Thông tư 155/2007/TT-BTC

CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE NO. 45/2007/ND-CP DATED MARCH 27, 2007, DETAILING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAWON INSURANCE BUSINESS

Pursuant to Law No. 24/2000/QH10 dated December 9, 2000, on insurance business;
Pursuant to the Governments Decree No. 45/2007/ND-CP dated March 27, 2007, detailing the implementation of a number of articles of the Law on Insurance Business;
Pursuant to the Governments Decree No. 77/2003/ND-CP dated July l, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
The Ministry of Finance provides specific guidance as follows:

I. GENERAL PROVISIONS

1. This Circular guides the implementation of the Government’s Decree No. 45/2007/ND-CP dated March 27, 2007, detailing the implementation of a number of the Law on Insurance Business regarding insurance business, re-insurance, insurance brokerage and insurance agents' activities carried out by insurance enterprises, insurance brokerage enterprises and insurance agents; the establishment and operation of Vietnam-based representative offices of foreign insurance enterprises and insurance brokerage enterprises.

2. Insurance enterprises, insurance brokerage enterprises, insurance agents and concerned organizations and individuals shall abide by the provisions of this Circular and relevant law; ensure cooperation, fair competition and anti-monopoly in insurance business activities.

3. The Vietnam Insurers Association shall enhance its self-management role and boost cooperation and fair competition among insurance enterprises and insurance brokerage enterprises for the sake of lawful rights and interests of organizations and individuals participating in insurance.

4. The Ministry of Finance shall create favorable conditions for insurance enterprises and brokerage enterprises to conduct business activities on an equal footing; protect lawful rights and interests of organizations and individuals participating in insurance and take measures to strictly handle violations of the law on insurance business.

II. ESTABLISHMENT AND OPERATION LICENSES

1. Licensing procedures.

1.1. The Ministry of Finance shall grant establishment and operation licenses (referred to as licenses for short) to insurance enterprises and insurance brokerage enterprises which satisfy the conditions specified in Article 6 and file dossiers of application for licenses as prescribed in Article 7 of the Government's Decree No. 45/2007/ND-CP dated March 27, 2007, detailing the implementation of a number of articles of the Law on Insurance Business (referred to as Decree No. 45/2007/ND-CP) Applications for licenses shall be made according to the form prescribed in Appendix l to this Circular (not printed herein).

1.2. Within 60 days after receiving a valid and complete dossier as prescribed, the Ministry of Finance shall grant a license or issue a written reply on its refusal to grant a license to an insurance enterprise or insurance brokerage enterprise. Licenses shall be made according to the form prescribed in Appendix 2 to this Circular (not printed herein)

2. Contents of appraisal of dossiers of application for licenses

2.1. Appraisal of the legal status

2.1.1. For investors being legal persons

a/ Notarized copies of the establishment decision, establishment and operation license and business registration certificate of the organization. For dossiers of application for licenses to establish foreign-invested enterprises, notarized copies of the establishment decision, establishment and operation license and business registration certificate of the insurance brokerage enterprise in the foreign country in which it is headquartered are required (the copy of the business registration certificate must be authenticated by the agency with which the organization has made registration within three months before the date of submission of the dossier application for a license);

b/ Organization and operation charters of organizations that contribute capital to establishing an insurance enterprise or insurance brokerage enterprise.

c/ The Investors’ paper of authorization to the representative (if any). For dossiers of application for licenses to establish enterprises with 100% foreign capital, the paper of authorization to the person expected to be appointed as general director (director) in Vietnam is required. The authorized person shall submit notarized copies of his/her personal certification papers as prescribed in Article 18 of the Government’s Decree No. 88/2006/ND-CP dated August 29, 2006, on business registration;

d/ The document of a competent authority permitting the enterprise to conduct insurance business or insurance brokerage business activities (if any). For dossiers of application for licenses to establish foreign-invested enterprises, 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 foreign-invested insurance enterprise or insurance brokerage enterprise in Vietnam or certifying this permission is required;

e/ The document of a competent authority of the country in which the enterprise is headquartered certifying that the foreign investor is permitted to conduct the forms of insurance business proposed to be carried out in Vietnam, for dossiers of application for the establishment of foreign-invested enterprises;

f/ The joint-venture contract with principal contents specified in the Investment Law and its guiding documents, for dossiers of application for licenses to establish joint-venture enterprises;

g/ Minutes of investors' meetings agreeing on the establishment of an insurance enterprise or insurance brokerage enterprise, for dossiers of application for licenses to establish joint-venture enterprises or joint-stock enterprises;

h/ A document signed by investors being founding shareholders (members) authorizing a representative to:

- Finalize and submit the dossier of application for a license; sign the application for a license to establish an insurance enterprise or insurance brokerage enterprise;

- Sign documents to complete the dossier of application for an establishment and operation license of an insurance enterprise or enterprise brokerage enterprise until a license is granted by the Ministry of Finance;

- Sign documents requesting approval of the titles of chairman of the board of management, chairman of the members' council, company president (collectively referred to as president), and general director (director) of the insurance enterprise or insurance brokerage enterprise before it officially commences its operation;

- Open a frozen account at a commercial bank lawfully set up and operating in Vietnam and request investors to deposit money into this account according to the registered list and collect the bank's certifications of deposit amounts paid by investors;

- Convene and chair the first shareholders' or members' general meeting.

i/ The draft charter of the enterprise in conformity with the 2005 enterprise Law, the Law on Insurance Business and their guiding documents. The draft charter must be signed by at-law representatives of all founding shareholders, founding members or their authorized representatives.

2.1.2. For individual investors:

a/ Notarized copies of their lawful personal certification papers as prescribed in Article 18 of the Government’s Decree No. 88/2006/ND-CP dated August 29, 2006, on business registration;

b/ Judicial records, made according to the form prescribed in Circular No. 07/1999/TTLT-BTP-BCA of February 8, 1999, dated the Ministry of Justice and the Ministry of Public Security providing for the grant of judicial records to investors being founding shareholders (or members).

2.2. Appraisal of financial capacity

2.2.l. A list of organizations and individuals that contribute capital to establishing an insurance enterprise or insurance brokerage enterprise, specifying organizations and individuals being founding shareholders (members); levels of contributed capital; number and types of shares (for dossiers of application for licenses to establish joint-stock enterprises); modes of capital contribution; and corresponding time limit for capital contribution;

2.2.2. Founding shareholders shall jointly hold at least 50% of the insurance enterprise or insurance brokerage enterprise for at least three years (for dossiers of application for licenses to establish joint-stock enterprises);

2.2.3. The document of a competent authority of the country in which the enterprise is headquartered certifying that the foreign investor has a sound financial status and fully meets management requirements in its country by the end of the financial year preceding the year of application for a license;

2.2.4. Structure of capital contributed to establishing an insurance enterprise or insurance brokerage enterprise in accordance with the Government’s Decree No. 46/2007/ND-CP dated March 27, 2007, providing for the financial regimes applicable to insurance enterprises and insurance brokerage enterprises (referred to as Decree No. 46/2007/ND-CP for short) and its guiding document.

2.2.5. Proofs evidencing investors' capacity to remit adequate capital as registered for the establishment of an insurance enterprise or insurance brokerage enterprise:

a/ Financial statements of three consecutive years preceding the year of application for a license to establish an insurance enterprise or insurance brokerage enterprise certified by an independent audit organization, for organizations being founding shareholders (members) or contributing 10% or more of charter capital; the financial statement for three consecutive years preceding the year of application for a license to establish an insurance enterprise or insurance brokerage enterprise, for legal-person investors other than founding shareholders (members) or contributing less than 10% of charter capital;

b/ Capital contributed to establishing an insurance enterprise or insurance brokerage enterprise must come from lawful sources; it is not permitted borrowed capital or entrusted investment capital in any forms as capital contributed to establishing an insurance enterprise or insurance brokerage enterprise;

c/ The bank's certification of the charter capital amount already remitted into the frozen account by each organization and individual according to the registered list in the dossier of application for a license.

2.3. Appraisal of the feasibility of the business plan for the first five years

2.3.1. General assessment of the insurance enterprise or insurance brokerage enterprise’s business plan in light of general market circumstances, including potential challenges and prospects;

2.3.2. Assessment of the to be-established insurance enterprise or insurance brokerage enterprise’s competitiveness, proving its advantages when participating in the market;

2.3.3. Analysis of insurance operations, clients and networks to be established;

2.3.4. The insurance enterprise or insurance brokerage enterprise's strategy on the development and expansion of its operational network;

2.3.5. The accounting balance sheet and report on business results, turnover and indemnity of each insurance operation, plan on financial investment from own capital and operational reserves. Projected figures must based on grounded assumptions;

2.3.6. Draft processes of underwriting, survey, compensation, internal control, financial management and investment, and management of re-insurance programs;

2.3.7. Methods of deduction for setting up operational reserves as guided in Decree No. 46/2007/ND-CP and its guiding documents;

2.3.8. The expected solvency margin as guided in Decree No. 46/2007/ND-CP and its guiding document; plan on supplementation of capital in case the solvency margin is insufficient as prescribed by law;

2.3.9. Information technology: The estimated financial investment in information technology; the capacity of information technology application, stating the expected time of technology application; types of to be-applied technologies; to be-appointed employees and their capabilities for information technology application;

2.3.10. Conditions for performance of insurance operations, for operations subject to conditional performance;

2.3.11. Model organization, operational functions, structure and number of employees of each section; and the enterprise's plan on initial training and regular training.

2.4. Appraisal of the administration capacity of managers and executives of the insurance enterprise or insurance brokerage enterprise

2.4.l. The list of managers and executives of the insurance enterprise or insurance brokerage enterprise, their curricula vitae, judicial records and notarized copies of their diplomas evidencing their professional capacity and qualifications in conformity with Clause 1, Section IV, of this Circular.

2.4.2. Written commitments of individuals who will work as managers and executives if the insurance enterprise or insurance brokerage enterprise is licensed.

2.5. Appraisal of rules and terms of insurance operations proposed to be proposed to be performed.

Rules, terms and premium tariffs must be elaborated in accordance with Article 20 of Decree No. 45/2007/ND-CP.

In case the dossier of application for a license to establish an insurance enterprise or insurance brokerage enterprise also applies for permission to open branches besides the head-office, the appraisal of conditions for opening branches shall be conducted under Article 11 of Decree No. 45/2007/ND-CP and the guidance in this Circular.

3. Procedures to be carried out before the insurance enterprise or insurance brokerage enterprise officially commences its operation 3.l. Within 12 months after being licensed, the insurance enterprise or insurance brokerage enterprise shall complete the following procedures in order to officially conduct insurance business activities:

3.1.1. To remit into the state budget licensing fees as prescribed by law;

3.1.2. To fully pay a deposit at a commercial bank lawfully set up and operating in Vietnam as prescribed in Article 6 of Decree No. 46/2007/ND-CP.

3.l.3. To convene a meeting to elect the Board of Management, president and general director (director) as prescribed in its charter in accordance with law; and to complete procedures of application for approval of the president and general director (director);

3.l.4. To have a seal carved, register for a tax identification number and open a transaction account at a bank as prescribed by law;

3.l.5. To register with the Ministry of Finance the method of deduction for setting up operational reserves as prescribed by law. Life insurance enterprises shall send relevant dossiers to the Ministry of Finance for the latter to approve their insurance products to be provided and their actuaries. These provisions do not apply to insurance brokerage enterprises;

3.l.6. To announce its operation in accordance with Clause 1, Article 9, of Decree No. 45/2007/ND-CP.

3.2. The insurance enterprise or insurance brokerage enterprise may only use the capital amount already remitted into the frozen account as its charter capital after being officially licensed by the Ministry of Finance.

III. MODIFICATION AND SUPPLEMENTATION OF LICENSES

An insurance enterprise or insurance brokerage enterprise must obtain the Finance Ministry’s written approval before changing contents specified in Article 69 of the Law on Insurance Business. The procedures for approval for changes of contents stipulated in Article 69 of the Law on Insurance Business are specified as follows:

1. Change of an enterprise's name

An insurance enterprise or insurance brokerage enterprise that wishes to change its name shall send to the Ministry of finance the following documents:

1.1. A written request for approval for renaming of the enterprise, made according to Appendix 3 to this Circular (not printed herein);

1.2. The written approval of a competent authority, as prescribed in its charter for renaming of the enterprise.

2. Increase or decrease of an insurance enterprise or insurance brokerage enterprise's charter capital level.

An insurance enterprise or insurance brokerage enterprise that wishes to change its charter capital level shall send to the Ministry of Finance the following documents;

2.1. A Written request for approval for change of the charter capital level, made according to the form prescribed in Appendix 3 to this Circular (not printed herein);

2.2. The written approval of a competent authority, as prescribed in the enterprise’s charter for change of the charter capital level;

2.3. The plan on the increase of the insurance enterprise or insurance brokerage enterprise’s charter capital, clearly determining:

2.3.1. The need for capital increase and use of capital;

2.3.2. Business efficiency on the basis of the new charter capital: the estimated after-tax profit-to-own capital ratio after the increase of capital; the dividend level in the year right before the increase of capital; profit-to-capital and profit-to-total asset ratios; and solvency of the insurance enterprise. These figures must be estimated on the basis of grounded assumptions.

2.3.3. The enterprise’s administration, management and supervision capacity corresponding to its increased capital amount and expanded scope of operation;

2.3.4. The feasibility of the plan on capital increase: the total charter capital to be increased and modes of capital mobilization.

All cases of increasing charter capital by offering of securities to the public must comply with the law on securities and securities market. The State Securities Commission shall grant licenses for offering securities to the public on the basis of the Ministry of Finance’s approval.

2.4. The plan on the decrease of an insurance enterprise or insurance brokerage enterprise’s charter capital must prove the enterprise’s capacity to pay all its debts and other asset liabilities after its charter capital level is decreased. One-member limited liability companies may not decrease their charter capital.

3. Opening or termination of operation of branches or representative offices.

3.1. An insurance enterprise or insurance brokerage enterprise that wishes to open branches or representative offices must meet conditions specified in Article 11 dated Decree No. 46/2007/ND-CP and the following specific conditions:

3.1.1. Satisfying conditions on actual charter capital prescribed in Decree No. 46/2007/ND-CP and its guiding documents;

3.1.2. Having paid fines, if any, not exceeding VND 15 million for administrative violation of regulations on insurance business over the three last years up to the time of submission of the application for approval for opening of a branch or representative office.

3.2. A dossier of application for approval for opening of a branch or representative office of an insurance enterprise or insurance brokerage enterprise complies with Clause 2, Article 11, dated Decree No. 45/2007/ND-CP and the following specific guidance: 3.2.1 An application for approval for opening of a branch or representative office, made according to the form prescribed in Appendix 3 to this Circular (not printed herein).

3.2.2. The written approval of a competent authority as prescribed in the enterprise's charter for the opening of branches or representative offices;

3.2.3. The judicial record and diplomas evidencing the qualifications of the person to be appointed as head of the branch or representative office;

3.2.4. The regulation on organization and operation of the branch or representative office, covering the following principal contents:

a/ Specific regulations on the function and tasks assigned by the enterprise to the branch, including the function of authorized representation and responsibilities of the branch's head before clients and law;

b/ Specific regulations on the contents of authorized representation functions of the enterprise's representative office;

c/ Specific regulations on the supply of information, reporting, finance and accounting of operations of the branch or representative office to ensure that the enterprise's head office is capable of controlling all operational risks of its branch or representative office;

d/ Other regulations according to supervision and management requirements of each insurance enterprise or insurance brokerage enterprise.

3.2.5. Proofs on the right to use the venue where the branch or representative office is located (rented or owned).

3.3. The branch and representative office of an insurance enterprise or insurance brokerage enterprise must officially commence its operation within six (6) months after its opening is approved by the Ministry of Finance.

3.4. A dossier of application for approval for termination of the operation of a branch or representative office of an insurance enterprise or insurance brokerage enterprise consists of the following documents:

3.4.l. An application for approval for termination of the operation of a branch or representative office, made according to the form prescribed in Appendix 3 to this Circular (not printed herein);

3.4.2. The written approval of a competent authority, as prescribed in the enterprise's charter for termination of the operation of branches or representative offices;

3.4.3. The report on the operation of the branch or representative office over the last three years. If the branch or representative office has been operating for less than three years, a report on operation since opening is required;

3.4.4. Responsibilities and matters arising from the termination of the operation of the branch or representative office and plan to handle them.

3.5. A dossier of application for approval for opening of an overseas branch or representative office of an insurance enterprise or insurance brokerage enterprise complies with the law on offshore investment.

4. Relocation of head offices, branches or representative offices of insurance enterprises or insurance brokerage enterprises

An insurance enterprise or insurance brokerage enterprise that wishes to relocate its head office, branches or representative offices shall send to the Ministry of Finance the following documents:

4.1. An application for approval for relocation of the enterprise's head office, branch or representative office, made according to the form prescribed in Appendix 3 to this Circular (not printed herein);

4.2. The written approval of a competent authority, as prescribed in the enterprise's charter for relocation of head offices, branches or representative offices;

4.3. Proofs on the rights to use the venue where the enterprise's head office, branch or representative office is located (rented or owned).

5. Change of contents, scope or duration of operation

5. 1. An insurance enterprise or insurance brokerage enterprise that wishes to extend the contents, scope or duration of its operation must meet the conditions specified in Article 12 of Decree No. 45/2007/ND-CP and the following specific guidance.

5.1.1 The actual charter capital meets the conditions specified in Decree No. 46/2007/ND-CP and guiding documents in case of expansion of the domains and scope of operation of the insurance enterprise;

5.1.2. Having paid fines, if any, not exceeding VND 15 million for administrative violations in the insurance business domain over the past three consecutive years up to the time of submission of the dossier of application for approval for expansion of the domains, scope and duration of operation;

5.l.3. In case of expansion of the domains and scope of operation, the insurance enterprise must have at least three staff members expected to work newly set up section. The head of that section must satisfy the criteria for managers or executives specified at Point 1.6, Clause 1, Section IV of this Circular;

5.2. A dossier of application for approval for modification of the domains, scope and duration of operation of an insurance enterprise or insurance brokerage enterprise complies with Article 12 of Decree No. 45/2007/ND-CP and the following specific guidance:

5.2.l. A written application for approval for expansion (or downscale) of the contents, scope and duration of the enterprise's operation, made according to the form in Appendix 3 to this Circular (not printed herein).

5.2.2. A competent authority's written approval, as prescribed in the enterprise's charter for such expansion or downscale;

5.2.3. Diplomas or certificates evidencing the capacity and qualifications of the head of the section expected to be set up, in case of application for approval for expansion of the contents of operation.

6. Split, consolidation, merger, transformation, or transfer of contributed capital portions.

The split, consolidation, merger, transformation, or transfer of contributed capital portions, of insurance enterprises or insurance brokerage enterprises prescribed in Article 16 dated Decree No. 45/2007/ND-CP are specified as follows:

6.l. Split, consolidation, merger or transformation of enterprises

6.1.1. The split, consolidation, merger or transformation of insurance enterprises or insurance brokerage enterprises comply with the Enterprise Law and the 2004 Competition Law.

6.1.2. A dossier of application for approval for split, consolidation, merger or transformation of an insurance enterprise or insurance brokerage enterprise comprises;

a/ A written application for approval for split, consolidation, merger or transformation of the enterprise, made according to the form in Appendix 4 to this Circular (not printed herein);

b/ A competent authority's written approval, as prescribed in the enterprise's charter for such split, consolidation, merger or transformation;

c/ A report on the plan to divide and process valid contracts with clients, debts, obligations towards the State and commitments with laborers upon split, consolidation, merger or transformation of the enterprise;

d/ A list of shareholders and members, the charter capital and its structure of the organization formed after the split, consolidation, merger or transformation;

e/ A consolidation or merger contract, in case of consolidation or merger;

f/ Opinion of financial consultancy organization or audit organization lawfully setup and operating in Vietnam on the valuation and conversion rate of shares or capital portions, in case of consolidation or merger;

g/ Lawyers' opinions on the legality of the contract and dossier of the split, consolidation, merger, consolidation or merger;

h/ Audited financial statements of the three years preceding the year of application for approval for consolidation or merger, of the organization merged or consolidated with the insurance enterprise or insurance brokerage enterprise; if the duration from the final date of the annual term of the latest financial statement to the time of submission of the dossier of application exceeds ninety (90) days, that organization shall submit additional quarterly statements up to the latest quarter;

i/ Curricula vitae and lawful personal certification paper prescribed in Article 18 of the Government's Decree No. 88/2006/ND-CP dated August 29, 2006, on business registration, of new members (individuals), or copies of business registration certificates of new members (legal entities) that own 10% of the charter capital or more;

j/ Diplomas and certificates evidencing the capacity of the to-be-appointed manager or executive of the insurance enterprise or insurance brokerage enterprise after split, consolidation or merger.

6.l.3. Companies newly formed after split, consolidation, merger or transformation may conduct insurance business only when they meet the insurance business conditions specified in the Insurance Business Law and guiding documents.

6.2. Transactions resulting in a change of 10% or more of the actually contributed charter capital of an insurance enterprise or insurance brokerage enterprise are subject to prior approval of the Ministry of Finance.

6.2.1. Transactions resulting in a change of 10% or more of the actually contributed charter capital of an insurance enterprise or insurance brokerage enterprise include:

a/ Transaction making an individual or organization own 10% or more of the actually contributed charter capital of the insurance enterprise or insurance brokerage enterprise; or,

b/ Transaction making an individual or organization no longer hold 10% or more of the actually contributed charter capital of the insurance enterprise or insurance brokerage enterprise; or,

c/ Transfer of the right to own 10% or more of the actually contributed charter capital of the insurance enterprise or insurance brokerage enterprise.

6.2.2. A dossier of application for approval for a transaction resulting in a change of 10% or more of the actually contributed charter capital of an insurance enterprise or insurance brokerage enterprise comprises:

a/ A written application for approval for transfer of the contributed capital portion, made according to the form in Appendix 5 to this Circular (not printed herein);

b/ A competent authority's written approval, as prescribed in the enterprise's charter for transactions resulting in a change of 10% or more of the actually contributed charter capital of the enterprise;

c/ Proofs of the Financial capacity of the transferee:

- For organizations: audited financial statements of the three years preceding the year of application for approval for transfer receipt. If the duration from the final date of the annual term of the latest financial statement to the time of submission of the dossier of application exceeds ninety (90) days, that organization must submit additional quarterly statements up to the latest quarter;

- For individuals: the bank's certification of the deposit balance expected to be used for capital contribution;

d/ In-principle transfer contract (if any);

e/ Curricula vita and lawful personal certification papers as prescribed in Article 18 of the Government's Decree No. 88/2006/ND-CP dated August 29, 2006, on business registration, of new capital contributors (for individuals), or copies of business registration certificates of new capital contributors (for legal entities);

f/ A list of capital-contributing members (shareholders) and the charter capital structure after the transfer.

7. Replacement of presidents or general directors (directors)

7.1. Replacement of presidents or general directors (directors) is subject to approval of the Ministry of Finance.

7.2. A dossier of application for approval for replacement of the president or general director (director) comprises:

7.2. l. A written application for approval for replacement of the president or general director (director), made according to the form in Appendix 3 to this Circular (not printed herein);

7.2.2. A competent authority's written approval, as prescribed in the enterprise's charter for such replacement;

7.2.3. Judicial records; lawful personal certification papers prescribed in Article 18 of the Government’s Decree No. 88/2006/ND-CP dated August 29, 2006, on business registration; diplomas and certificates evidencing the professional capacity and qualifications of the person in replacement of the president or general director (director);

7.2.4. A written commitment of the to-be-appointed president or general director (director) of the enterprise once the Finance Ministry’s approval is obtained.

8. Time limit for settling license modification supplementation applications

Within 30 days from the date the Ministry of Finance receives a complete dossier of application for approval for license modification or supplementation from an insurance enterprise or insurance brokerage enterprise prescribed for at Points 1 thru 7 above, the Ministry of Finance shall give a written reply to approve or disapprove the enterprise’s application. In case of disapproval, it shall give a written explanation. In case of approval, it shall grant a modified license to the enterprise, made according to the form in Appendix 6 to this Circular (not printed herein) or issue a written approval.

IV. ORGANIZATION AND MANAGEMENT OF INSURANCE ENTERPRISES AND INSURANCE BROKERAGE ENTERPRISES

1. Criteria for managers and executives of insurance enterprises and insurance brokerage enterprises

1.1. General criteria

l.1.1. Not being banned from managing enterprises under Clause 2, Article 13 of the enterprise Law;

1.l.2. Being other than those who had been or are being examined for penal liability, had been sentenced to imprisonment or had their professional practice right deprived by the court in accordance with law;

l.1.3. Having never been representatives at law of bankrupt enterprises, except for bankruptcy due to force majeure causes; or managers or executives of insurance enterprises or insurance brokerage enterprises having operation licenses revoked due to

their violations in insurance business activities;

1.1.4 Having full civil act capacity.

1.2. Criteria for a president

1.2.1. Meeting the general criteria specified at Point 1.1 above;

1.2.2. Possessing a university or postgraduate diploma; having directly worked in the domain of insurance or banking for at least five years or having at least three years' managerial or executive experience at an enterprise with a charter capital equivalent to that of the insurance enterprise or insurance brokerage enterprise which he/she is expected to be in charge of.

1.3. Criteria for a member of the board of management or members' council

1.3.1. Meeting the general criteria specified at Point 1.1 above;

1.3.2. Possessing a university or postgraduate diploma; having at least two years' managerial and executive experience or having directly worked in the domain of insurance, finance or banking for at least three years.

1.4. Criteria for a general director (director) o representative at law

1.4.1. Meeting the general criteria specified at Point 1.1 above;

1.4.2. Possessing a university or postgraduate diploma; having directly worked in the domain of insurance, finance or banking for at least five years and having held for at least three years the position of a professional section or higher position at the headquarters, of an insurance enterprise or insurance brokerage enterprise;

1.4.3. Residing in Vietnam during his/her term of office.

1.5. Criteria for a deputy general director (deputy director), branch director, head of representative office, chief accountant or head of the Control Board:

1.5.1. Meeting the general criteria specified at Point 1.1 above;

1.5.2. Possessing a university or postgraduate diploma; having knowledge in the professional domain he/she will be in charge of, or having directly worked for at least three years in the domain of insurance, finance or banking and the professional domain he/she will be in charge of;

1.5.3. Residing in Vietnam during his/her term of office.

1.6. Criteria for the head of the section for insurance operations exploitation, insurance compensation, reinsurance or investment:

1.6.1. Possessing a university or postgraduate diploma;

1.6.2. Having at least three years' experience of working in the domain he/she is expected to be in charge of; possessing a diploma or certificate of training in the domain he/she is expected to be in charge of, which is granted by an accredited domestic or international insurance training institution.

1.7. Principles for appointing positions in insurance enterprises and insurance brokerage enterprises:

1.7.l. Members of the board of management or the members' council of an insurance enterprise or insurance brokerage enterprise may not concurrently be members of the board of management or members of the members' council of another insurance enterprise or insurance brokerage enterprise operating the same domain (reinsurance, non-life insurance, life insurance or insurance brokerage), except for dependent companies.

1.7.2. The general director (director) or deputy general directors (deputy directors) of an insurance enterprise or insurance brokerage enterprise may not concurrently work for another insurance enterprise or insurance brokerage enterprise operating in the same domain; the general director (director) of an insurance enterprise or insurance brokerage enterprise may not be a member of the Board of management or member of the Members' Council of another insurance enterprise or insurance brokerage enterprise operating in the same domain, except for dependent companies.

2. Internal supervision and control

Insurance enterprises and insurance brokerage enterprises shall conduct internal supervision and control in accordance with Article 15 of Decree No. 45/2007/ND-CP and the following guidance:

2.1. The internal supervision and control section must be suitable to the enterprise's operation scale, scope and characteristics; and is subject to direct management by the general director (director) of the insurance enterprise or insurance brokerage enterprise.

2.2. The internal supervision and control section shall inspect and supervise the observance of legal provisions, professional regulations and processes and internal regulations of the insurance enterprise or insurance brokerage enterprise; assist the general director (director) in conducting self-inspection in order to synthesize, review and assess the effectiveness and efficiency of the internal supervision and control system, aiming to detect, prevent, and propose in time the handling of, problems and violations in all operations and improve the internal supervision and control system.

2.3. The internal control process must ensure regular and continuous identification, measuring and assessment of all risks threatening to adversely impact the enterprise's operation efficiency and objectives in order to detect, prevent and take in time appropriate risk management measures.

2.4. Requirements on the internal supervision and control process:

2.4.l. Clear and transparent decentralization and authorization of duties and powers to all individuals and sections of an insurance enterprise;

2.4.2. Cross-check between individuals and sections participating in the same operational process;

2.4.3. Determination of responsibilities of each individual or section in conducting a transaction;

2.4.4. An insurance enterprise or insurance brokerage enterprise must ensure that all of its staff members are aware of the importance of, and actively participate in, internal supervision and control activities;

2.4.5. Managers of professionals sections and units and concerned individuals shall regularly consider and assess the effectiveness and efficiency of the internal supervision and control system; all errors of this system must be reported promptly to supervisors; errors that threaten to cause damage or risks must be reported immediately to the general director (director), the board of management (members' council, company president) or the control board;

2.4.6. Heads of sections of an insurance enterprise shall report and assess the results of internal supervision and control at their sections or according to their assigned tasks; propose measure to handle problems (if any) and regularly or irregularly send them to their direct leaders upon request;

2.4.7. The internal supervision and control process should specify forms of disciplining upon the occurrence of wrongdoings.

2.5. The operational process of an insurance enterprise or insurance brokerage enterprise document stipulating the functions, duties, responsibilities and powers of each staff member in each section and the mechanism of coordination among staff members and sections within the enterprise.

3. Appoint actuaries

3.1. A life insurance enterprise must employ appointed actuaries to perform the following duties:

3.1.1. To formulate rules and terms and calculate insurance premiums of life insurance products;

3.1.2. To make operational reserves for life insurance policies in accordance with law;

3.1.3. To separate policy holder funds and distribute annual surpluses of these funds, ensuring fairness, rationality and lawfulness;

3.1.4. Monthly, to assess the enterprise's solvency and report it to the Ministry of Finance on the 10 ^th every month;

3.1.5. Quarterly and annually, to report in writing to the board of management, the members' council and the president of the life insurance enterprise on the enterprise’s actual financial status, and forecasts about the enterprise’s future financial status;

3.1.6. To promptly report in writing to the general (director), the board of management, the members’ council or president on irregular issues that may adversely affect the enterprise’s financial status and propose handling measures. In serious cases in which the enterprise's solvency may be affected, to directly report to the Ministry of Finance;

3.1.7. To assess reinsurance programs and reinsurance policies before submitting them to the board of directors, the board of management, the members’ council and the president for approval;

3.1.8. To perform other duties to ensure the enterprise’s financial safety.

3.2. Criteria for appointed actuaries

3.2.1. Appointed actuaries must meet the following criteria:

a/ Having been trained and having worked as actuaries for at least five years in the life insurance domain, and being fellows of one of internationally accredited associations of actuaries such as the United Kingdom Association of Actuaries, the Scotch Association;

b/ Having good moral qualities; having never violated rules of conduct applicable to actuaries; having never been examined for penal liability for crimes related to their professional operations;

c/ Being staff members of an insurance enterprise.

An insurance enterprise that cannot yet recruit actuaries may temporarily hire them; a contract on hiring actuaries must have a term of at least one (01) year.

3.3. Procedures for approving appointed actuaries

3.1.1. The board of management (members' council, company president) of a life insurance enterprise or the general director (director), in case the enterprise has no board of management(members' council, company president), shall appoint actuaries to perform the duties specified at Point 3.1 above. The appointment of actuaries is subject to written approval of the Ministry of Finance.

3.3.2. A dossier of application for approval of an actuary comprises:

a/ A written application to the Ministry of Finance for approval of an actuary, signed by the chairman of the board of management (members' council, company president) or the general director (director), in case the enterprise has no board of management (members' council, company president);

b/ Diplomas, certificates and curricula vitae evidencing the professional capacity, qualifications and experience of the to-be-appointed actuary;

c/ A notarized copy of the certificate of membership of an accredited association of actuaries.

3.4. Procedures for approving replacement of an appointed actuary:

3.4.1. In case of replacement of an actuary, an insurance enterprise shall submit to the Ministry of Finance a dossier of application for approval for such replacement, comprising:

a/ A written application to the Ministry of Finance for relief from duty of an actuary already approved by the Ministry of Finance for approval of a new actuary. The insurance enterprise's application must be signed by the chairman or the general director (director), in case the enterprise has no board of management (members' council, company president);

b/ Diplomas, certificates and curricula vitae evidencing the professional capacity, qualifications and experience of the nominated actuary;

c/ A notarized copy of the certificate of membership of an accredited association of actuaries.

3.4.2. Within 15 days after receiving a complete and valid dossier specified at above Points, the Ministry of Finance shall give a written reply on its approval or disapproval. In case of disapproval, it shall give a written explanation.

3.5. Termination of status of appointed actuaries:

3.5.l. An appointed actuary will naturally have his/her legal status terminated in the following cases:

a/ His/her membership of an accredited association of actuaries has terminated;

b/ The insurance enterprise makes a written request for replacement of the appointed actuary, clearly stating the reason, which is approved by the Ministry of Finance.

3.5.2. Within 15 days after receiving a complete and valid dossier specified at the above points, the Ministry of Finance shall give a written reply on its approval or disapproval. In case of disapproval, it must give a written explanation.

V. UNDERWRITING INSURANCE

1. Reporting on insurance products

1.1. For insurance products of non-life insurance operations, insurance enterprises may take the initiative in developing and implementing insurance rules, terms and premium tariffs while ensuring:

1.1.1. Compliance with the provisions of Clause 4, Article 20 dated Decree No. 45/2007/ND-CP;

1.1.2. Insurance premiums payable under a contract already entered into not lower than the reinsurance cession charge of that very contract.

1.2. Within the first 15 days of every month, insurance enterprises shall report to the Ministry of Finance on new products in the preceding month according to the form prescribed in Appendix 7 to this Circular (not printed herein).

2. Approval of insurance products

2.l. Before introducing life insurance products and health insurance and personal accident insurance products supplementary to life insurance, insurance enterprises shall submit to the Ministry of Finance documents of request for approval of these products, including:

2.l.1. Written request for the Ministry of Finance’s approval of products, containing the insurance enterprise's commitment to take responsibility for the contents and legality of the insurance rules and terms;

2.l.2. Insurance rules, term and premium tariffs of insurance products to be introduced;

2.l.3. Formulas, methods and explanation about technical bases on which insurance premiums and operational reserves of insurance products to be introduced are computed;

2.l.4. Relevant documents, including the form of insurance request, documents introducing products and services of the insurance enterprise, sale illustration documents, forms of application to be completed and signed by customers upon buying insurance. These documents constitute part of the insurance contract;

2.l.5. For life insurance products with shared profits, in the bases on which premiums of insurance products expected to be introduced are computed, insurance enterprises shall clearly state the principles, modes and rates for sharing profits which they commit to pay to customers.

2.2. Insurance rules, term and premium tariffs submitted by insurance enterprises to the Ministry of Finance for approval must ensure compliance with the provisions of Clause 4, Article 20 dated Decree No. 45/2007/ND-CP The Ministry of Finance encourages insurance enterprises to reach agreement on insurance rules and terms through the Vietnam Insurers Association.

2.3. Dossiers of request for approval of life insurance products must be signed by enterprises' representatives at law and certified by actuaries.

2.4. Contents of appraisal of insurance products before approval

2.4.1. Checking the validity of dossiers of request for approval of insurance products and the compliance of insurance rules and term with current provisions of law. For insurance product developed on the basis of model insurance rules and term, the Ministry of Finance shall only check the validity of dossiers of request for approval of insurance products.

2.4.2. Assessing the economic and technical feasibility of insurance products on the basis of the certification opinion of actuaries.

2.5. Within 30 days from the date of receipt of complete and valid dossiers, the Ministry of Finance shall issue a written approval or disapproval. In case of disapproval, it shall give a written explanation.

3. Provision on underwriting of non-life insurance

3.1. Insurance enterprises shall underwrite insurance according to the following provision:

3.1.1. Honesty, publicity and transparency, avoiding causing customer misunderstanding of products and services they provide;

3.1.2. Their employees and insurance agents have adequate professional qualifications, moral qualities and have been properly trained in communication with customers.

3.1.3. Before entering into insurance contracts, they shall gather necessary information on customers, take into consideration their own financial capacity and professional capability, the preservation of their financial resources, solvency and risk management systems. They shall secure that there will be no discriminatory treatment in terms of insurance conditions and premiums between the insured subject matters involving the same risk level.

3.1.4. The buying and selling of insurance between insurance enterprises and investors that hold 20% or more of the charter capital of these enterprises must be conducted through bidding under the provisions of law on bidding or coinsurance with other insurance enterprises. This provision is not applicable to health insurance and personal accident insurance and all types of compulsory insurance.

3.2. Prohibited acts

3.2.l. Organizations and individuals are prohibited from illegally intervening into the right of insurance buyers to choose insurance enterprises and insurance brokerage enterprises;

3.2.2. Managing agencies and investors may not abuse their influence in any form to ask, prevent or compel their subordinate units or related persons to participate in insurance at a certain insurance enterprise;

3.2.3. Insurance enterprises are prohibited from taking advantage of the prestige, influence and direction of their managing agencies and capital contributors to provide insurance services, affecting the legitimate rights and interests of insurance buyers.

4. Provisions on under writing life insurance

4.l. Documents introducing products and services of insurance enterprises

4.1.1. Documents introducing products and services of insurance enterprises must be clear, easy- to-understand and contain no misleading information;

4.1.2. In sale illustrations, insurance enterprises shall clearly distinguish secured benefits from unsecured ones; and notify customers that aggregate insurance benefits they may receive under unsecured insurance contracts may vary;

4. l.3. At least once a year, to reconsider assumptions used in sale illustrations. If these assumptions are no longer suitable to reality, insurance enterprises shall revise sale illustrations as appropriate;

4.1.4. Insurance enterprises shall ensure that documents introducing their products and services do not contain information on insurance benefits contrary to the insurance rules and term already approved by the Ministry of Finance.

4.2. Sale illustration documents

4.2.l. Insurance enterprises may supply customers with illustrations on their insurance products directly or through insurance agents and insurance brokerage enterprises licensed to operate in Vietnam;

4.2.2. Assumption used in calculations in sale illustration documents must be approved by actuaries of insurance enterprises before these documents are supplied to customers. These documents must be clear, complete and accurate to help customers make appropriate selection.

4.2.3. Insurance enterprises are responsible for the accuracy and updatedness of documents introducing their products and services, sale illustration documents and other sale documents throughout their use duration;

4.2.4. Insurance enterprises shall present in sale illustration documents conditions for claiming the reimbursed value and benefits, and specific sums of money which customers will receive upon receipt of the reimbursed value, clearly stating whether these

benefits are secured or not.

4.3. Supply of information relating to insurance contracts

Unless specified in insurance contracts, insurance enterprises shall, when issuing insurance policies, supply in writing the following information to customers:

4.3.l. Modes and periods of paying insurance premiums;

4.3.2. Names of individuals or units attached to the enterprise for contact when customers need service or have any inquires about matters related to their contracts;

4.3.3. Customer's responsibility to notify the enterprise of the change of address of the insurance buyer;

4.3.4. Addresses at which customers may contact for settlement of claims, inquiries and disputes related to the entry into, performance and termination of insurance contracts.

4.3.5. The entry into insurance contracts supplementary to principal insurance contracts does not constitute a compulsory condition maintaining the validity of principal contracts;

4.3.6. Annually, insurance enterprises shall notify insurance buyers of the status of their contracts.

4.4. Surrender value of life insurance contracts

4.4.1. A life insurance contract has value when it has become valid a insurance premiums have been paid for 24 full months or more, for insurance contracts with periodical insurance premium payments or for a shorter time as agreed upon in insurance contracts;

4.4.2. Insurance enterprises may deduct unpaid debts before paying the surrender value to insurance buyers.

4.5. Entry into insurance contracts

4.5.l. Enterprises shall analyze customers’ needs so as to advise them to buy appropriate insurance products with appropriate insurance premiums. Customer need analysis and advice shall be made in writing.

4.5.2. Insurance enterprises shall give clear explanations and specific information requests to insurance buyers. Insurance buyers shall fully supply information relating to subject matters of insurance to insurance enterprises.

4.5.3. When entering into insurance contracts, insurance enterprises shall fully supply information relating to insurance contracts and explain insurance conditions and term to insurance buyers. Information supplied by insurance enterprises upon entry insurance contracts constitutes an integral part of insurance contracts.

5. Publicization of lists of insurance products

Within 30 days from the end of every quarter, the Ministry of Finance shall publicize lists of insurance products currently provided by each insurance enterprise on the market. Lists of insurance products shall be publicized by the Ministry of Finance on the mass, media and sent to the Vietnam Insurers Association and insurance enterprises lawfully established and operating in Vietnam.

6. Insurance commissions

6.1. Insurance commission is amounts paid by insurance enterprises directly to insurance brokerage enterprise and insurance agents after these organizations and individuals obtain services for insurance enterprises. Insurance enterprises may take the initiative in spending insurance commissions on the following contents:

6.6.1. Expenses for initial under writing (inquiring after, persuading and introducing customers);

6.1.2. Expenses for collection of insurance premiums;

6.1.3. Expenses for monitoring contracts and persuading customers to maintain insurance contracts.

6.2. The maximum rates of insurance commissions which insurance enterprises are allowed to pay to insurance agents for each insurance contract comply with Appendix 8 (not printed herein) and Appendix 9 to this Circular. Insurance commissions for insurance contracts with lump-sum insurance premium payment are equal to the aggregate of the commissions for each insurable risk in these contracts.

6.3. The rate of insurance brokerage commission shall be determined on the basis of the agreement between insurance enterprises and insurance brokerage enterprises in accordance with Vietnamese law and international practice. Depending on the scope, extent and content of the provided insurance brokerage service, the payable insurance brokerage commission is equal to 15% at most of the actually collected amount of insurance premium.

6.4. Insurance enterprises shall base themselves on current regulations on insurance commissions and their specific conditions and characteristics to formulate a regulation on payment of insurance premiums for unified and public application in the enterprises.

7. Loss prevention and mitigation

Insurance enterprises may spend 2% at most of the collected amount of insurance premium in the financial year on loss prevention and mitigation measures under Clause 2, Article 25 of Decree No. 45/2007/ND-CP.

VI - REINSURANCE

l. Management of reinsurance programs

1.1. Approval of reinsurance programs

1.1.1. In order to ensure safety and efficiency of reinsurance business activities, the board of management (members' council or company president) shall approve reinsurance programs which are suitable to the enterprises' financial capacity and business scope and compliant with current legal provisions. They shall review, evaluate and adjust reinsurance programs annually or upon any changes in the market situation. For an insurance enterprise that has no board of management (members' council or company president), its board of directors shall approve insurance programs.

1.l.2. A reinsurance program covers the following principal contents:

a/ Identifying the risk acceptance ability of the insurance enterprise;

b/ Identifying the retention level suitable to the accepted insurance risk; limits on the retention level per unit of risk and the maximum level of protection from the reinsurance assuming enterprise;

c/ Identifying types and modes of reinsurance most appropriate to the management of accepted risks;

d/ Mode, criteria for and process of selecting reinsurance assuming enterprises, including the mode of assessing the risk level and financial safety of reinsurance assuming enterprises;

e/ A list of enterprises expected to assume reinsurance, with attention paid to the diversification and ranking of these enterprises;

f/ Modes of using deposits, if any;

g/ Managing cumulated risks with respect to specific domains, geographical areas and products;

h/ Way of controlling reinsurance programs, including the reporting and internal control systems.

1.2. Organization of implementation of reinsurance programs

1.2.1. On the basis of reinsurance program already approved by the board of management, members' council or company president, the general director (director) of the insurance enterprise shall issue internal regulations and guidelines on reinsurance business activities, specifically:

a/ The insurance under writing process, specifying types of insurance products to be provided; insurance rules and terms and aggregate liability for each insurance product;

b/ Identifying the limit of liability to be automatically insured under fixed reinsurance contracts for each type of insurance;

c/ Formulating standards for temporary reinsurance contracts;

d/ Comparing the rules and term of original insurance contracts with the terms of reinsurance contracts to ensure that every risk is insured.

1.2.2. Insurance enterprises shall regularly update the list of reinsurance assuming enterprises enclosed with information on the level of risk, possibility and extent of readiness to pay indemnities corresponding to the reinsured liability; and request deposits corresponding to the level of risk and credit rating of each reinsurance assuming enterprise.

2. Retention level

2.l. Insurance enterprises shall compute the retention level for each type of insurance and each kind of risk; the retention level per risk and insured event;

2.2. When computing the retention level, insurance enterprises shall take into account the following factors:

2.2.l. Legal provisions on solvency;

2.2.2. Underwriting capacity;

2.2.3. Financial capacity;

2.2.4. The enterprise's readiness to accept risks;

2.2.5. Arrangement for protection against major and catastrophe risks;

2.2.6. Balancing of business results;

2.2.7. Constituents of the list of insurance contracts;

2.2.8. Developments of the domestic international reinsurance markets.

2.3. Insurance enterprises may only retain the maximum level of liability per single risk of loss not exceeding 10% of their owner capital. The part of liability in excess of 10% shall be ceded by the means of reinsurance.

2.4. Insurance enterprises may not assume reinsurance for the very risk they have ceded by means of reinsurance.

3. Cession by means of reinsurance

3.l. Insurance enterprises 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.

3.2. For types of finite insurance, before entering into reinsurance contracts, insurance enterprises shall send to the Ministry of Finance written notices, signed by their representatives at law, of the principal contents of reinsurance contracts, purposes of signing the contracts, commitment to observe legal provisions on insurance business, and the accounting regime applied by the insurance enterprises. For finite insurance contracts entered into before the effective date of this Circular, insurance enterprises shall send to the Ministry of Finance reports on the above contents.

3.3. Cession by means of reinsurance to overseas insurance enterprises must not be conducted under conditions more favorable than those under which cession by means of reinsurance to domestic enterprises is conducted.

4. Conditions on foreign reinsurance assuming enterprises

4.1. Foreign reinsurance assuming enterprises are lawfully operating and meet all solvency requirements under the laws of the countries where they are headquartered;

4.2. Leading reinsurance assuming enterprises must be rated at least ''BBB'' by Standard & Poor's, "B++" by A.M.Best, ''Baa'' by Moody's or get equivalent ratings in the financial year right before the time of entry into reinsurance contracts.

In case of reinsurance to overseas parent companies or within the same group without credit rating according to the above provision, insurance enterprises shall report such in writing to the Ministry of Finance.

VII - INSURANCE AGENTS

1. Responsibilities of insurance agent training institutions for insurance agent training

1.1. Insurance agent training institutions that wish to conduct insurance agent training shall send a written request to the Ministry of Finance for approval of insurance agent training programs as prescribed in Clause 2, Article 31 of Decree No. 45/2007/ND-CP together with the training and training quality evaluation processes, the process of examination for awarding insurance agent training certificates and the process of award and management of insurance agent training certificates.

1.2. The duration of initial training for insurance agents is 40 hours at least. The duration of regular training is at least 16 hours/quarter, for non-life insurance agents, and at least 24 hours/quarter, for life insurance agents.

1.3. Award of insurance agent training certificates

1.3.1. Only insurance agent training institutions which are approved by the Ministry of Finance may award insurance agent training certificates. To be awarded insurance a certificate, the trainee must complete the insurance agency training program and pass an exam for awarding insurance agent training certificates. .

1.3.2. Insurance agent training certificates are awarded according to the form prescribed in Appendix lo to this Circular (not printed herein) .

1.4. Annually, on January 30 of the subsequent year at the latest, insurance agent training institutions shall report to the Ministry of Finance on the number of training courses held, the number of insurance agents trained, and the number of certificates awarded in the year according to the form prescribed in Appendix 11 to this Circular (not printed herein). Quaterly, on the 15^th of the first month of the subsequent quarter at the latest, insurance enterprises shall report to the Ministry of Finance on and notify the Vietnam Insurers Association of a list of operating insurance agents and a list of insurance agents with agency contracts already terminated by the insurance enterprise for their violations of regulations on practice of insurance agency or illegal acts according to the form prescribed in Appendix 12 to this Circular (not printed herein).

2. Rights and obligations of insurance enterprises and insurance agents

2.l. Rights and obligations of insurance enterprises in the management of the operation of insurance agents, and rights and obligations of insurance agents are prescribed in Article 29 and Article 30 of Decree No. 45/2007/ND-CP.

2.2. Insurance enterprises may not enter into contracts with insurance agents with agency contracts already terminated by other insurance enterprises for their serious violations of law and agency contracts within 3 years from the date of termination of agency contracts.

When terminating agency contracts for any of the above reasons, insurance enterprises shall notify the Vietnam Insurers Association thereof for further notification to other insurance enterprises.

2.3. In case of change of the contents of an insurance agent training program and the conditions already registered with the Ministry of Finance, at least 30 days before starting anew training program, insurance enterprises shall send to the Ministry of Finance a written report enclosed with documents explaining these changes.

3. Insurance agents are prohibited from committing the following acts:

3.1. Providing untrue information and advertisements on the contents and scope of operation of insurance enterprises, and insurance conditions and term that harm lawful rights and benefits of insurance buyers;

3.2. Preventing insurance buyers from providing information relating to insurance contracts or inciting insurance buyers not to declare details related to insurance contracts.

3.3. Fighting for customers in the forms of obstructing, inciting, giving bribes to or intimidating employees or customers of other insurance enterprises, insurance agents or insurance brokerage enterprises;

3.4. Conducting sales promotion for customers in such illegal form as promising reduction of insurance premiums, refund of insurance premiums or other benefits which insurance enterprises do not provide to customers.

3.5. Inciting insurance buyers to cancel valid insurance contracts in order to buy new ones.

4. Supervision of insurance agent training and employment

4.l. Insurance agent training institutions shall take responsibility before law for all insurance agent training activities.

4.2. Insurance enterprises shall take responsibility before law for all insurance agent recruitment, management, training and employment activities.

4.3. The Ministry of Finance may conduct regular or irregular or irregular inspection of insurance recruitment, training, management and implementation activities of insurance enterprises and insurance agent training institutions.

The above inspection must not affect the normal operation process of insurance enterprises insurance agent training institutions.

5. Business registration of insurance agency organizations

Insurance agency organizations that are enterprises shall make business registration in accordance with the Enterprise Law and its guiding document.

VIII - INSURANCE BROKERAGE

1. Insurance enterprises may authorize insurance brokerage enterprises to collect insurance pay insurance indemnities or insurance sums. Such authorization must be expressed in writing , specifying the time limit and scope of authorized activities.

2. In case an insurance brokerage enterprise is authorized by an insurance enterprises to collect insurance premiums, the premium payment responsibility of insurance buyers is fulfilled when insurance buyers have paid insurance premiums as agreed upon in insurance contracts to the insurance brokerage enterprise.

In case an insurance brokerage enterprise is authorized by an insurance enterprises to collect insurance premiums and insurance buyers have paid insurance premiums as agreed upon in insurance contracts, the insurance brokerage enterprise shall pay the collected insurance premiums to the insurance enterprise within the time limit agreed upon between them. In case of no agreement on this time limit, the insurance brokerage enterprise shall pay the collected insurance premiums to the insurance enterprise as soon as possible within 7 days from the date of receipt of insurance premiums.

3. In case an insurance brokerage enterprise is authorized by an insurance enterprise to pay insurance sums or insurance indemnities, the insurance enterprise is still held liable before the insured or beneficiaries for the insurance sums which the insurance enterprise is obliged to pay to the or beneficiaries.

4. In case an insurance brokerage enterprise is authorized by an insurance enterprise to pay insurance sums or insurance indemnities, the insurance brokerage enterprise shall pay insurance sums to the insured or beneficiaries immediately after receiving these sums from the insurance enterprise.

5. Insurance brokerage enterprises may not commit the following acts:

5.1. Obstructing insurance buyers in supplying information relating to insurance contracts or inciting insurance buyers not to declare details related to insurance contracts.

5.2. Conducting sales promotion for customers in the form of promising illegal benefits to induce them to enter into insurance contracts;

5.3. Inciting insurance buyers to cancel valid insurance contracts in order to buy new ones;

5.4. Advising customers to buy insurance at an insurance enterprise offering conditions and term less competitive than those offered by another one in order to earn higher brokerage commissions.

IX. REPRESENTATIVE OFFICES OF FOREIGN INSURANCE ENTERPRISES AND INSURANCE BROKERAGE ENTERPRISES IN VIETNAM

1. Dossiers of application for representative office establishment permits.

1.1. A foreign insurance enterprise or insurance brokerage enterprise that wishes to establish a representative office in Vietnam shall send to the Ministry of Finance a dossier set of application for a representative office establishment permit according to Article 110 of the Law on Insurance Business.

1.2. An application for a permit to establish a representative office in Vietnam must be signed by the president of the Board of management or a competent person of the foreign insurance enterprise or insurance brokerage enterprise, and made according to the form prescribed by the Ministry of Finance in Appendix 13 to this Circular (not printed herein).

2. Reporting on operation of representative offices.

2.1. Representative offices of Vietnam-based foreign insurance enterprises and insurance brokerage enterprises shall send biannual and annual reports on their operation to the Ministry of Finance and People's Committees of provinces or centrally run cities where they are located.

Biannual reports must be sent before July 30 every year while annual reports must be sent before March 1 of the subsequent year.

2.2. Contents of a report.

2.2.1. Organizational structure of the representative office, its personnel, number of Vietnamese staff and foreign staff working at the office;

2.2.2. Principal activities:

a/ Market access;

b/ Relations between the representative office and Vietnamese brokerage enterprises and economic organizations;

c/ Counseling and training work;

d/ Other activities.

2.2.3. Future operation orientations

2.3. When necessary, the Ministry of Finance may request representative offices to make extraordinary reports in addition to the above-mentioned reports, supply documents and explain matters related to their operation.

3. Changes in contents of permits

3.1. In case of change of the following contents of its permit, the representative office of a foreign insurance enterprise or insurance brokerage enterprise shall submit a written request to the Ministry of Finance for modification of the permit:

3.1.1. The name, nationality and address of the enterprise or the name of its representative office:

3.1.2, The contents of operation of the representative office.

Within 30 days after receiving a foreign insurance enterprise's or insurance brokerage enterprise's written request, the Ministry of Finance shall give a written reply, stating its approval or disapproval. In case of disapproval, the Ministry shall give the reason in writing.

3.2. In case of replacement of the chief representative, increase or reduction of Vietnamese of foreign staff at its representative office or re-location of the representative office, a foreign insurance enterprise or insurance brokerage enterprise shall immediately notify such in writing to the Ministry of Finance.

4. Extension of operation duration of representative offices.

4.1. At least 30 days before the expiration of its Vietnam-based representative office establishment permit, a foreign insurance enterprise or insurance brokerage enterprise that wishes to extent the operation duration of the representative office shall submit to the Ministry of Finance a dossier of request therefor, which comprises:

4.1.1. A written request for extension of the operation duration of the representative office, signed by the president or a competent person of the enterprise.

4.1.2. The enterprise's establishment and operation license;

4.1.3. Copies of the Vietnam-based representative office establishment permit and the previous decision on extension of the operation duration of the enterprise's representative office (if any);

4.1.4. A brief report on the representative office's operation over the last 3 years;

4.1.5. The enterprise's financial statements of the last 2 years;

4.1.6. The full name and resume of the chief representative in case of his/her replacement;

4.2. Within 30 days after receiving a complete and valid dossier of request for operation duration extension, the Ministry of Finance shall issue a written approval or disapproval. In case of disapproval, the Ministry shall give the reason in writing.

5. Termination of operation of representative offices.

5.1. A representative office shall terminate operation in one of the following cases:

5.1.1. At the request of the foreign insurance enterprise or insurance brokerage enterprise;

5.1.2. Upon termination of operation of the foreign insurance enterprise or insurance brokerage enterprise;

5.1.3. When it violates the law on insurance business;

5.1.4. When a competent state agency issues a decision on withdrawal or revocation of its permit in accordance with Vietnamese law.

5.2. In case of termination of operation of its representative office according to Points 5.1.1 and 5.1.2 above, the foreign insurance enterprise or insurance brokerage enterprise shall send a written notice to the Ministry of Finance not later than 30 days before the date of termination of the office and returns to the Ministry the original permit of the representative office and permits, licenses and decisions related to the operation process of the representative office.

Within 15 days the Ministry of Finance shall issue a written approval of termination of operation of the representative office and notify such to agencies to which copies of the representative office's permit has been sent.

5.3. In case of termination of operation according to Pints 5.1.3 and 5.1.4 above, the Ministry of Finance shall send to the foreign insurance enterprise or insurance brokerage enterprise a decision on withdrawal or revocation of the representative office establishment permit at least 30 days before the office must terminate its operation, and send copies of that decision to agencies to which copies of the representative office establishment permit has been sent.

X. PROCEDURES, DOSSIERS OF APPLICATION FOR TRANSFER OF INSURANCE CONTRACTS

1. Transfer of insurance contracts

1.1. In the course of operation, an insurance enterprise may transfer all insurance contracts on one or several insurance operations (bellow referred to as transfer for short) to other insurance enterprises which are licensed to operate in Vietnam under the provisions of Section 3, Chapter III of the Law on Insurance Business.

1.2. The transfer must not cause harms to the interests of insurance buyers after its completion.

2. Transfer procedures

2.1. With regard to transferring insurance enterprise (below referred to as transferor for short): It shall send to the Ministry of Finance a written request for transfer, stating the transfer reasons, enclosed with the following documents:

2.1.1. The transfer plan, which states:

a/ The name and address of the transferred insurance enterprise (below referred to as transferee);

b/ The type of insurance operation and number of transferred insurance contracts;

c/ The mode of transfer of funds, operational reserves and insurance complaints related to transferred contracts;

d/ The time scheduled for the transfer;

e/ The transferee's detailed for the transfer;

f/ The transfer contract between the transferor and the transferee, including the following principal contents;

- Subject matter of the transfer;

- Time scheduled for the transfer;

- Rights and obligations of parties to the transfer;

- Modes of settlement of disputes.

2.1.2. The transferee's commitment on ensuring insurance buyers' interests under transferred insurance contracts after the transfer takes effect.

2.2. Within 15 days after the written request for transfer of insurance contracts is approved by the Ministry of Finance, the transferor shall:

2.2.1. Publish and announcement on the transfer in 5 consecutive issues of two central newspapers with the following main contents:

a/ Names and addresses of the transferor and the transferee;

b/ Type of insurance operation and number of transferred insurance contracts;

c/ Time scheduled for the transfer;

d/ Address of the venue for settlement of insurance buyers' complaints and petitions related to the transfer.

2.2.2. Right after the Ministry of Finance approves the written request for transfer, the transferor shall send a written notice enclosed with a brief transfer plan to each insurance buyer. The notice sent to the insurance buyer must state the time limit during which the insurance buyer may cancel the insurance contract if disagreeing with the transfer plan and the date the transfer officially takes effect.

2.2.3. An insurance buyer may cancel the insurance contract within 15 days after receiving the transfer notice, based on the postage stamp. If the insurance buyer cancels the insurance contract, the transferor shall refund to him/her/it the insurance premium amount it has received corresponding to the remaining duration of the insurance contract after subtracting related reasonable costs, for non-life insurance; or the insurance premium amount the insurance buyer has paid after subtracting related reasonable costs, for life insurance.

2.3. After the Ministry of Finance approves the transfer request, the transferor may not sigh new insurance contracts related to the transferred insurance operations.

2.4. Within 60 days after the Ministry of Finance approves the transfer plan, the transferor shall transfer to the transferee;

2.4.1. All insurance contracts which are still valid and under the transfer plan already approved by the Finance Ministry;

2.4.2. Unsettled complaints related to transferred insurance operations;

2.4.3. All assets, funds and operational reserves related to transferred insurance contracts and unsettled complaints related to transferred insurance operations.

3. Approval of dossiers of request for transfer of insurance contracts.

3.1 Within 30 days after receiving a full dossier of request for transfer, the Ministry of Finance shall issue a written approval or disapproval or request for modification or supplementation, within 60 days after receiving the request, the transferor shall complete the dossier and send it to the Ministry. Past this time limit, the Ministry of Finance may refuse to approve the transfer request dossier. Incase of disapproval of the dossier, the Ministry of Finance shall give the reason in writing.

3.2. After approving the transfer request dossier; the Ministry of Finance shall grant to the transferor a modified permit, made according to the form in Appendix 6 to this Circular (not printed herein), which accords with insurance operations the transferor is still allowed to conduct.

4. Responsibilities of the transferee

4.1. The transferee shall coordinate with the transferor in working out a transfer plan, determining the value of assets related to the funds and operational reserves of transferred insurance contracts and reaching agreement on the effective date of the transfer plan.

4.2. From the date of transfer, the transferee shall perform transferred obligations under transferred contracts according to the terms concluded between the transferor and insurance buyers, including settlement of complaints which have been filed but not yet reported. The transferee may receive assets related to the funds and operational reserves of transferred insurance contracts and use those assets to fulfill its obligations under transferred insurance contracts.

XI. ORGANIZATION OF IMPLEMENTATION

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

2. This Circular replaces the Finance Ministry's Circular No. 98/2004/TT-BTC dated October 19, 2004, guiding the implementation of the Government's Decree No. 42/2001/ND-CP dated August 1, 2001, detailing the implementation of a number of articles of the Law on Insurance Business.

3. Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and settlement.