Some new regulations in insurance business activities

On November 01, 2019, the Government issued Decree 80/2019/ND-CP (Decree 80) amending and supplementing Decree 73/2016/ND-CP and Decree 98/2013/NĐ-CP on the insurance business field.

Accordingly, Decree 80 amends and supplements some contents as follows:

 1. Insurance auxiliary services

Insurance auxiliary services are an integral part of insurance business activities recognized in Law on insurance business and the amended Law on intellectual property 2019. The individuals who directly conduct insurance auxiliary activities must satisfy the following requirements on diplomas and certificates:

• Insurance consultancy activities: possess a university or higher degree in insurance major, or a university or higher degree in another major and a certificate of insurance consultancy.
• Insurance risk evaluation activities: possess a university or higher degree in insurance major, or a university or higher degree in another major and a certificate of insurance risk evaluation.
• Insurance actuarial activities:
• For life insurance and health insurance enterprises, they must be trained and have carried out actuarial works for at least 10 years in the sector of life insurance and health insurance, and are fellows of one of internationally recognized societies of actuaries or a Society of actuaries which is an official member of an international Society of actuaries; otherwise, they must have at least 05 years doing actuarial works in the sector of life insurance and health insurance after becoming fellows of one of such societies; and have not violated actuaries’ occupational ethics.
• For non-life insurance enterprises, reinsurance enterprises, foreign branches, they must be fellows of a Society of actuaries which is an official member of an international Society of actuaries; and have not violated actuaries’ occupational ethics.
• Damage assessment activities: possess a college or higher degree appropriate for the field of assessment; possess a certificate of damage assessment in insurance and have at least three years of experience in the field of assessment
• For insurance claim settlement activities: they must possess a college or higher degree and a certificate of insurance claim settlement.

 

2. Penalizing administrative violations in the field of insurance business

2.1 Acts of providing cross-border insurance auxiliary services by foreign individuals and organizations

• A fine of VND 90 – 100 million for foreign individuals that provide cross-border insurance consultancy services in Vietnam, who are not citizens of the countries or territories to which Vietnam has a commitment to open the market for cross-border insurance consultancy services.
• A fine of VND 180 to 200 for foreign organizations that provide cross-border insurance services in Vietnam and have no head office in the countries or territories to which Vietnam have a commitment to open the market for cross-border insurance auxiliary services.

In addition, foreign individuals or organizations providing insurance auxiliary services can be suspended for 03-06 months for any of the following violations:

• Provide cross-border insurance auxiliary services in Vietnam that fail to meet the requirements in Articles 93b.1 and 93b.2, as supplemented by Article 1.4 of the Law amending and supplementing a number of articles of the Laws on insurance business and intellectual property.
• Provide insurance auxiliary services inconsistent with the forms of insurance auxiliary service allowed to be provided as prescribed by law.

During the suspension from insurance auxiliary service provision under the Decision on sanctioning administrative violations, if foreign individuals or organizations continue to commit the said violations, they will be suspended from providing cross-border insurance consultancy services in Vietnam for 6-12 months.

2.2 Acts of providing insurance auxiliary services by individuals and organizations that provide those services

• A fine of VND 20 to 30 million for any of the following violations committed during the provision of insurance auxiliary services:
  • Fail to keep customer information confidential or use customer information for improper purposes or provide information to third parties without the customer’s consent, except in accordance with the law.
  • Insurance auxiliary service providers provide the services of assessing insurance damage and settling insurance claims for the insurance policies in which they are also the insurance buyers, the insured or the beneficiaries.
  • Insurance broker enterprises provide the damage assessment services for the insurance policies for which they are in charge of the arrangements.
  • Fail to comply with the technical standards in the field of insurance auxiliary service.
  • Contracts for provision of insurance auxiliary service are not made in writing.

• A fine of VND 60 to 70 million for any of the following violations committed during the provision of insurance auxiliary services:
  • Provide insurance auxiliary services without fulfilling the conditions for providing insurance auxiliary services as prescribed by law. In addition, individuals providing insurance auxiliary services different from the permitted form of insurance auxiliary service will be subject to a further penalty of revoking the Certificate of insurance consultancy for 01-03 months.
  • Organizations without legal status providing one of the following insurance auxiliary services: Insurance risk assessment, insurance actuarial service, insurance damage assessment, insurance claim settlement assistance.

 

In addition, individuals and organizations providing insurance auxiliary services and committing the above violations will be subject to a further penalty of suspension from service provision for 01-03 months.

This decree comes into effect as from November 01, 2019

 

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