Are insurance brokerage companies entitled to promotion in the form of promises to incite clients to enter into insurance contracts in Vietnam?
Are insurance brokerage companies entitled to promotion in the form of promises to incite clients to enter into insurance contracts in Vietnam?
Pursuant to the provisions of Clause 3, Article 137 of the 2022 Law on Insurance Business in Vietnam as follows:
Rights and obligations of insurance brokerage companies in Vietnam
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3. Insurance brokerage companies shall be prohibited from performing the following acts:
a) Prevent policyholders or insured persons from providing information related to insurance contracts or incite policyholders or insured persons not to give details about insurance contracts;
b) Do promotion in the form of promises to provide illegal benefits to incite clients to enter into insurance contracts;
c) Incite policyholders to nullify insurance contracts remaining in effect to purchase new insurance contracts;
d) Recommend clients to buy insurance bound by less competitive requirements, terms and conditions at insurance companies or branches of foreign non-life insurance companies than those at others in order to earn higher insurance brokerage commission;
dd) Provide clients with false information or information irrelevant to insurance requirements, terms and conditions imposed by insurance companies or branches of foreign non-life insurance companies.
According to the above provisions, insurance brokerage companies must not do promotion in the form of promises to provide illegal benefits to incite clients to enter into insurance contracts.
Are insurance brokerage companies entitled to promotion in the form of promises to incite clients to enter into insurance contracts in Vietnam?
What are the rights and obligations of insurance brokerage companies in Vietnam?
Pursuant to the provisions of Clause 1, Article 137 of the 2022 Law on Insurance Business in Vietnam, insurance brokerage enterprises must have the following rights and obligations:
Rights and obligations of insurance brokerage companies in Vietnam
1. Insurance brokerage companies shall have the following rights:
a) Receive root insurance brokerage commissions, reinsurance brokerage commissions in accordance with the regulations of the Minister of Finance;
b) Gain proceeds from provision of insurance ancillary services;
c) Gain proceeds from other activities related to insurance contracts that are requested by policyholders;
d) Reserve other rights prescribed by law.
2. Insurance brokerage companies shall take on the following rights:
a) Ensure privacy and security for information provided by clients, insurance companies, reinsurance companies and foreign branches in Vietnam, except as requested by the competent regulatory authority or agreed by clients, insurance companies, reinsurance companies and foreign branches in Vietnam;
b) Pay clients compensation for any loss or damage caused during the process of rendering insurance brokerage services;
c) Disclose pieces of information authorized by the Minister of Finance to clients;
d) Separately account for and track collections or payments authorized by insurance companies, reinsurance companies or foreign branches in Vietnam;
dd) Purchase professional liability insurance plans tailored for insurance brokerage services;
e) Assume other obligations prescribed in law.
Thus, insurance brokerage companies have the above rights and obligations.
What are the changes relying upon approval or notification?
Pursuant to the provisions of Article 136 of the 2022 Law on Insurance Business in Vietnam stipulating as follows:
Changes relying upon approval or notification
1. In order to make any change in the following information, insurance brokerage companies need to seek the written approval from the Ministry of Finance:
a) Corporate name or head office’s address;
b) Amount of charter capital;
c) Type, scope and period of business;
d) Assignment of shares or ownership interests that helps shareholders or members contributing capital to own at least 10% of charter capital, or cause shareholders or members contributing capital to own less than 10% of charter capital;
dd) Chairperson of the Managing Board or Chairperson of the Board of Members, Director or General Director;
e) Business split-up, split-off, merger, amalgamation and transformation into another business type; establishment of new branches, representative offices, and other types of commercial establishment in foreign countries.
2. Insurance brokerage companies need to notify the Ministry of Finance in writing within 15 days after making the following changes:
a) Company's charter;
b) Opening, termination and relocation of the branch or representative office.
3. Within 10 days of receipt of the written consent to any changes prescribed in clause 1 of this Article from the Ministry of Finance, the Ministry of Finance shall be responsible for posting updated information on the Web Portal of the Ministry of Finance.
4. The Government shall impose detailed regulations regarding application conditions, procedures, documentation requirements and processes for approving changes referred to in clause 1 of this Article, and documentation requirements, application procedures and processes for recording the changes referred to in point b of clause 2 of this Article.
According to the above regulations, in order to make any change in the following information, insurance brokerage companies need to seek the written approval from the Ministry of Finance:
- Corporate name or head office’s address;
- Amount of charter capital;
- Type, scope and period of business;
- Assignment of shares or ownership interests that helps shareholders or members contributing capital to own at least 10% of charter capital, or cause shareholders or members contributing capital to own less than 10% of charter capital;
- Chairperson of the Managing Board or Chairperson of the Board of Members, Director or General Director;
- Business split-up, split-off, merger, amalgamation and transformation into another business type; establishment of new branches, representative offices, and other types of commercial establishment in foreign countries.
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