of the transfer plan. 7. From the date of receiving the transfer, the transferee shall perform the obligations under the transferred insurance contracts signed between the transferor and insurance buyers, including the responsibility to deal with the insured events that have occurred but not yet been reported. The transferee may receive assets relating to the funds and technical reserves of the transferred insurance contracts and use these assets to perform the obligations under the transferred insurance contracts. Chapter IV FINANCIAL REGIME APPLICABLE TO INSURANCE BUSINESSES, FOREIGN BRANCHES AND INSURANCE BROKERAGE BUSINESSES Section 1 CHARTER CAPITAL, ALLOCATED CAPITAL, EQUITY, DEPOSIT, AND PROPERTY MANAGEMENT Article 49. Charter capital, allocated capital 1. The charter capital of an insurance business or insurance brokerage business is the total sum of money the members have contributed or committed to contribute upon establishment of a limited liability company, or the total face value of shares already sold or registered to be bought upon establishment of a joint-stock company, and shall be stated in the charter of the insurance business or insurance brokerage business. 2. The allocated capital of a foreign branch is the capital amount allocated by a foreign non-life insurance business to its branch in Vietnam. Article 50. Management of equity 1. Throughout the operation duration, an insurance business, a foreign branch or an insurance brokerage business shall maintain its equity on the following principles: a/ Its equity must not be lower than the legal capital level prescribed in Article 10 of this Decree; b/ Its solvency margin must be higher than the minimum solvency margin. 2. Quarterly, based on its financial statement, an insurance business, a foreign branch or an insurance brokerage business shall re-evaluate its equity sources. If its equity sources fail to comply with Clause 1 of this Article, an insurance business, a foreign branch or an insurance brokerage business shall carry out procedures for adding capital in accordance with law within 6 months from the end of a quarter. Article 51. Use of deposit 1. An insurance business or a foreign branch may only use its deposit to fulfill its commitments with its insurance buyers when its solvency is deficient and shall obtain the Ministry of Finance’s written approval for such use. Within 90 days from the date of use of its deposit, an insurance business or a foreign branch shall supplement the used deposit amount. 2. An insurance business or a foreign branch may withdraw the whole of its deposit upon operation termination. Article 52. Other provisions on management and use of capital and assets In addition to the provisions of this Decree, insurance businesses, foreign branches and insurance brokerage businesses shall comply with other relevant provisions on management and use of capital and assets. Section 2 TECHNICAL RESERVES FOR INSURANCE OPERATIONS Article 53. Technical reserves for non-life insurance 1. A non-life insurance business or foreign branch shall set aside technical reserves for each insurance operation or insurance contract corresponding to its retained liability. 2. Technical reserves include: a/ Unearned premium reserve, which shall be used to indemnify the liability that is likely to arise in the effective duration of the insurance contract in the subsequent year; b/ Claim reserve, which shall be used to indemnify the losses that have arisen within the insurance liability for which claims have not yet been lodged or have been lodged but not been settled by the end of a fiscal year; c/ Catastrophe reserve, which shall be used to pay indemnities when a catastrophe or a significant loss occurs while the total premium in the fiscal year after setting aside the unearned premium reserve and claim reserve for outstanding claims is not enough for payment of indemnities for the retained liability of an insurance business or a foreign branch. Article 54. Technical reserves for life insurance 1. A life insurance business shall set aside technical reserves for every life insurance contract corresponding to its liability. 2. Technical reserves include: a/ Mathematical reserve, which shall be used to pay the sum insured for the committed liabilities when an insured event occurs; b/ Unearned premium reserve, which shall be used to pay the sum insured that is likely to arise in the effective duration of the insurance contract in the subsequent year; c/ Claim reserve, which shall be used to indemnify for insured events that have arisen for which claims have not yet been lodged or have been lodged but not yet settled by the end of a fiscal year; d/ Interest sharing reserve, which shall be used to pay the interest agreed between the insurance business and insurance buyers under the insurance contracts; dd/ Interest rate commitment reserve, which shall be used to secure the interest rate committed by the insurance business to its clients as agreed in the insurance contracts; e/ Equalization reserve, which shall be used to pay the sum insured when an insured event occurs due to a significant fluctuation in the risk ratio or technical interest rate. Article 55. Technical reserves for health insurance 1. A life insurance business, non-life insurance business, health insurance business or foreign branch shall set aside technical reserves for every health insurance contract corresponding to its liability. 2. Technical reserves include: a/ Mathematical reserve, which shall be used to pay the sum insured for the committed liabilities when an insured event occurs; b/ Unearned premium reserve, which shall be used to pay the sum insured that is likely to arise in the effective duration of the insurance contract in the subsequent year; c/ Claim reserve, which shall be used to indemnify insured events that have arisen for which claims have not yet been lodged or have been lodged but not yet settled by the end of a fiscal year; d/ Equalization reserve, which shall be used to pay the sum insured when an insured event occurs due to a significant fluctuation in the risk ratio or technical interest rate. Article 56. Technical reserves for reinsurance 1. For non-life reinsurance, technical reserves include those prescribed in Article 53 of this Decree. 2. For life reinsurance, technical reserves include those prescribed in Article 54 of this Decree. 3. For health reinsurance, technical reserves include those prescribed in Article 55 of this Decree. Article 57. Levels and methods of setting aside technical reserves The Ministry of Finance shall provide specific guidance on levels, methods and grounds for setting aside technical reserves prescribed in Articles 53, 54 and 55 of this Decree as suitable to each insurance operation. Article 58. Procedures for approval of the application of a method of setting aside technical reserves for insurance activities 1. An insurance business or a foreign branch may not change the method of setting aside technical reserves in a fiscal year. If wishing to change this method in the subsequent fiscal year, an insurance business or a foreign branch shall send a request to, and obtain the approval from, the Ministry of Finance. 2. A dossier of request for approval of the application or change of a method of setting aside technical reserves for insurance activities must comprise: a/ A written request for application or change of the method of setting aside technical reserves for insurance activities, made according to a form provided by the Ministry of Finance; b/ A document explaining and illustrating the method of setting aside technical reserves for insurance activities expected to be applied, certified by the valuation and solvency actuary (for non-life insurance businesses, reinsurance businesses and foreign branches), or by the actuary (for life insurance businesses and health insurance businesses). If wishing to change this method, such document must prove that the new method can express the liabilities of the insurance business or foreign branch more accurately and adequately than the old method does. 3. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Section 3 CAPITAL INVESTMENT Article 59. Investment principles 1. Investment capital sources of an insurance business, a foreign branch or an insurance brokerage business include: a/ Equity; b/ Idle capital from technical reserves for insurance operations; c/ Other lawful sources as prescribed by law. 2. An insurance business, a foreign branch or an insurance brokerage business shall conduct investment activities on the following principles: a/ Complying with the law, taking self-responsibility for investment activities, and ensuring safety, efficiency and liquidity; b/ Refraining from borrowing loans to make direct investment or entrust investment in securities or real estate or to contribute capital to other businesses; c/ Refraining from making reinvestment in any form for shareholders (capital-contributing members) or persons related to shareholders (capital-contributing members) as prescribed in the Law on Enterprises, except savings deposits at shareholders (members) being credit institutions; d/ Refraining from investing more than 30% of investment capital in companies within the same group or in a group of companies having cross-ownership relationships (this provision does not apply to savings deposits at credit institutions and offshore investment capital sources through establishing overseas businesses or branches); dd/ In case of investment entrustment, the entrusted organization must have a competent agency’s permission for entrusted investment as suitable to the contents of entrusted investment. Article 60. Investment from equity sources 1. Investment from equity sources with an amount equal to the legal capital or minimum solvency margin, whichever is higher, must comply with: a/ Clause 1, Article 62 of this Decree, for non-life insurance businesses, foreign branches and reinsurance businesses; b/ Clause 2, Article 62 of this Decree, for life insurance businesses and health insurance businesses. 2. Insurance businesses and insurance brokerage businesses may make offshore investment in accordance with law with their equity amounts that are in excess of the level prescribed in Clause 1 of this Article. 3. Offshore investment may only be made in the following forms: a/ Establishing, or contributing capital to establish, overseas insurance businesses, or establishing overseas branches of insurance businesses; b/ Other forms as prescribed by law. 4. Offshore investment by an insurance business or insurance brokerage business must comply with the laws on insurance business, offshore investment and foreign exchange management, and shall be made in the name of such business with the approval of the Ministry of Finance. 5. Procedures for requesting approval for implementation (adjustment or termination) of offshore investment activities under Point a, Clause 3 of this Article: a/ Before implementing (adjusting or terminating) offshore investment activities, an insurance business or insurance brokerage business shall submit to the Ministry of Finance a dossier comprising: - A written request, made according to a form provided by the Ministry of Finance; - A document of a competent person or body as stated in the company charter (for insurance businesses or insurance brokerage businesses) on the implementation (adjustment or termination) of offshore investment activities; - A document explaining the implementation of (adjustment or termination) of offshore investment activities: In case of implementing offshore investment activities, this document must clearly state the investment objective, form of investment, investment capital source, investment capital amount, investment schedule, and expected investment efficiency; and a contract or agreement with partners (if any). In case of adjusting investment capital amount or form of investment, this document must state the situation and result of investment, difficulties and advantages (if any), and adjustment plan. In case of terminating offshore investment activities, this document must state the reason for the termination, investment result, investment-capital retrieval capacity, and expected time of termination. b/ Within 21 days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. 6. For other cases of investment prescribed at Point b, Clause 3 of this Article which are guided in a separate document, the procedures for requesting approval for implementation (adjustment or termination) of offshore investment activities must comply with this document. Article 61. Idle capital from technical reserves for insurance operations 1. Idle capital from technical reserves for insurance operations of an insurance business or a foreign branch is the total technical reserves for insurance operations minus the amounts used to pay regular indemnities in a period, for non-life insurance, or to pay the regular sums insured in a period, for life insurance and health insurance. 2. The amount used to pay regular indemnities in a period, for non-life insurance businesses and foreign branches, must not be lower than 25% of the total technical reserves and shall be deposited at a credit institution operating in Vietnam. 3. The amount used to pay the regular sum insured in a period, for life insurance businesses and health insurance business, must not be lower than 5% of the total technical reserves and shall be deposited at a credit institution operating in Vietnam. Article 62. Investment of idle capital from technical reserves for insurance activities Investment of idle capital from technical reserves for insurance activities of insurance businesses or foreign branches may be made either directly by these businesses and branches or through investment entrustment, and may only be made in Vietnam in the following ways: 1. For non-life insurance businesses and foreign branches: a/ Buying government bonds, treasury bills, treasury notes, national construction bonds, municipal bonds and government-guaranteed bonds with an unlimited quantity; b/ Making savings deposits at credit institutions with an unlimited sum; c/ Buying corporate stocks or shares or fund certificates or contributing capital to other businesses with an amount accounting for at most 35% of the idle capital from technical reserves for insurance operations; d/ Dealing in real estate under the Law on Real Estate Business using at most 10% of idle capital from technical reserves for insurance operations. 2. For life insurance businesses and health insurance businesses: a/ Buying government bonds, treasury bills, treasury notes, national construction bonds, municipal bonds and government-guaranteed bonds with an unlimited quantity; b/ Making savings deposits at credit institutions with an unlimited sum; c/ Buying corporate stocks or shares or fund certificates with an amount accounting for at most 50% of idle capital from technical reserves for insurance operations; d/ Dealing in real estate under the Law on Real Estate Business using at most 20% of the idle capital from technical reserves for insurance operations; dd/ Contributing capital to other businesses with an amount accounting for at most 20% of the idle capital from technical reserves for insurance operations. 3. For reinsurance businesses: a/ Investment of idle capital from technical reserves for non-life reinsurance must comply with Clause 1 of this Article; b/ Investment of idle capital from technical reserves for life reinsurance or health reinsurance must comply with Clause 2 of this Article. 4. Insurance businesses or foreign branches may only invest in fund certificates of investment funds whose portfolios cover the fields they are permitted to invest in under Article 98 of the Law on Insurance Business. Section 4 SOLVENCY AND RESTORATION OF SOLVENCY Article 63. Solvency 1. Insurance businesses and foreign branches shall always maintain their solvency throughout the course of doing insurance business. 2. An insurance business or a foreign branch shall be regarded as having solvency when it has fully set aside technical reserves for insurance operations and has a solvency margin not lower than the minimum solvency margin prescribed in Article 64 of this Decree. Article 64. Minimum solvency margin 1. The minimum solvency margin of a non-life insurance business or a foreign branch must be either of the following amounts, whichever is higher: a/ 25% of the total actually retained premium at the time of calculation of the solvency margin; b/ 12.5% of a total of the primary insurance premium and reinsurance premium at the time of calculation of the solvency margin. 2. The minimum solvency margin of a life insurance business or health insurance business must equal: a/ 1.5% of technical reserves for insurance activities plus 0.3% of the risk-prone sum insured, for unit-linked insurance contracts; b/ 4% of technical reserves for insurance activities plus 0.3% of the risk-prone sum insured, for universal life insurance contracts and pension insurance contracts; c/ For other life insurance contracts and health insurance contracts: - For a contract of a term of up to 5 years, the minimum solvency margin must equal 4% of technical reserves for insurance operations plus 0.1% of the risk-prone sum insured; - For a contract of a term of over 5 years, the minimum solvency margin must equal 4% of technical reserves for insurance operations plus 0.3% of the risk-prone sum insured. 3. The minimum solvency margin of a reinsurance business must comply with: a/ Clause 1 of this Article, for non-life reinsurance; b/ Clause 2 of this Article, for life reinsurance or health reinsurance. Article 65. Solvency margin The solvency margin of an insurance business or a foreign branch is the difference between the value of assets and payable debts of this insurance business or foreign branch at the time of calculation of the solvency margin. Assets used for calculation of the solvency margin of an insurance business or a foreign branch must ensure their liquidity. Assets to be wholly or partly excluded upon calculation of the solvency margin of an insurance business or a foreign branch must comply with the guidance of the Ministry of Finance. Article 66. Danger of insolvency An insurance business or a foreign branch shall be regarded as being at risk of insolvency when its solvency margin is lower than the minimum solvency margin. Article 67. Restoration of solvency 1. An insurance business or a foreign branch at risk of insolvency shall immediately take measures to restore its solvency and concurrently report on its financial situation, causes of insolvency and remedies to the Ministry of Finance. 2. If an insurance business or a foreign branch cannot itself restore its solvency, the Ministry of Finance may request this insurance business or foreign branch to restore its solvency by: a/ Supplementing its equity; b/ Ceding insurance; narrowing the contents, scope and areas of operation; or terminating some or all of operations; c/ Strengthening the organizational apparatus and replacing managers and executive officers; d/ Requesting transfer of insurance contracts; dd/ Taking other measures. 3. In case an insurance business or a foreign branch cannot restore its solvency as requested by the Ministry of Finance under Clause 2 of this Article, it shall be placed under special control. The Ministry of Finance shall guide the formation and operation mechanism of a Solvency Control Board in order to apply solvency-restoring measures under Article 80 of the Law on Insurance Business. Section 5 REVENUES AND EXPENSES Article 68. Revenues of insurance businesses and foreign branches Revenues of an insurance business or a foreign branch are receivables arising in a period, including: 1. Revenues from insurance business activities, which are receivables arising in a period after subtracting payables to reduce revenues arising in the period: a/ Receivables arising in a period include: - Primary insurance premiums; - Inward reinsurance premiums; - Commissions from outward reinsurance; - Charges for the provision of agency services including loss assessment, claim settlement, request for third party’s reimbursement, and handling of fully compensated goods; - Charges for loss assessment, excluding assessment for member units conducting internal cost-accounting of the same insurance business conducting independent cost-accounting; - Leading fees from leading insurance companies, in case of co-insurance. b/ Payables to reduce revenues in a period include: - Returned premiums; - Decreased premiums; - Outward reinsurance premiums; - Returned inward insurance premiums; - Decreased inward insurance premiums; - Returned commissions from outward reinsurance; - Decreased commissions from outward reinsurance. 2. Revenues from financial activities: a/ Revenues from investment activities prescribed in Section 3, Chapter IV of this Decree; b/ Revenues from securities purchase and sale activities; c/ Deposit interests; d/ Revenues from property lease; dd/ Other revenues as specified by law. 3. Revenues from other activities: a/ Revenues from transfer, sale or liquidation of fixed assets; b/ Bad debts written off but now recovered; c/ Other revenues as specified by law. Article 69. Expenses of insurance businesses and foreign branches Expenses of an insurance enterprise or a foreign branch are amounts of money which must be spent or set aside in a period, including: 1. Insurance business expenses, which are amounts of money which must be spent or set aside in a period after subtracting receivables to reduce expenses in the period. a/ Amounts of money which must be spent or set aside in a period include: - Payment of primary non-life insurance claims; payment of life insurance sums; - Payment of inward reinsurance claims; - Setting aside of technical reserves; - Payment of insurance commissions; - Payments to insurance brokerage businesses, including insurance brokerage commissions and other payments as prescribed; - Loss assessment expenses; - Expenses for agency services, including loss assessment, claim settlement and request for third party’s reimbursement; - Expense for handling of wholly compensated goods; - Leading fees for leading insurance companies in case of co-insurance (if this fee is agreed upon in writing by the parties); - Expenses for insurance agent management, including expenses for initial training and exams for grant of agent certificates, and expenses for advanced training for agents, agent recruitment, and agent reward and support; - Expenses for risk and loss prevention and limitation; - Expense for assessment of risks of subject matters insured; - Other expenses and set aside amounts as specified by law. b/ Receivables to reduce expenses in a period include: - Received compensations from outward reinsurance; - Claimed third party’s reimbursements; - Wholly compensated goods recovered. 2. Expenses for financial activities: a/ Expense for investment activities prescribed in Section 3, Chapter IV of this Decree; b/ Investment yield payable to insurance buyers as committed in life insurance contracts; c/ Expense for property lease; d/ Payable banking fee and loan interest; dd/ Other expenses and set aside amounts as specified by law. 3. Expenses for other activities: a/ Expense for transfer, sale or liquidation of fixed assets; b/ Expense for recovery of bad debts written off but now recovered; c/ Other expenses and set aside amounts as specified by law. Article 70. Separation of equity from insurance premiums 1. Insurance businesses and foreign branches shall separate their equity from insurance premiums collected from insurance buyers under the guidance of the Ministry of Finance (below referred to as equity fund and policyholder fund). 2. Insurance businesses and foreign branches shall register with the Ministry of Finance the principles of allocation of assets, capital, revenues and overhead costs related to both the equity fund and policyholder fund before applying them. A registration dossier must comprise: a/ A written request for application or change, made according to a form provided by the Ministry of Finance; b/ A document explaining the allocation principles expected to be applied, bearing the certification by the actuary or valuation and solvency actuary of the business. Within 21 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 71. Revenues of insurance brokerage businesses Revenues of an insurance brokerage business are amounts of money receivable in a period, including: 1. Revenues from insurance brokerage activities: a/ Insurance brokerage commissions from insurance premiums collected from the guidance and counseling on entry into insurance contracts for clients; b/ Revenues from activities specified in Clauses 1, 2 and 4, Article 90 of the Law on Insurance Business; c/ Other revenues as specified by law. 2. Revenues from financial activities: a/ Revenue from securities purchase and sale activities; b/ Interests from deposits and loans; c/ Revenue from property lease; d/ Other revenues as specified by law. 3. Revenues from other activities: a/ Revenue from transfer, sale or liquidation of fixed assets; b/ Bad debts written off but now recovered; c/ Other revenues as specified by law. Article 72. Expenses of insurance brokerage businesses Expenses of an insurance brokerage business are amounts of money which must be spent or set aside in a period, including: 1. Insurance brokerage expenses: a/ Expense for insurance brokerage activities; b/ Expense for purchase of professional liability insurance; c/ Other expenses and set aside amounts as specified by law. 2. Expenses for financial activities: a/ Expense for property lease; b/ Banking fee and loan interest; c/ Other expenses and set aside amounts as specified by law. 3. Expenses for other activities: a/ Expense for transfer, sale or liquidation of fixed assets; b/ Expense for recovery of bad debts written off but now recovered; c/ Other expenses and set aside amounts as specified by law. Section 6 PROFITS AND PROFIT DISTRIBUTION Article 73. Profits of insurance businesses, foreign branches and insurance brokerage businesses Profit of an insurance business, a foreign branch or an insurance brokerage business is the difference between its total revenues and total expenses. Profit earned in a year of an insurance business, a foreign branch or an insurance brokerage business includes profit from insurance business activities, profit from financial activities and profit from other activities. Article 74. Obligation toward the state budget Insurance businesses, foreign branches and insurance brokerage businesses shall fully perform their obligation toward the state budget in accordance with law. Article 75. Profit distribution After satisfying the requirements on capital and solvency, paying enterprise income tax as prescribed by law, and setting aside the compulsory reserve fund, insurance businesses, foreign branches and insurance brokerage businesses may distribute remaining profits in accordance with law. Article 76. Surplus sharing in life insurance 1. Life insurance businesses that provide with-profits life insurance products shall separate and separately monitor assets, capital, revenues and expenses related to these products’ contracts (below referred to as with-profits policyholder fund). 2. At the end of a fiscal year, a life insurance business may divide part or all of the surplus of its with-profits policyholder fund to policyholders and owners. In any circumstance, a life insurance business shall ensure that all policyholders receive at least 70% of the surplus of the total profit amount earned or of the surplus difference between the actual and presumed figures on the mortality rate, investment interest rates and expenses, whichever is higher. 3. Life insurance businesses must have their method of sharing the surplus of their with-profits policyholder fund approved by the Ministry of Finance before applying such method. 4. A dossier of request for approval or change of a surplus-sharing method must comprise: a/ A written request for application or change of the surplus-sharing method, made according to a form provided by the Ministry of Finance; b/ A document explaining the surplus-sharing method expected to be applied, bearing the certification by the actuary. Within 21 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 77. Compulsory reserve fund Insurance businesses, foreign branches and insurance brokerage businesses shall set aside 5% of their annual after-tax profits to set up a compulsory reserve fund. The maximum level of the compulsory reserve fund must equal 10% of the charter capital of an insurance business or allocated capital of a foreign branch. Section 7 ACCOUNTING AND AUDIT REGIME, STATISTICS AND FINANCIAL STATEMENTS Article 78. Accounting regime Insurance businesses, foreign branches and insurance brokerage businesses shall record all initial documents, update accounting books and reflect their economic and financial activities in a full, timely, truthful, accurate and objective manner. Article 79. Fiscal year The fiscal year of an insurance business, a foreign branch or an insurance brokerage business begins on January 1 and ends on December 31 of a calendar year. The first fiscal year of an insurance business, foreign branch or insurance brokerage business begins on the date of grant of its license and ends on the last day of the same year. Article 80. Financial statement 1. Insurance businesses, foreign branches and insurance brokerage businesses shall make and send their financial statements, statistical reports and operation reports on a regular or an extraordinary basis to the Ministry of Finance in accordance with current regulations and the guidance of the Ministry of Finance. 2. Annual financial statements of insurance businesses, foreign branches and insurance brokerage businesses shall be audited and certified by an independent audit firm lawfully operating in Vietnam before being submitted to the Ministry of Finance. Article 81. Financial management 1. Insurance businesses, foreign branches and insurance brokerage businesses may enjoy financial autonomy, take responsibility for managing and supervising their financial activities and business results, and fulfill their obligations and commitments in accordance with law. 2. Insurance businesses, foreign branches and insurance brokerage businesses shall perform the financial management on the principles and standards prescribed by the Ministry of Finance. 3. Insurance businesses, foreign branches and insurance brokerage businesses shall elaborate and implement, and supervise the implementation of, their financial regulations, investment regulations, control and internal audit regulations and relevant processes and procedures. Article 82. Disclosure of financial statements 1. Insurance businesses, foreign branches and insurance brokerage businesses shall disclose their financial statements in accordance with law. 2. Information disclosed by insurance businesses, foreign branches or insurance brokerage businesses must be conformable with their financial statements already audited and certified by an independent audit firm. Chapter V INSURANCE AGENTS AND INSURANCE AGENT TRAINING INSTITUTIONS Section 1 INSURANCE AGENTS Article 83. Operation principles of insurance agents 1. Organizations and individuals acting as insurance agents must fully satisfy the conditions for acting as agents prescribed in Article 86 of the Law on Insurance Business and shall enter into insurance agency contracts under Article 87 of the Law on Insurance Business. 2. An organization or individual may not concurrently act as an agent for another insurance business or foreign branch if obtaining no written consent from the insurance business or foreign branch for which it/he/she is currently acting as an agent. 3. An individual who has been granted an agent certificate but has not acted as an agent for 3 consecutive years shall take an exam for a new agent certificate before acting as an agent. Having not acted as an agent means that an individual neither enters into a contract to act as an individual agent for an insurance business or a foreign branch nor works for an institutional agent of an insurance business or a foreign branch. 4. An insurance agent may not take the following acts: a/ Providing untrue information or making untrue advertisements about the contents and scope of operation of its/his/her insurance business or foreign branch, or about insurance conditions and terms, thus infringing upon lawful rights and interests of insurance buyers; b/ Preventing insurance buyers from providing information relating to insurance contracts or inciting insurance buyers or the insured not to declare details relating to insurance contracts; c/ Vying for clients through obstructing, enticing, buying off or intimidating employees or clients of another insurance business, foreign branch, insurance agent or insurance brokerage business; d/ Inciting in any forms clients to cancel insurance contracts still in effect. Article 84. Rights and obligations of insurance businesses and foreign branches in insurance agency activities 1. An insurance business or a foreign branch has the following rights: a/ To select, and enter into insurance agency contracts with, insurance agents; b/ To set payable insurance commission rates in insurance agency contracts in accordance with law; c/ To receive and manage deposits or mortgaged assets of insurance agents as agreed upon in insurance agency contracts; d/ To request insurance agents to pay collected insurance premiums as agreed upon in insurance contracts; dd/ To inspect and supervise the performance of insurance agency contracts; e/ To enjoy other lawful benefits from insurance agency activities. 2. An insurance business or a foreign branch has the following obligations: a/ To organize training and grant training certificates to agents in accordance with law; b/ To provide guidance and adequate and accurate information and documents relating to insurance agency activities; c/ To perform responsibilities arising under signed insurance agency contracts; d/ To pay commissions to agents as agreed upon in insurance agency contracts; dd/ To refund to insurance agents their deposits or mortgaged assets as agreed; e/ To take responsibility for damage or losses caused by their insurance agency activities as agreed upon in insurance agency contracts; g/ To submit to the inspection and supervision by competent state agencies of activities carried out by its agents; h/ To notify the Association of Vietnamese Insurers of the list of insurance agents whose insurance agency contracts have been cancelled for their violations of the law or rules of agency practice. Article 85. Rights and obligations of insurance agents 1. An insurance agent has the following rights: a/ To select, and enter into an insurance agency contract with, an insurance business or a foreign branch in accordance with law; b/ To participate in training courses organized by the insurance business or foreign branch for agents; c/ To be provided with information necessary for their activities and other conditions for performance of its/his/her insurance agency contract; d/ To enjoy commissions and other lawful rights and benefits from insurance agency activities; dd/ To request the insurance business or foreign branch to refund its/his/her deposit or mortgaged asset as agreed upon in the insurance agency contract. 2. An insurance agent has the following obligations: a/ To fulfill its/his/her commitments in the insurance agency contract signed with the insurance business or foreign branch; b/ To pay a deposit or mortgage an asset to the insurance business or foreign branch as agreed upon in the insurance agency contract; c/ To introduce, offer and sell insurance products; to provide adequate and accurate information to insurance buyers; to perform insurance contracts within the scope of authorization stated in the agency contract; d/ To participate in training courses organized by insurance agent training institutions; dd/ To submit to the inspection and supervision by competent state agencies and fulfill its/his/her financial obligations in accordance with law. Article 86. Agents selling investment-linked insurance, pension insurance products or insurance products specified in Decree No. 67/2014/ND-CP 1. An insurance agent selling unit-linked insurance products must satisfy the following conditions: a/ Having never violated the regulations on insurance agency and code of professional ethics of agents applied by the insurance business; b/ Having been trained in unit-linked insurance products and certified by the insurance business as having completed the training course for such products; c/ Satisfying one of the following experience conditions: - Having acted as an insurance agent for at least one full year; - Acting as an insurance agent and having worked for at least 6 consecutive months in the financial, banking or insurance sector and possessing a securities training certificate granted by the State Securities Commission; - Having acted as an insurance agent for at least 6 consecutive months and possessing a college or higher degree in finance, banking or insurance. 2. An insurance agent selling universal life insurance products must satisfy the following conditions: a/ Having never violated the regulations on insurance agency and code of professional ethics of agents applied by the insurance business; b/ Having been trained in universal life insurance products and certified by the insurance business as having completed the training course for such products; c/ Having worked for at least 3 months as an insurance agent or having worked for at least 1 year in the financial, banking or insurance sector, or possessing a college or higher degree in finance, banking or insurance. 3. An insurance agent selling pension insurance products must satisfy the following conditions: a/ Possessing an insurance agent certificate granted by a training institution recognized by the Ministry of Finance; b/ Having never violated the regulations on insurance agency and code of professional ethics of agents applied by the insurance business; c/ Having been trained in pension insurance products and certified by the insurance business as having completed the training course for such products. 4. An insurance agent selling insurance products specified in Decree No. 67/2014/ND-CP must satisfy the following conditions: a/ Having acted as an insurance agent for at least 3 months; b/ Having never violated the regulations on insurance agency and code of professional ethics of agents applied by an insurance business; c/ Having been trained in insurance products specified in Decree No. 67/2014/ND-CP for at least 16 hours and certified by the insurance business as having completed the training course for such products. Section 2 INSURANCE AGENT TRAINING INSTITUTIONS Article 87. Insurance agent training institutions 1. An insurance agent training institution must satisfy the following conditions: a/ Having a training program as prescribed in Article 88 of this Decree; b/ Having insurance agent trainers who possess insurance knowledge, legal knowledge and training skills; c/ Having sufficient physical foundations for training. 2. An insurance agent training institution shall compile a dossier to request the Ministry of Finance to approve its insurance agent training program, which must comprise: a/ A written request, made according to a form provided by the Ministry of Finance; b/ Documents proving insurance agent trainers’ knowledge is sufficient for the training. Within 14 days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 88. Insurance agent training program 1. General knowledge: a/ General knowledge about insurance; b/ Duties and professional ethics of agents; c/ Insurance business law; d/ Insurance sale skills; dd/ Rights and obligations of insurance businesses, foreign branches and insurance agents in insurance agency activities. 2. Insurance products: a/ Basic contents of insurance products which insurance businesses and foreign branches may provide; b/ Insurance agency practice. Article 89. Management of insurance agent training 1. The Ministry of Finance shall inspect and supervise insurance agent training activities. In case an insurance agent training institution fails to fully satisfy the insurance agent training conditions prescribed in this Decree, the Ministry of Finance shall stop insurance agent training activities of such institution. 2. Annually, insurance agent training institutions shall report to the Ministry of Finance on the number of organized training courses, number of trained agents and number of granted certificates. Chapter VI PROVISION AND USE OF CROSS-BORDER INSURANCE SERVICES Article 90. Providers and users of cross-border insurance services and insurance brokerage services 1. Providers of cross-border insurance services and insurance brokerage services (below referred to as cross-border insurance service providers) are foreign insurance businesses and insurance brokerage businesses that are headquartered in a country with which Vietnam has concluded trade treaties containing agreements on provision of cross-border insurance services in Vietnam. 2. Users of cross-border insurance services are businesses established in Vietnam of which foreign investors hold over 49% of the charter capital and foreigners working in Vietnam. 3. Reinsurance, international maritime insurance, international aviation insurance, international reinsurance brokerage, consultancy, risk calculation and assessment and claim settlement services shall be provided in accordance with current laws and best practices. 4. The provisions on provision and use of cross-border insurance services in this Decree do not apply to life insurance and health insurance. Article 91. Conditions for provision of cross-border insurance services A foreign insurance business or insurance brokerage business providing cross-border insurance services in Vietnam must satisfy the following conditions: 1. General conditions: a/ Having a license granted by the foreign state management agency in charge of insurance in the locality where the business’s head office is located to conduct insurance operations expected to be provided across the border to Vietnam, and documents proving that the business has operated for at least 10 years by the time of provision of cross-border insurance services in Vietnam; b/ Obtaining a document of the foreign state management agency in charge of insurance in the locality where the business’s head office is located permitting the provision of cross-border insurance services in Vietnam and certifying that the business has not violated the regulations on insurance and insurance brokerage activities and other relevant foreign regulations for 3 years prior to the year of provision of cross-border insurance services in Vietnam. 2. Financial capability conditions: a/ Having totals asset worth at least USD 2 billion for foreign insurance businesses, or at least USD 100 million for foreign insurance brokerage businesses in the fiscal year prior to the year of provision of cross-border insurance services in Vietnam; b/ Being rated at least “BBB” by Standard & Poor’s or Fitch, “B++” by A.M. Best, “Baa1” by Moody’s or having an equivalent rating by another agency with the rating function and experience in the fiscal year prior to the year of provision of cross-border insurance services in Vietnam; c/ Having conducted profitable business for 3 fiscal years prior to the year of provision of cross-border insurance services in Vietnam. 3. Loss handling ability conditions: a/ A foreign insurance business shall deposit at least VND 100 billion at a licensed bank in Vietnam and obtain a payment guarantee letter of such bank undertaking to make payments in case the liability of cross-border insurance contracts in Vietnam exceeds the compulsory deposit level. The deposit may only be used to fulfill the commitments toward insurance buyers when the foreign insurance business becomes insolvent under a decision of a competent state management agency of the country where the business’s head office is located. The deposit may bear an interest as agreed with the bank where it is made. A foreign insurance business may withdraw the whole deposit when its responsibility for contracts on provision of cross-border insurance services in Vietnam is terminated; b/ A foreign insurance business must have a claim settlement process clearly specifying the procedures and sequence of loss handling and time limit for payment of compensation to insurance buyers in Vietnam. In any circumstance, a foreign insurance business or its authorized representative must be present at the place where the loss occurs within 48 hours after receiving a notice of the loss. The time limit for claim settlement is prescribed in Article 29 of the Law on Insurance Business; c/ A foreign insurance brokerage business shall purchase professional liability insurance for its cross-border insurance brokerage services provided in Vietnam. Article 92. Method of provision of cross-border insurance services in Vietnam 1. Foreign insurance businesses shall provide cross-border insurance services in Vietnam through licensed insurance brokerage businesses in Vietnam. 2. Foreign insurance brokerage businesses that provide cross-border insurance services in Vietnam shall act as brokers for licensed insurance businesses or foreign branches in Vietnam. Article 93. Responsibilities of a cross-border insurance service provider 1. To provide to licensed insurance businesses, foreign branches and insurance brokerage businesses in Vietnam that participate in the provision of cross-border insurance services under Article 92 of this Decree documents proving the satisfaction of the conditions on provision of cross-border insurance services under Article 91 of this Decree. 2. Within 120 days after the end of a fiscal year, to send to the Ministry of Finance the financial statement of the preceding year certified by an independent auditing firm and written remarks of the state management agency in charge of insurance of the foreign country where its head office is located on its law observance. 3. To pay taxes and fulfill other financial obligations related to the provision of cross-border insurance services in Vietnam in accordance with the tax laws. Article 94. Responsibilities of subjects involved in the provision of cross-border insurance services Licensed insurance businesses, foreign branches and insurance brokerage businesses in Vietnam that participate in the provision of cross-border insurance services under Article 92 of this Decree shall: 1. Keep documents proving that providers of cross-border insurance services in Vietnam with whom they participate in the provision of such services satisfy the conditions prescribed in Article 91 of this Decree and provide them to functional agencies when so requested. 2. Report on a quarterly basis to the Ministry of Finance their participation in the provision of cross-border insurance services in Vietnam in the quarter within 30 days after the end of the quarter. The report form is set by the Ministry of Finance. Chapter VII REPRESENTATIVE OFFICES OF FOREIGN INSURANCE BUSINESSES AND INSURANCE BROKERAGE BUSINESSES Article 95. Representative offices Vietnam-based representative offices of foreign insurance businesses and insurance brokerage businesses are dependent units of such businesses. Article 96. Activities of representative offices 1. A Vietnam-based representative office of a foreign insurance business or insurance brokerage business may carry out the following activities: a/ Functioning as a liaison office; b/ Conducting market surveys; c/ Formulating investment projects of its business; d/ Promoting and monitoring the implementation of projects in Vietnam funded by its business; dd/ Other activities in accordance with Vietnamese law. 2. Vietnam-based representative offices of foreign insurance businesses and insurance brokerage businesses may not conduct business activities in Vietnam. Article 97. Grant of licenses to establish representative offices 1. A foreign insurance business or insurance brokerage business that wishes to establish a representative office in Vietnam shall send to the Ministry of Finance a dossier of application for a license to establish a representative office under Article 110 of the Law on Insurance Business. 2. Within 30 days after receiving a complete and valid dossier, the Ministry of Finance shall grant a license to establish a representative office in Vietnam to the applicant. In case of refusal to grant a license, the Ministry of Finance shall issue a written reply clearly stating the reason. 3. Within 12 months after being licensed, a representative office shall officially commence its operation. Article 98. Modification and supplementation of licenses to establish representative offices 1. A foreign insurance business or insurance brokerage business may have its license to establish a representative office modified and supplemented by the Ministry of Finance in the following cases: a/ The name, nationality or address of the foreign insurance business or insurance brokerage business is changed; b/ The name of the representative office is changed; c/ The activities of the representative office are changed. 2. A dossier for modification and supplementation of a license must comprise: a/ A written request for modification and supplementation, made according to a form provided by the Ministry of Finance; b/ A written approval of a competent person or body state in the charter of the foreign insurance business or insurance brokerage business, or proof of a change specified in Clause 1 of this Article. 3. Within 11 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 99. Disclosure of contents of activities Within 30 days after obtaining its establishment license or a modified and supplemented one, a representative office shall have the following details published on a daily in the locality where it is located for 5 consecutive issues: 1. Name, nationality and address of the foreign insurance business or insurance brokerage business. 2. Name and address of its office. 3. Its activities and operation duration. Article 100. Operation duration of representative offices 1. The operation duration of a Vietnam-based representative office of a foreign insurance business or insurance brokerage business is 5 years and may be extended. 2. A foreign insurance business or insurance brokerage business that wishes to extend the operation duration of its representative office must satisfy the following conditions: a/ Its Vietnam-based representative office has not been imposed a total fine of VND 200 million or more for administrative violations in insurance business within 12 months by the time of submission of a dossier of request for extension of operation duration; b/ It is lawfully operating by the time of request for extension of operation duration. 3. A dossier for extension of operation duration of a representative office: a/ A written request for extension of operation duration of a representative office, made according to a form provided by the Ministry of Finance; b/ A notarized copy of the license of the foreign insurance business or insurance brokerage business; c/ Notarized copies of the audited financial statements of the foreign insurance business or insurance brokerage business for 3 years preceding the year of submission of the dossier; d/ The resume, copy of the citizen or people’s identity card, passport or another lawful personal identification paper of the person expected to act as the head of the representative office (for the case of change of the head of the representative office). 4. Within 21 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval or a written disapproval clearly stating the reason. Article 101. Termination of operation of representative offices 1. A representative office shall terminate its operation in the following cases: a/ At the request of the foreign insurance business or insurance brokerage business; b/ When the foreign insurance business or insurance brokerage business terminates operation; c/ No request for extension of operation duration is made or the Ministry of Finance refuses to extend its operation duration within 30 days after its operation duration expires; d/ The foreign insurance business or insurance brokerage business has its license revoked; dd/ It has operated for improper purposes or not according to the contents of its establishment license. 2. To terminate its representative office, a foreign insurance business or insurance brokerage business shall submit to the Ministry of Finance 1 dossier set comprising: a/ A written request for operation termination, made according to a form provided by the Ministry of Finance; b/ Proof of the fulfillment of the obligations toward its employees and other organizations and individuals in Vietnam; c/ The original representative office establishment license; d/ Related licenses and decisions issued in the course of operation of the representative office. 3. Within 14 working days after receiving a complete and valid dossier, the Ministry of Finance shall issue a written approval of the representative office’s operation termination. 4. Upon the termination of its operation, a representative office of a foreign insurance business or insurance brokerage business shall complete the procedures and fulfill their obligations as prescribed by law. Article 102. Operation report 1. Vietnam-based representative offices of foreign insurance businesses and insurance brokerage businesses shall submit to the Ministry of Finance their regular operation reports made under the guidance of the Ministry of Finance. 2. Within 30 days after the head, the location or an employee of its representative office is changed, a foreign insurance businesses or insurance brokerage business shall notify the change to the Ministry of Finance. A notice dossier must comprise: a/ A written notice, made according to a form provided by the Ministry of Finance; b/ The resume, copy of the citizen or people’s identity card, passport or another lawful personal identification paper as prescribed by law, for the case of change of the head or an employee of the representative office; c/ Proof of the right to use the representative office’s new location, for the case of change of the location. Chapter VIII THE FUND FOR THE PROTECTION OF THE INSURED Article 103. Setting aside of the fund for the protection of the insured 1. Insurance businesses and foreign branches (except reinsurance businesses) shall set aside the fund for the protection of the insured. 2. Before April 30 every year, the Ministry of Finance shall announce the level of the fund for the protection of the insured to be set aside for application in the fiscal year. The maximum level to be set aside must not exceed 0.3% of the total retained insurance premiums of primary insurance contracts in the preceding fiscal year of an insurance business or a foreign branch. 3. Before June 30 every year, an insurance business or a foreign branch shall set aside 50% of the amount of money payable to the fund of the fiscal year. Before December 31 every year, an insurance business or a foreign branch shall fulfill the obligation of setting aside the fund of the fiscal year. 4. Money shall be set aside until the fund for the protection of the insured reaches 5% of the total assets, for non-life insurance businesses, health insurance businesses and foreign branches, or 3% of the total assets, for life insurance businesses. Article 104. Management of the fund for the protection of the insured 1. The fund for the protection of the insured shall be centrally managed by the Ministry of Finance and be accounted, managed and monitored separately for each type of life insurance, non-life insurance or health insurance. The fund for the protection of the insured has the legal person status and its own bank account and seal. 2. The Ministry of Finance shall monitor the setting aside of the fund for the protection of the insured by insurance businesses and foreign branches, and manage and use the fund in order to ensure capital adequacy and proper purposes in accordance with this Decree and other relevant regulations. Article 105. Principles of use of the fund for the protection of the insured 1. The fund for the protection of the insured may be used in the following cases: a/ An insurance business or a foreign branch that has become insolvent and applied different measures to restore its solvency but still cannot restore its solvency may use the fund for the protection of the insured under a decision of the Ministry of Finance on termination of application of solvency-restoring measures; b/ An insurance business that falls bankrupt may use the fund for the protection of the insured from the time the judge issues a decision to declare the insurance business bankrupt. 2. The fund for the protection of the insured shall be exclusively used for life insurance, non-life insurance and health insurance. 3. The fund for the protection of the insured may be used to pay insurance sums and surrender value; pay insurance claims; and reimburse premiums under insurance contracts at the request of the insolvent insurance business or foreign branch or bankrupt insurance business and each payment shall be made only once for each dossier of request for payment of insurance sum or surrender value, each insurance claim or each reimbursement of premium. Article 106. Expenditures of the fund for the protection of the insured 1. The fund for the protection of the insured may be spent on the following: a/ Payment of insurance sums, surrender value, insurance claims or reimbursement of premiums under insurance policies in case the insurance business or foreign branch becomes insolvent and at the time the Ministry of Finance issues a decision on termination of application of solvency-restoring measures (for insolvent insurance businesses and foreign branches) or at the time a judge issues a decision to declare the insurance business bankrupt (for bankrupt insurance businesses); b/ Payments for the management of the fund, including salaries, allowances, expenses for procurement and repair of assets, service charges and other expenses. 2. Payments from the fund for the protection of the insured shall be made on the following principles: a/ The fund may pay for primary insurance contracts and pay only once for each dossier of request for payment of insurance sum or surrender value, each insurance claim or each reimbursement of premium; b/ In case of transfer of insurance contracts from the insolvent insurance business or foreign branch or bankrupt insurance business to another insurance business or foreign branch, amounts of money paid by the fund within the limits prescribed in Article 107 of this Article shall be directly transferred to the transferee; c/ In case an insurance business or foreign branch becomes insolvent, the fund shall only pay the difference between the amount of money payable by the insurance business or foreign branch under the insurance contract and the amount of money which the insured receives from the insurance business or foreign branch; d/ In case an insurance business falls bankrupt, the fund shall only pay the difference between the amount of money payable by the insurance business under the insurance contract and sum of money which the insured receives under the law on bankruptcy; dd/ In case the insured has the obligation to pay a debt to the insurance business or foreign branch as agreed upon in the insurance contract and as prescribed by law, the fund shall only pay the difference between the amount of money receivable by the insured within the limit prescribed in Article 107 of this Decree and the amount of money owed by the insured to the insurance business or foreign branch. Article 107. Payment limits of the fund for the protection of the insured 1. For life insurance contracts, the fund shall pay up to 90% of the liability level of a life insurance business which, however, must not exceed VND 200 million per insured per contract. The liability level of a life insurance business in each case is prescribed as follows: a/ For an insurance contract under which an insured event has occurred but the insurance benefit has not yet been paid, the liability level of an insurance business is the insurance benefit enjoyable as agreed upon in the contract; b/ For an insurance contract which is of saving type, has a surrender value and is in effect, the liability level of the insurance business equals the surrender value of the contract at the time a competent state agency declares the insurance business insolvent or bankrupt; c/ For an insurance contract which is only of protective type, has no surrender value and is in effect, the liability level of the insurance business equals the premium amount already paid for the remaining duration of the contract; d/ For an investment-linked insurance contract which is in effect, the liability level of the insurance business equals the value of the client’s account at the time a competent state agency declares the insurance business insolvent or bankrupt; dd/ Where a life insurance contract covers many insured parties, the maximum payment level of the fund prescribed at Point a, b, c or d, Clause 1 of this Article may be applied to each insured, unless otherwise agreed upon by the insured parties and insurance business in the contract. 2. For health insurance contracts: a/ The fund shall pay up to 90% of the liability level of an insurance business or a foreign branch which, however, must not exceed VND 200 million per insured per contract; b/ Where a health insurance contract covers many insured parties, the maximum payment level of the fund prescribed at Point a, Clause 2 of this Article may be applied to each insured, unless otherwise agreed upon by the insured parties and insurance business or foreign branch in the contract. 3. For non-life insurance contracts: a/ For a compulsory insurance contract for motor vehicle owner’s civil liability, the fund shall pay the maximum liability level of the insurance business or foreign branch within the scope of insurance prescribed by the current law; b/ For a contract belonging to another insurance operation prescribed by law, the fund shall pay up to 80% of the liability level of the insurance business or foreign branch which, however, must not exceed VND 100 million per contract. Article 108. Procedures for payment from the fund for the protection of the insured 1. An insurance business or a foreign branch shall send to the Ministry of Finance a dossier comprising: a/ A written request for use of the fund, made according to a form provided by the Ministry of Finance; b/ A written certification by a competent agency that the plan on division of the asset value of the insurance business has been completely implemented (for bankrupt insurance businesses); c/ A list of the insured and their dossiers of request for payment of insurance sum or surrender value, payment of insurance claim or reimbursement of premium as agreed upon in the insurance contracts which the insurance business or foreign branch is unable to pay; receivables being outward reinsurance compensations and claims from third parties by the time the Ministry of Finance issues a decision on termination of application of solvency-restoring measures (for insolvent insurance businesses and foreign branches) or by the time the plan on division of asset value of the business has been completely implemented (for bankrupt insurance businesses). 2. Within 30 days after receiving a complete and valid dossier prescribed in Clause 1 of this Article, the Ministry of Finance shall: a/ Examine the dossiers of request for payment of insurance sums or surrender value, payment of insurance claims or reimbursement of premiums of the insurance business or foreign branch in order to accurately determine the amount of money to be paid; b/ Work out a plan on payment of insurance sums, surrender value and insurance claims; c/ Publicly announce the payment to the insured on Vietnamese-language dailies (at least one central or the daily of the locality where the head office, branches and transaction offices of the insurance business or foreign branch are located) for 3 consecutive issues, and at the same time post up the list of payees at the head office, branches and transaction offices of the insurance business or foreign branch and on the websites of the Ministry of Finance and insurance business or foreign branch. Such announcement must clearly state the place, time and method of payment by the fund; d/ Make payments from the fund. 3. A person entitled to the fund’s payment of insurance sum, surrender value, insurance claim or reimbursement of premium must satisfy the following conditions: a/ Being on the list of payees enclosed with their dossiers for which the Ministry of Finance has decided to make payments; b/ Possessing papers proving his/her lawful entitlement to payments from the fund, including: citizen or people’s identity card, passport or another lawful personal identification paper; insurance contract; letter of authorization to receive payments (if any). Article 109. Investment activities of the fund for the protection of the insured 1. The idle money of the fund for the protection of the insured may only be invested in government bonds and government-guaranteed corporate bonds or deposited at commercial banks. 2. The Ministry of Finance may invest by itself or entrust an institution to invest the idle money of the fund for the protection of the insured. In case of entrustment, the entrusted institution must have an investment entrustment license granted by a competent agency suitable to entrusted investments. Chapter IX MANAGEMENT AND SUPERVISION Article 110. Responsibilities of the Ministry of Finance 1. To guide the implementation of legal documents on insurance business; to formulate policies and regulations on insurance business, and strategies, master plans, plans and policies on development of Vietnam’s insurance market. 2. To grant and revoke licenses of insurance businesses, foreign branches and insurance brokerage businesses; to grant and revoke licenses to establish Vietnam-based representative offices of foreign insurance businesses and insurance brokerage businesses. 3. To issue and approve, and guide the implementation of, insurance rules, terms, premium rates and commission rates. 4. To supervise insurance business activities through professional operations, the financial status, corporate governance, risk management and law observance of insurance businesses, insurance brokerage businesses and foreign branches. To apply necessary measures to ensure that insurance businesses, insurance brokerage businesses and foreign branches satisfy the financial requirements and fulfill commitments to insurance buyers. 5. To organize the provision of information and making of statistics and forecasts on the insurance market. 6. To enter into international cooperation on insurance. 7. To permit insurance businesses and insurance brokerage businesses to operate overseas. 8. To manage activities of Vietnam-based representative offices of foreign insurance businesses and insurance brokerage businesses. 9. To organize the training and development of insurance managers and professionals. 10. To inspect and supervise insurance business activities; to settle complaints and denunciations and handle violations of the law on insurance business. 11. To organize the dissemination of the law on insurance business. 12. To organize the apparatus to perform the state management of insurance business. 13. To manage the use of the fund for the protection of the insured. Article 111. Responsibilities of ministries and ministerial-level agencies Within the ambit of their respective tasks and powers, the ministries and ministerial-level agencies have the following responsibilities: 1. To coordinate with the Ministry of Finance in formulating policies and regulations on insurance business. 2. To coordinate with the Ministry of Finance in inspecting and supervising the observance and handling of violations of the law on insurance business. 3. To perform other tasks under their competence in accordance with law. Article 112. Responsibilities of provincial-level People’s Committees Within the ambit of their tasks and powers, provincial-level People’s Committees have the following responsibilities: 1. To carry out procedures for the establishment and operation of insurance businesses, insurance brokerage insurances, and Vietnam-based representative offices of foreign insurance businesses and insurance brokerage businesses in their localities after the Ministry of Finance grant establishment and operation licenses. 2. To coordinate with the Ministry of Finance in handling violations of the law on insurance business in their localities. 3. To perform other tasks as prescribed by law. Chapter X INSPECTION, SUPERVISION AND HANDLING OF VIOLATIONS Article 113. Inspection and supervision of insurance business activities 1. The inspection of insurance business activities shall be conducted under Article 122 of the Law on Insurance Business and regulations on inspection of businesses. 2. The supervision of insurance business activities shall be conducted as follows: a/ The supervision of insurance business activities shall be conducted according to the functions and competence of supervisors and in accordance with law and may not be conducted more than once on the same matter at a business in a year (except extraordinary supervision); b/ The supervision of insurance business activities shall be conducted under a decision of a competent person and a written record of conclusions of the supervision shall be made upon completion of the supervision. The head of a supervision team shall assume responsibility for contents of the written record and conclusions of the supervision. 3. The inspection and supervision of insurance business activities of Vietnam-based branches of foreign non-life insurance businesses shall be conducted as follows: a/ The Ministry of Finance of Vietnam shall inspect and supervise activities of Vietnam-based branches of foreign non-life insurance businesses in accordance with law; b/ State management agencies in charge of insurance in foreign countries where foreign non-life insurance businesses’ head offices are located shall inspect and supervise activities of Vietnam-based branches of such businesses as follows: - Before conducting inspection and supervision, these agencies shall notify their inspection and supervisions plans to the Ministry of Finance of Vietnam; - After completing the inspection and supervision, these agencies shall provide inspection and supervisions results to the Ministry of Finance of Vietnam. Article 114. Handling of violations Violators of the law on insurance business shall, depending on the nature and seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability in accordance with law. Chapter XI IMPLEMENTATION PROVISIONS Article 115. Effect 1. This Decree takes effect on July 1, 2016. 2. The Government’s Decree No. 45/2007/ND-CP of March 27, 2007, detailing the implementation of a number of articles of the Law on Insurance Business; Decree No. 123/2011/ND-CP of December 28, 2011, detailing the implementation of a number of articles of the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business and amending and supplementing a number of articles of Decree No. 45/2007/ND-CP of March 27, 2007; Decree No. 68/2014/ND-CP of July 9, 2014, amending and supplementing a number of articles of Decree No. 45/2007/ND-CP of March 27, 2007, and Decree No. 46/2007/ND-CP of March 27, 2007, prescribing the financial regime applicable to insurance businesses and insurance brokerage businesses, cease to be effective on the date this Decree takes effect. Article 116. Implementation responsibility Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and subjects of application of this Decree shall implement this Decree.- On behalf of the Government Prime Minister NGUYEN XUAN PHUC