Laws of Vietnam

THE GOVERNMENT

Article 1.- Scope of application

1. This Decree provides in detail for the implementation of a number of articles of the Law on Insurance Business.

2. This Decree applies to insurance business, reinsurance business, insurance brokerage activities and insurance agent's activities.

3. This Decree does not apply to social insurance, health insurance, deposit insurance and other types of insurance that are provided by the State for non-commercial purposes.

Article 2.- Policies on development of the insurance market

1. To develop the insurance market in a comprehensive, safe and healthy manner in order to meet insurance needs of the economy and population; to ensure that organizations and individuals enjoy insurance products of international standards; to create an equal legal and business environment with a view to bringing into the fullest play resources of all economic sectors, increasing the competitiveness of the insurance industry and meeting requirements of international economic integration.

2. The State shall create favorable conditions for insurance enterprises to research and develop new insurance products and shall encourage individuals and organizations to participate in insurance.

3. The State shall create conditions for the Vietnamese Insurers Association and socio-professional organizations to enhance their self-management role in the insurance domain; shall ensure fair competition for the legitimate rights and interests of organizations and individuals participating in insurance.

Article 3.- Conditions and principles for participation in insurance in Vietnam

1. Organizations and individuals that wish to conduct insurance business, reinsurance business or insurance brokerage activities in Vietnam must obtain establishment and operation licenses under the provisions of the Law on Insurance Business.

2. Organizations and individuals that seek for insurance may choose insurance enterprises and take out insurance with insurance enterprises licensed to operate in Vietnam. No organization or individual may illegally intervene into the insurance buyers' right to choose insurance enterprises and insurance brokerage enterprises.

Article 4.- Insurance operations and products

1. Life insurance covers operations defined in Clause 1, Article 7 of the Law on Insurance Business and investment-linked insurance operations.

2. The Ministry of Finance shall issue a detailed list of insurance products of insurance operations defined in Article 7 of the Law on Insurance Business.

3. Insurance enterprises may only deal in insurance products of insurance operations which are stated in their establishment and operation licenses and when they meet all conditions on financial capacity and professional qualifications of professional personnel under the guidance of the Ministry of Finance.

Article 5.- Compulsory insurance

1. Insurance enterprises that are licensed to conduct compulsory insurance business may not refuse to sell compulsory insurance.

2. Organizations and individuals that are subject to compulsory insurance are obliged to participate in compulsory insurance.

Article 6.- Conditions for grant of establishment and operation licenses

1. Vietnamese or foreign organizations or individuals that contribute capital to the establishment of insurance enterprises or insurance brokerage enterprises must meet the following conditions:

a/ Not facing bans under Clause 2, Article 13 of the Enterprise Law;

b/ Conditions specified in Article 63 of the Law on Insurance Business.

2. Foreign insurance enterprises that invest in establishing insurance enterprises with 100% foreign-invested capital or joint-venture insurance enterprises with Vietnamese enterprises must meet the following conditions:

a/ They are permitted by competent bodies in their respective foreign countries to conduct insurance business in the domains that are planned to be carried out in Vietnam;

b/ They have been lawfully operating in accordance with regulations of the countries in which they are headquartered for at least 10 years by the time they submit the dossiers of application for licenses;

c/ They have a total asset of USD 2 billion or more by the year preceding the year when they submit the dossiers of application for licenses;

d/ They do not seriously violate regulations on insurance business and other provisions of law in the countries in which they are headquartered for three consecutive years preceding the year when they submit the dossiers of application for licenses.

2. Foreign insurance brokerage enterprises that invest in establishing insurance brokerage enterprises with 100% foreign-invested capital or joint-venture insurance brokerage enterprises with Vietnamese enterprises must meet the following conditions:

a/ They are permitted by competent bodies in their respective foreign countries to conduct insurance brokerage business in the domains that are planned to be carried out in Vietnam;

b/ They have been lawfully operating in accordance with regulations of the countries in which they are headquartered for at least 10 years by the time they submit the dossiers of application for licenses;

c/ They have run profitable business activities for three consecutive years preceding the year when they submit the dossiers of application for licenses;

d/ They do not seriously violate regulations on insurance brokerage business and other provisions of law in the countries in which they are headquartered for three consecutive years preceding the year when they submit the dossiers of application for licenses.

Article 7.- Dossiers of and procedures for application for establishment and operation licenses

1. A dossier of application for an establishment and operation license required under the Enterprise Law, its guiding documents and Article 64 of the Law on Insurance Business consists of:

a/ An application for an establishment and operation license, made according to a form set by the Ministry of Finance;

b/ Draft charter of the enterprise in compliance with the Enterprise Law, the Law on Insurance Business and their guiding documents. The draft charter must contain the signatures of the at-law representative, founding shareholders or their authorized representatives;

c/ The list of founding shareholders and enclosed papers as follows:

- For individual shareholders: copies of people's identity cards, passports or other lawful personal certification papers and judicial records made according to a form prescribed by law;

- For institutional shareholders: copies of establishment decisions, business registration certificates or other equivalent documents of organizations; documents of authorization, people's identity cards, passports or other lawful personal certification papers of their authorized representatives.

For shareholders that are foreign organizations, copies of business registration certificates must be authenticated by agencies with which those organizations have made registration within three months before the date of submission of the dossiers of application for licenses.

d/ Certification of a bank licensed to operate in Vietnam of the charter capital amount in a blocked account opened with this bank;

e/ Business plan for the first five years in line with the proposed scope of business, specifying the methods of deducting operational reserves, reinsurance program, investment capital, business effectiveness, solvency of the insurance enterprise and economic benefits from the establishment of the enterprise, enclosed with the operational process, internal supervision process and risk management process;

Information on the methods of deducting operational reserves, reinsurance program and solvency is not required for insurance brokerage enterprises;

f/ The list of managers and executives of the enterprise and their notarized curricula vitae and diplomas evidencing their professional capacity and qualifications;

g/ Contributed capital amount and methods of contribution, the list of organizations and individuals holding 10% of charter capital or more; their financial status and other information relating to these organizations and individuals;

h/ Rules, terms, and insurance premium tariffs and commissions of insurance products to be provided. This provision does not apply to insurance brokerage enterprises.

2. A dossier of application for an establishment and operation license of a joint-venture insurance enterprise or joint-venture insurance brokerage enterprise required under Clause 1, Article 109 of the Law on Insurance Business consists of:

a/ Documents specified at Points a, b, d, e, f and h, Clause 1 of this Article;

b/ The charters and establishment and operation licenses of the joint venture parties;

c/ The joint venture contract;

d/ The annual balance sheets and financial statements certified by an independent audit organization on the operation situation of the joint venture parties in the latest three years;

e/ The document of a competent authority of the country in which the enterprise is headquartered:

- Permitting the insurance enterprise or insurance brokerage enterprise to establish a joint-venture insurance enterprise or insurance brokerage enterprise in Vietnam. If this written permission is not required under regulations of the country in which the enterprise is headquartered, evidence of this non-requirement is required;

- Certifying that the insurance enterprise or insurance brokerage enterprise is conducting insurance business or insurance brokerage business in the domains proposed to be carried out in Vietnam;

- Certifying that the insurance enterprise or insurance brokerage enterprise has a sound financial status and fully meets management requirements in the country in which it is headquartered.

3. A dossier of application for an establishment and operation license of an insurance enterprise or insurance brokerage enterprise with 100% foreign-invested capital required under Clause 2, Article 109 of the Law on Insurance Business consists of:

a/ Documents specified at Points a, b, d, e, f and h, Clause 1 of this Article;

b/ The charter and establishment and operation license of the foreign insurance enterprise or insurance brokerage enterprise issued in the country in which it is headquartered;

c/ The paper of authorization to the general director (director) in Vietnam;

d/ The annual balance sheets and financial statements certified by an independent audit organization on the operation situation of the foreign insurance enterprise or insurance brokerage enterprise in the country in which it is headquartered in the latest three years;

e/ The document of a competent authority of the country in which the enterprise is headquartered:

- Permitting the insurance enterprise or insurance brokerage enterprise to establish a joint-venture insurance enterprise or insurance brokerage enterprise in Vietnam. If this written permission is not required under regulations of the country in which the enterprise is headquartered, evidence of this non-requirement is required;

- Certifying that the insurance enterprise or insurance brokerage enterprise is conducting insurance or insurance brokerage business in the domain proposed to be carried out in Vietnam;

- Certifying that the insurance enterprise or insurance brokerage enterprise has a sound financial status and fully meets management requirements in the country in which it is headquartered.

4. A dossier of application for a license of an insurance enterprise or insurance brokerage enterprise shall be made in 3 (three) sets, including 1 (one) original set and 2 (two) copy sets. A dossier of application for a license of a foreign-invested insurance enterprise or insurance brokerage enterprise shall be made in 3 (three) sets, each including 1 (one) Vietnamese version and 1 (one) version in a common foreign language. Vietnamese copies and Vietnamese translations of foreign-language copies must be certified by a Vietnamese notary office in accordance with the notary law. Investors are responsible for the accuracy of their dossiers of application for licenses.

5. The time limit for grant of establishment and operation licenses is prescribed in Article 65 of the Law on Insurance Business. The establishment and operation license granted by the Ministry of Finance is concurrently the business registration certificate.

6. The Ministry of Finance shall provide for the order and procedures for appraising dossiers of application for establishment and operation licenses of insurance enterprises or insurance brokerage enterprises.

Article 8.- Licensing fees

Insurance enterprises and insurance brokerage enterprises which are granted establishment and operation licenses shall pay licensing fees in accordance with the law on charges and fees.

Article 9.- Procedures to be carried out after insurance enterprises or insurance brokerage enterprises are granted establishment and operation licenses

1. Within 30 days after the date of grant of its establishment and operation license, an insurance enterprise or insurance brokerage enterprise shall publish an announcement in five consecutive issues of a central daily and a local newspaper in the locality where it is headquartered with the following major details:

a/ Names and addresses of the head office, branch(es) and representative office of the insurance enterprise;

b/ Contents, scope and duration of operation;

c/ Charter capital level and charter capital amount already contributed;

d/ Full name of the at-law representative of the enterprise;

e/ Number and date of grant of the establishment and operation license;

f/ Insurance or insurance brokerage operations permitted to be conducted.

2. Within 12 months since the date of grant of its establishment and operation license, an insurance enterprise or insurance brokerage enterprise shall complete all necessary procedures as required by law before it can officially conduct insurance business or insurance brokerage business. Past this time limit, if it fails to start operation, its establishment and operation license shall be revoked.

3. In the course of operation, if an insurance enterprise or insurance brokerage enterprise makes changes which are approved by the Ministry of Finance under Clause 1, Article 69 of the Law on Insurance Business, it shall publicly announce these changes under the provisions of Clause 1 of this Article.

Article 10.- Operational organization of insurance enterprises and insurance brokerage enterprises

The operational organization of an insurance enterprise or insurance brokerage enterprise consists of:

1. Head office;

2. Branch, transaction center, member company with a dependent accounting system (hereinafter referred to as "branch") attached to the insurance enterprise or insurance brokerage enterprise, which is responsible for performing wholly or partially the functions of the enterprise, including the functions of an authorized representative;

3. Representative office, which is a dependent unit of the insurance enterprise or insurance brokerage enterprise and is responsible for representing under authorization for the interest of the enterprise and protecting these interests;

4. Place of business, transaction office (hereinafter referred to as "business place"), which is a place where specific business activities are carried out and which is attached to a branch of the insurance enterprise or insurance brokerage enterprise.

Article 11.- Conditions on establishment of a branch or representative office

1. An insurance enterprise or insurance brokerage enterprises that wishes to establish a branch or representative office must meet the following conditions:

a/ Its actually owned charter capital complies with regulations of the Ministry of Finance;

b/ Its management apparatus and internal supervision and control system operate effectively;

c/ It commits no serious violations of law for 3 consecutive years before the year of submission of the application dossier. For an insurance enterprise, it commits no violation of regulations on solvency;

d/ Its branch or representative office has an organization and operation regulation;

e/ Heads of the branch or representative office have professional experience and knowledge of insurance business and are other than the forbidden subjects as prescribed by law;

f/ It files a dossier of application for establishing a branch or representative office as prescribed in Clause 2 of this Article.

2. A dossier of application for the establishment of a branch or representative office consists of:

a/ An application for the establishment of a branch or representative office signed by an authorized representative of the enterprise, which briefly states the necessity, name, location, content and scope of operation of the branch or representative office;

b/ Operation plan of the branch or representative for the first three years which specifies customer needs; market forecasts; the contents and scope of operation, insurance products expected to be offered, expected business results; planned organizational structure and personnel; proposed location of the branch or representative office and its material and technical base;

c/ Valid papers evidencing that the insurance enterprise or insurance brokerage enterprise meets all conditions specified in Clause 1 of this Article.

3. Within 30 days from the date of full receipt of a valid and complete dossier, the Ministry of Finance shall issue a written reply as to whether to permit or refuse the establishment of the branch or representative office. In case of refusal, the Ministry of Finance shall issue a written explanation.

Article 12.- Change of contents, scope and duration of operation

1. An insurance enterprise or insurance brokerage enterprise that wishes to expand the contents, scope and duration of operation stipulated in its establishment and operation license must meet the following conditions:

a/ Conditions specified at Points a, b and c, Clause 1, Article 11 of this Article, enclosed with valid documents as proofs;

b/ Filing to the Ministry of Finance an application enclosed with a business plan for the next three years which describes customer needs; market forecast; expected business results and material and technical bases.

2. An insurance enterprise or insurance brokerage enterprise that wishes to reduce the contents, scope and duration of operation stipulated in its establishment and operation license shall submit to the Ministry of Finance a dossier consisting of the following documents:

a/ An application, containing an explanation for the reduction, ways of dealing with commitments and liabilities toward customers, laborers, the State and other related subjects;

b/ A report on the operation situation, financial status and management work at the time of application for reducing the contents, scope and duration of operation.

3. Within 30 days from the date of full receipt of the application and valid dossier requesting permission for changes in the contents, scope and duration of operation of an insurance enterprise or insurance brokerage enterprise, the Ministry of Finance shall issue a reply as to whether to permit or refuse such changes. In case of refusal, the Ministry of Finance must issue a written explanation.

Article 13.- Managers and directors of insurance enterprises, insurance brokerage enterprises

1. The chairman of the Board of Management or general director (director) of an insurance enterprise or insurance brokerage enterprise must have professional qualifications and enterprise management and execution capabilities according to the guidance of the Ministry of Finance. The general director (director) of an insurance enterprise or insurance brokerage enterprise must reside in Vietnam during his/her term of office.

2. Any appointment or replacement of the chairman of the Board of Management or general director (director) of an insurance enterprise or insurance brokerage enterprise is subject to approval of the Ministry of Finance.

3. Within 30 days from the date of receipt of a valid written request and dossier from an insurance enterprise or insurance brokerage enterprise, the Ministry of Finance shall issue a written reply to the enterprise as to whether to approve or refuse to approve the request. In case of refusal, the Ministry of Finance shall give a written explanation.

4. The Ministry of Finance shall stipulate standards and conditions of other management titles in an insurance enterprise.

Article 14.- Appointed actuaries

1. Appointed actuaries have the tasks of ensuring financial safety for life insurance enterprises. They are entitled to professional independence and shall not concurrently hold any of the following positions:

a/ General director;

b/ Chief accountant;

c/ Member of the Board of Management.

2. The Ministry of Finance shall stipulate standards and employment of appointed actuaries of life insurance enterprises.

Article 15.- Internal supervision and control

1. Insurance enterprises or insurance brokerage enterprises shall formulate and implement, and supervise the implementation of, regulations on responsibility division in their enterprises; processes of product research and development, exploitation, assessment, compensation, reinsurance and other operational processes in accordance with law.

2. Insurance enterprises or insurance brokerage enterprises shall set up an internal supervision and control system to ensure safety and compliance with law in their operations.

3. Insurance enterprises shall regularly check the observance of law, operational processes and internal regulations; shall directly check and control operations in every field at their head offices, branches, representative offices and business places in order to accurately evaluate the results of business activities and current financial status of the enterprises.

4. The results of internal supervision and control must be presented in writing and kept at the enterprises.

Article 16.- Split, consolidation, merger, acquisition of enterprises and transfer of contributed capital portions

1. Any split, consolidation, merger, acquisition or transfer of at least 10% of the charter capital of an insurance enterprise or insurance brokerage enterprise must ensure:

a/ Stable operation of the insurance enterprise or insurance brokerage enterprise concerned;

b/ No effect on legitimate rights and interests of insurance buyers, laborers and the State;

c/ Compliance with relevant laws;

d/ Written approval of the Ministry of Finance.

2. The Ministry of Finance shall provide guidance on split, consolidation, merger, acquisition of, and transfer of contributed capital portions in, insurance enterprises and insurance brokerage enterprises.

Article 17.- Sale of insurance

1. Insurance enterprises are entitled to sell insurance in the following forms:

a/ Direct sale;

b/ Sale through insurance agents and brokers;

c/ Sale through bidding;

d/ Other forms in accordance with law.

2. Insurance enterprises may offer to sell insurance to potential clients in accordance with the contents and scope of operation stipulated in their establishment and operation licenses.

3. Insurance enterprises may not coerce organizations and individuals to buy insurance in any form.

Article 18.- Sale of insurance through insurance agents and insurance brokers

1. Insurance enterprises may authorize insurance agents to sell their insurance products.

2. Insurance brokerage enterprises may provide guidance and advice to clients on acquiring insurance at the latter's request.

3. Insurance brokerage enterprises and insurance agents have the obligations:

a/ To provide honest explanations on all information relating to insurance products for potential clients to better understand insurance products they intend to buy;

b/ Not to disclose or provide information that may cause damage to legitimate rights and interests of insurance buyers;

4. Insurance brokerage enterprises and insurance agents may not exert influence so that insurance buyers supply inaccurate information or refuse to supply necessary information to insurance enterprises.

Article 19.- Sale of insurance through bidding

1. Insurance may be sold and bought through bidding in accordance with the bidding law and the provisions of Clause 2 of this Article. All the parties concerned are self-responsible for the bidding results.

2. A bidding shall be held under the following provisions:

a/ The bidding must be open, the same bidding conditions shall be applied to all insurance enterprises participating in the bidding;

b/ The bidding dossiers submitted by insurance enterprises must specify terms and conditions of insurance, insurance duration, rules and premium tariffs and other details as required in the tender invitation document.

c/ The bidding shall be evaluated on the basis of the tender invitation document, premium quotation and other related services.

Article 20.- Insurance rules, terms and premium tariffs

1. The Ministry of Finance shall promulgate insurance rules, terms, premium tariffs and minimum insurance sum applicable to each type of compulsory insurance.

2. For products of life insurance, and health insurance and personal accident insurance associated with life insurance, insurance enterprises shall follow the insurance rules, terms and premium tariffs already approved by the Ministry of Finance.

3. For non-life insurance products, insurance enterprises may on their own formulate and implement the insurance rules, terms and premium tariffs.

4. Insurance rules, terms and premium tariffs formulated by insurance enterprises must ensure the following requirements:

a/ They comply with law, accord with the practice, moral standards, culture and customs of Vietnam;

b/ Insurance rules and terms are written in an accurate, simple, clear and easy-to- understand language. Terminologies which need to be clearly expressed should be clearly defined in the insurance rules and terms.

c/ The insurable interests, subjects of insurance, scope of insurance and insurable risks, interests and obligations of the insurance buyer and the insured; obligations of the insurance enterprise; exclusions; insurance payment method; and dispute resolution regulations are presented explicitly and transparently;

d/ Premium tariffs are built based on statistical data and ensure solvency of the insurance enterprise and compatibility with the insurance conditions and liability.

Article 21.- Procedures for approving insurance products

1. For insurance products whose rules, terms and premium tariffs are subject to approval of the Ministry of Finance as provided for in Clause 2, Article 20 of this Decree, the insurance enterprise shall make a written request to the Ministry of Finance enclosed with the following documents:

a/ Insurance rules, terms and premium tariffs and commissions of the insurance products that are proposed to be introduced;

b/ Formula, methods and justification of the bases on which insurance premiums and technical reserves of the proposed insurance products are computed.

2. Within 30 days from the date of receipt of a complete and valid dossier, the Ministry of Finance shall give a written reply as to whether to approve or refuse to approve the insurance product. In case of refusal, the Ministry of Finance shall give a written explanation.

Article 22.- Insurance commissions

1. Insurance enterprises may only pay insurance commissions out of the amount of insurance premiums actually collected at the rates not higher than those set by the Ministry of Finance.

2. Eligible payees of insurance commissions include:

a/ Insurance brokerage enterprises;

b/ Insurance agents.

3. Insurance commissions may not be paid to the following organizations and individuals:

a/ Organizations and individuals that are not permitted to carry out insurance agent's or insurance broker's operations in Vietnam;

b/ Insurance buyers, except for insurance agents that buy life insurance for themselves;

c/ Staffs and employees of the insurance enterprises.

Article 23.- Reinsurance

An insurance enterprise may transfer part of the liability it has agreed to insure to one or more insurance enterprises but may not cede the entire liability it has assumed under an insurance contract to another insurance enterprise in order to earn a reinsurance commission under the guidance of the Ministry of Finance.

Article 24.- Assumption of reinsurance

An insurance enterprise may assume reinsurance of the liability insured by another insurance enterprise. Upon assumption of reinsurance, an insurance enterprise shall undertake risk assessment to ensure that the liability assumed matches their financial capacity.

Article 25- Prevention and mitigation of loss

1. An insurance enterprise may take preventive measures to secure safety of the subject matter of insurance with the consent of the insurance buyer or competent state agencies.

2. Measures to prevent and mitigate loss include:

a/ Organizing propaganda and education;

b/ Financing and supporting facilities and materials which are required to prevent and restrict risks;

c/ Providing financial support for the building of works with a view to preventing and mitigating the severity of risks which the subject matters of insurance may face.

d/ Hiring other organizations or individuals to supervise prevention and mitigation of loss.

3. Expenses for prevention and mitigation of loss are calculated as a percentage of earned insurance premiums under the guidance of the Ministry of Finance.

Article 26.- Loss surveys

1. Loss surveys shall be conducted in accordance with Article 48 of the Law on Insurance Business. The loss survey agency is responsible for the results of its surveys.

2. Loss surveys shall be conducted in an honest, fair, scientific, timely and accurate manner.

3. The loss survey results shall be reflected in the survey records.

Article 27.- Transfer of insurance contracts

1. Transfer of insurance contracts shall be undertaken in accordance with Articles 74, 75 and 76 of the Law on Insurance Business and the guidance of the Ministry of Finance.

2. In case of transferring all insurance contracts of one or more insurance operations, the insurance enterprise concerned shall make a written request to the Ministry of Finance for amendments and supplements to its establishment and operation license.

Article 28.- Principles of insurance agent's operations

1. Organizations and individuals that carry out insurance agent's operations must satisfy all conditions set out in Article 86 of the Law on Insurance Business and shall enter into insurance agency contracts in accordance with Article 87 of the Law on Insurance Business.

2. Officials and employees of an insurance enterprise may not act as insurance agents of that enterprise.

3. Organizations and individuals may not concurrently act as agents of other insurance enterprises without written consent of the insurance enterprise of which they are agents.

4. Insurance agents may not incite clients to cancel valid insurance contracts in any form.

Article 29.- Rights and obligations of insurance enterprises in insurance agent's operations

1. An insurance enterprise has the following rights:

a/ To select insurance agents and enter into insurance agency contracts;

b/ To determine specific rates of insurance commissions in the insurance agency contracts in accordance with the provisions of law;

c/ To receive and manage deposits or assets that are mortgaged as security by insurance agents, as agreed upon in the insurance agency contracts;

d/ To request insurance agents to pay insurance premiums collected as agreed upon in the insurance agency contracts;

e/ To examine and supervise the performance of insurance agency contracts;

f/ To enjoy other legitimate benefits generated from the insurance agent's operations.

2. An insurance enterprise has the following obligations:

a/ To provide agent training and issue agent training certificates under the provisions of law;

b/ To provide guidance, sufficient and accurate information and documents relating to insurance agent's operations;

c/ To meet liabilities which may arise from the concluded insurance agency contracts;

d/ To pay insurance commissions as agreed upon in the insurance agency contracts;

e/ To refund to insurance agents deposits or the mortgaged assets as agreed upon;

f/ To take responsibility for loss or damage caused by its insurance agent's operations as agreed upon in the insurance agency contracts;

g/ To be subject to the supervision and inspection of competent state agencies regarding the activities carried out by its insurance agents.

h/ To inform to the Vietnam Insurance Association the list of agents the enterprise has terminated their agency contracts due to violations of law or practice rules.

Article 30.- Rights and obligations of insurance agents

1. An insurance agent has the following rights:

a/ To choose and enter into insurance agency contracts with an insurance enterprise in accordance with law;

b/ To attend training and retraining courses to raise professional qualifications for insurance agents organized by the insurance enterprise;

c/ To be provided with necessary information relating to its operations and other conditions for the performance of the insurance agency contract;

d/ To enjoy insurance commissions and other legitimate rights and benefits generated from its insurance agent's operations.

e/ To request the insurance enterprise to return deposits or mortgaged assets as agreed upon in the insurance agency contracts.

2. An insurance agent has the following obligations:

a/ To abide by commitments made in the insurance agency contract which has been entered with the insurance enterprise;

b/ To deposit to or mortgage its assets with the insurance enterprise if so agreed upon in the insurance agency contract;

c/ To introduce, solicit and offer to sell insurance products; to provide adequate and accurate information to insurance buyers; to perform insurance contracts within the scope of authority delegated under the insurance agency contract;

d/ To attend training courses to raise qualifications which are organized by agent training units under the provisions of Article 31 of this Decree.

e/ To be subject to the supervision of competent state agencies and fulfill all required financial obligations in accordance with law.

Article 31.- Training of insurance agents

1. Institutions that provide insurance agent training must meeting the following conditions:

a/ Having training programs in accordance with Article 32 of this Decree;

b/ Trainers of insurance agents possess professional expertise on insurance, legal knowledge and teaching skills;

c/ Having adequate training facilities.

2. Insurance agent training institutions shall make a written proposal to the Ministry of Finance for approval of the insurance agent training programs enclosed with a written justification of the knowledge of its trainers and the availability of facilities needed for the training. Within 30 days from the date of receipt of the written proposal together with the valid dossier from the insurance agent training institution, the Ministry of Finance shall give a written reply as to whether to approve or refuse to approve the proposal. In case of refusal, the Ministry of Finance shall give a written explanation.

Article 32.- Insurance agent training programs

An insurance agent training program covers the following main contents:

1. General knowledge of insurance;

2. Responsibilities of insurance agent; insurance agent's practice ethics;

3. Insurance business law;

4. Contents of insurance products permitted to be offered by the insurance enterprise;

5. Insurance-selling skills;

6. Rights and obligations of the insurance enterprise and insurance agent in insurance agent's operations;

7. Practicing as insurance agent.

Article 33.- Management of insurance agent training

1. The Ministry of Finance shall examine and supervise the training of insurance agents. When an insurance agent training institution fails to meet conditions for insurance agent training as stipulated in Article 32 of this Decree, the Ministry of Finance shall terminate its operation.

2. Annually, the insurance agent training institution shall report to the Ministry of Finance on the number of training courses held, the number of trained insurance agents and the number of certificates issued in that year.

Article 34.- Representative offices

Vietnam-based representative offices of foreign insurance enterprises or foreign insurance brokerage enterprises are dependent units of these enterprises.

Article 35.- Contents of operation of representative offices

1. Vietnam-based representative offices of foreign insurance enterprises or foreign insurance brokerage enterprises may carry out the following activities:

a/ Acting as a liaison office;

b/ Conducting market researches;

c/ Preparing investment projects of the foreign insurance enterprise or foreign insurance brokerage enterprise;

d/ Promoting and monitoring the implementation of projects sponsored by the foreign insurance enterprise or foreign insurance brokerage enterprise in Vietnam;

e/ Other activities which are carried out in accordance with Vietnamese law.

2. Vietnam-based representative offices of foreign insurance enterprises or foreign insurance brokerage enterprises may not carry out business activities in Vietnam.

Article 36.- Fees for grant of licenses and announcement of contents of operation

1. The fee per grant of a license or extension of operation duration is provided for by the law on charges and fees.

2. Within 12 months from the date of grant of its license, the representative office shall officially commence its operation. Within 30 days from the date of grant of its establishment license, the representative office shall publicly announce the contents of its license.

Article 37.- Duration of operation

1. The duration of operation of a Vietnam-based representative office of a foreign insurance enterprise or foreign insurance brokerage enterprise does not exceed 5 years and can be extended.

2. A Vietnam-based representative office of a foreign insurance enterprise or foreign insurance brokerage enterprise wishing to extend the duration of its operation in Vietnam shall submit an application for extension.

3. The establishment license of a representative office shall be withdrawn in the following cases:

a/ After 30 days since the expiration of the duration of operation without extension or since the application for extension is rejected by the Ministry of Finance;

b/ The license of the foreign insurance enterprise or foreign insurance brokerage enterprise is withdrawn;

c/ The representative office operates for improper purposes or not in strict compliance with the provisions of its license.

4. Upon the termination of its operation, the representative office of a foreign insurance enterprise or foreign insurance brokerage enterprise shall fully comply with procedures and obligations provided for by law.

Article 38.- Reporting

Vietnam-based representative offices of foreign insurance enterprises and foreign insurance brokerage enterprises shall send periodical reports on their operation to the Ministry of Finance under the latter's guidance.

Article 39.- Responsibilities of the Ministry of Finance for state management of insurance business

The Ministry of Finance is responsible for:

1. Providing guidance on the implementation of legal documents on insurance business; formulating policies and regimes relating to insurance business, strategies, plannings, plans and policies on the development of Vietnam's insurance market;

2. Granting and withdrawing establishment and operation licenses of insurance enterprises, insurance brokerage enterprises and establishment licenses of representative offices of foreign insurance enterprises and foreign insurance brokerage enterprises in Vietnam;

3. Issuing, approving and providing guidance on the implementation of insurance rules, terms, premium tariffs and commissions;

4. Taking necessary measures to ensure that insurance enterprises meet the financial requirements and fulfill their commitments to insurance buyers;

5. Organizing information work and giving forecasts for the insurance market;

6. Undertaking international cooperation in insurance business;

7. Approving overseas activities of insurance enterprises and insurance brokerage enterprises;

8. Administering the operation of Vietnam-based representative offices of foreign insurance enterprises and foreign insurance brokerage enterprises;

9. Organizing the training of and building up of managerial and technical staffs for the insurance industry;

10. Inspecting and supervising insurance business; dealing with complaints, denunciations and handling violations of the insurance business law.

11. Organizing education and dissemination of the insurance business law;

12. Setting up the organizational structure and training staffs in charge of state management of insurance business.

Article 40.- Responsibilities of ministries, ministerial-level agencies and government-attached agencies for the enforcement of the insurance business law

Ministries, ministerial-level agencies and government-attached agencies, within the scope of their respective tasks and powers, are responsible for:

1. Collaborating with the Ministry of Finance in making policies and regulations relating to insurance business;

2. Collaborating with the Ministry of Finance in examining and supervising the observance of the insurance business law, and handling violations of the insurance business law;

3. Performing other tasks and duties within the scope of their competence in accordance with law.

Article 41.- Responsibilities of People's Committees of provinces and centrally run cities for the enforcement of the insurance business law

People's Committees of provinces and centrally run cities, within the scope of their tasks and powers, are responsible for:

1. Dealing with procedures relating to the establishment and operations of insurance enterprises, insurance brokerage enterprises, Vietnam-based representative offices of foreign insurance enterprises and foreign insurance brokerage enterprises in their respective localities after they are licensed by the Ministry of Finance.

2. Collaborating with the Ministry of Finance in handling violations of the insurance business law in their respective localities;

3. Performing other tasks and duties within the scope of their competence in accordance with law.

Article 42.- Inspection of insurance business

The inspection of insurance business shall be conducted in accordance with Article 122 of the Law on Insurance Business and other provisions of law on inspection of enterprises.

Article 43.- Commendation

Organizations and individuals that make achievements in insurance business and contribute to the socio-economic development, secure safety of the insurance market, properly comply with laws, and discover violations of the insurance business law shall be rewarded in accordance with law.

Article 44.- Handling of violations

Organizations and individuals that commit acts of violation of the insurance business law shall, depending on the nature and severity of their violations, be handled by the Ministry of Finance under the Government's regulations on handling administrative violations in the domain of insurance business.

Article 45.- Effect of the Decree

1. This Decree takes effect after 15 days after its publication in "CONG BAO."

2. The Government's Decree No. 42/2001/ND-CP of August 1, 2001, detailing the implementation of a number of articles of the Law on Business Insurance, ceases to be effective on the effective date of this Decree.

Article 46.- Organization of implementation

1. The Minister of Finance shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of People's Committees of provinces and centrally run cities shall implement this Decree.