Under Government Decree No. 41/2009/ND-CP of May 5, on sanctioning of administrative violations in insurance business, from June 22 much heavier fines, VND 10-70 million, will be imposed for insurance violations. Some violations currently subject to only caution or fines will be fined or subject to fines of single level and several times higher.
Insurers that fight over, drag or buy off clients; and insurance companies which conduct insurance, insurance brokerage or reinsurance without a license, unlawfully merge, transform or dissolve themselves, or appoint chairmen of boards of directors or directors who are not qualified may face a maximum fine of VND 70 million (against the current level of VND 20 million).
Similarly, supplying untruthful information or exaggeratedly advertising the insurance scope and terms will be fined VND 50 million instead of VND 10-20 million as currently.
Violations of regulations on management and use of founding and operation licenses or licenses for setting up representative offices; administration, management and control of insurance operations will be fined at least seven times the current level (VND 1-10 million to VND 30-70 million).
Some new violations are additionally specified, including forging or modifying documents in license application dossiers or failing to comply with procedures for changing appointed actuaries, or these actuaries’ acts of improperly setting up professional reserves for life insurance policies, failing to make periodical reports or assess reinsurance programs or perform other tasks to assure financial safety of insurers.
This Decree supersedes Decree No. 118/2003/ND-CP of October 13, 2003.