Which agency has the right to manage the Fund for the protection of the Insured in Vietnam? When will the Fund be used?
Which agency has the right to manage the Fund for the protection of the Insured in Vietnam?
According to the provisions of Clause 1, Article 93 of Decree 46/2023/ND-CP as follows:
Principles of management and use of the Fund for the protection of the Insured
1. The Fund for the protection of the Insured shall be managed and decided by the Ministry of Finance in a safe, efficient manner and with proper purposes.
2. The Fund for the protection of the Insured is managed and used separately for each type of insurance: life insurance, non-life insurance and health insurance.
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According to the above regulations, the Fund for the protection of the Insured shall be managed and decided by the Ministry of Finance in a safe, efficient manner and with proper purposes.
Which agency has the right to manage the Fund for the protection of the Insured in Vietnam? When will the Fund be used?
When will the Fund for the protection of the Insured in Vietnam be used?
According to the provisions of Clause 5, Article 93 of Decree 46/2023/ND-CP as follows:
Principles of management and use of the Fund for the protection of the Insured
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4. Where it is necessary to use the Fund for Protection of the Insured as prescribed in Clause 5 of this Article, the Ministry of Finance shall set up a Council to consider making payouts. The Council shall have composition and duties as follows:
a) The Council is composed of representatives of the Ministry of Finance, representatives of the Association of Vietnamese Insurers, representatives of insurers receiving the transfer the portfolios of insurance policies (in a case that the Ministry of Finance assigns the insurer to receive the transfer the portfolios of insurance policies from a bankrupt or insolvent insurer);
b) Duties of the Council: examine the insurance claims; develop a plan to use the Fund and submit it to the Ministry of Finance for approval (including a plan to pay out insurance policies of the bankrupt or insolvent insurer, and a plan to use the Fund's assets to carry out perform assigned tasks).
The Council may outsource the performance of assigned tasks.
c) The Council is allowed to use the seal of the authority tasked to manage the Fund for the Protection of the Insured when performing its duties.
5. The Fund for the Protection of the Insured is used in the following cases:
a) In case an insurer or a branch of foreign non-life insurer becomes insolvent and has taken measures to restore solvency but still cannot rectify it, the insurer or branch may use the Fund for Protection of the Insured under the decision of the Ministry of Finance on termination of measures to restore solvency;
b) The insurer goes bankrupt and the Fund for Protection of the Insured is used from the time the judge issues a decision declaring the insurer bankrupt;
c) In case the insurer receives the transfer the portfolios of insurance policies from the bankrupt or insolvent insurers, The Fund for the Protection of the Insured will be used to cover the shortfall between the insurance assets and liabilities, as well as shortages of corresponding technical reserves.
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Accordingly, the Fund for the protection of the Insured is used in the cases specified in Clause 5, Article 93 above.
There are case where the insurer goes bankrupt and the Fund for Protection of the Insured is used from the time the judge issues a decision declaring the insurer bankrupt.
What are the expenditures of the Fund for the Protection of the Insured in Vietnam?
According to the provisions of Clause 1, Article 94 of Decree 46/2023/ND-CP, the content is as follows:
Expenditures of the Fund for the Protection of the Insured
1. The Fund for the Protection of the Insured may have the following expenditures:
a) Insurance payout, refund of cash surrender value, insurance compensation, or premium refund as prescribed in the insurance policy upon request of the insolvent insurer or branch of foreign non-life insurer under the decision of the Ministry of Finance on termination of measures to restore solvency, or upon request of the bankrupt insurer under the judge’s decision on declaration of bankruptcy;
b) The shortfall between the insurance assets and liabilities, as well as shortages of corresponding technical reserves for the insurer that is assigned to receive the transfer the portfolios of insurance policies from the bankrupt or insolvent insurers;
c) Expenses for the management of the Fund for the Protection of the Insured, including Cost of property repair, service costs, payment of trust service fees and other expenses. The amount of expenditure shall comply with applicable law;
d) Expenses for performing the tasks of the Council decided by the Ministry of Finance in the plan for using the Fund's assets to perform the assigned tasks as prescribed at Point b, Clause 4, Article 93 of this Decree.
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Thus, the expenditures of the Fund for the Protection of the Insured is specified as above.
It includes the case where the shortfall between the insurance assets and liabilities, as well as shortages of corresponding technical reserves for the insurer that is assigned to receive the transfer the portfolios of insurance policies from the bankrupt or insolvent insurers.
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