Vietnam: How many sets of applications for registration of the insurance premium-charging method and basis are insurers required to submit to the Ministry of Finance?
- How many sets of applications for registration of the insurance premium-charging method and basis are insurers in Vietnam required to submit to the Ministry of Finance?
- What are the requirements for which insurers in Vietnam are allowed to use any methods to charge insurance premiums for insurance products?
- What does the application for amendments to the insurance premium-charging method and basis in Vietnam include?
How many sets of applications for registration of the insurance premium-charging method and basis are insurers in Vietnam required to submit to the Ministry of Finance?
Under the provisions of Clause 2, Article 32 of Decree 46/2023/ND-CP on procedures for registration of the insurance premium-charging method and basis:
Procedures for registration of the insurance premium-charging method and basis
1. Insurers and branches of foreign non-life insurers must register and obtain approval from the Ministry of Finance for the insurance premium-charging method and basis of insurance products of life insurance, health insurance, and motor vehicle insurance, except for civil liability insurance of motor vehicle owners before provision.
2. Insurers and branches of foreign non-life insurers must submit to the Ministry of Finance one set of application for registration of the insurance premium-charging method and basis, including the following documents:
a) An application form for registration of the insurance premium-charging method and basis, provided in Appendix VII to this Decree;
b) Summary of insurance benefits and waiver of insurance products to be provided;
c) Explanatory documents on the insurance premium-charging method and basis, at least including details about the insurance premium-charging method and basis, and formula; fees charged to customers for insurance products in the investment-linked insurance and retirement insurance business. Explanatory document on the insurance premium-charging method and basis, using the form guided by the Minister of Finance.
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Thus, according to the above regulations, insurers in Vietnam must submit 01 set of application for registration of the insurance premium-charging method and basis to the Ministry of Finance, including the following documents:
- An application form for registration of the insurance premium-charging method and basis;
- Summary of insurance benefits and waiver of insurance products to be provided;
- Explanatory documents on the insurance premium-charging method and basis, at least including details about the insurance premium-charging method and basis, and formula; fees charged to customers for insurance products in the investment-linked insurance and retirement insurance business. Explanatory document on the insurance premium-charging method and basis, using the form guided by the Minister of Finance.
Download the application form for registration of the insurance premium-charging method and basis: here
What are the requirements for which insurers in Vietnam are allowed to use any methods to charge insurance premiums for insurance products?
According to the provisions of Clause 1, Article 21 of Circular 67/2023/TT-BTC, insurers are allowed to use any methods to charge insurance premiums for insurance products, subject to meeting the following requirements:
- Insurance premiums for insurance products and fees charged to policyholders for insurance products of investment-linked insurance and retirement insurance must be charged based on statistical data, in accordance with the provisions of law and ensuring the financial safety and solvency of insurers and branches of foreign non-life insurers and must correspond to the insurance conditions and responsibilities, honoring the policyholder’s benefits;
- Insurance premiums and fees must be fair and reasonable to policyholders;
- Insurance premiums must be determined based on age, gender, health status and other characteristics of the insured, consistent with the characteristics of each product.
In case a standard fee is applied to a group of insurance customers or to a group insurance policy, the insurer or branch of a foreign non-life insurer must clearly state the principles and methods used to determine that standard fee;
- In the event of an increase or decrease in insurance premiums based on the group size, sum insured, or changes to the factors for calculating premiums leading to changes to the underlying risk; the principles and basis for the increase or decrease in premiums must be stated in the methods and factors for calculating premiums.
The premiums after the decrease must be no lower than the net insurance premiums of the product.
In the case of a premium reduction due to direct sales, where the insurer does not have to pay insurance commissions to insurance agents or insurance brokers, the maximum premium reduction shall not exceed the insurance commission ratio of the product as prescribed in Articles 51 and clause 3 Article 55 of this Circular;
- As for group health insurance policies with a term of 1 year, which are renewed annually, in case the insurance premium is adjusted based on the incurred claim ratio of the previous year, the adjustment amount shall not exceed 50% of the previous year's premium.
What does the application for amendments to the insurance premium-charging method and basis in Vietnam include?
Under the provisions of Clause 4, Article 32 of Decree 46/2023/ND-CP:
Procedures for registration of premium-charging method and basis
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. If the insurance premium-charging method and basis of an insurance product changes, or the rules, conditions, and terms of an insurance product change in a way that affects the insurance premium-charging method and basis, the insurer or branch of the foreign non-life insurer shall submit to the Ministry of Finance one application for amendments to the insurance premium-charging method and basis, including the following documents:
a) An application form for amendments to the insurance premium-charging method and basis, provided in Appendix VII to this Decree;
b) Documents that explain the amendments certified by the Appointed Actuary.
Thus, the application for amendments to the insurance premium-charging method and basis in Vietnam includes:
- An application form for amendments to the insurance premium-charging method and basis;
- Documents that explain the amendments certified by the Appointed Actuary.
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