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Official Gazette

Friday, November 15, 2019

Revised regulations on insurance business proposed

Updated: 14:15’ - 17/10/2019
Foreign organizations wishing to provide cross-border insurance auxiliary services would have to meet higher conditions, according to a draft decree prepared by the Ministry of Finance.

The draft decree revises three decrees relating to the insurance sector, namely Decree 98 of 2013, Decree 73 of 2016 and Decree 48 of 2018.

Cross-border insurance auxiliary service providers include foreign individuals providing the cross-border insurance consultancy service and foreign organizations providing all types of cross-border insurance auxiliary services permitted by law.

Under the draft, the conditions applicable to individual cross-border insurance consultancy service providers would be the same as those imposed on those providing insurance consultancy services in the country.

Meanwhile, foreign organizations wishing to provide cross-border insurance auxiliary services would be subject to tighter conditions. Specifically, foreign organizations must be licensed to provide cross-border insurance auxiliary services in Vietnam by authorities of the countries where they are headquartered and have been lawfully operating in Vietnam for at least 10 years. They must also satisfy other conditions on financial capacity and personnel and must buy professional liability insurance.

The draft also contains provisions on sanctioning of violations committed by foreign individuals and organizations in the course of providing cross-border insurance auxiliary services.

Specifically, the maximum fine of VND 180-200 million (USD 7,800-8,600) would be imposed on foreign organizations providing cross-border insurance auxiliary services in Vietnam though their host countries have not yet signed with Vietnam treaties on provision of cross-border insurance auxiliary services. Those that fail to buy professional liability insurance would be fined VND 50-60 million (USD 2,200-2,600).  As for individual violators, fines would be VND 90-100 million (USD 3,900-4,300) and VND 25-30 million (USD 1,100-1,300), respectively.

Service providers may also be suspended from providing cross-border insurance auxiliary services for between three and six months if failing to meet the prescribed conditions. The suspension duration may be extended to 12 months in case the violators repeat their violations.- (VLLF)
 

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