Obligation to notify the transfer and notify it to the insurance buyers in Vietnam
What are obligations to notify the transfer and notify it to the insurance buyers in Vietnam? What are procedures for transfer of insurance contracts in Vietnam? I bought insurance from A company, but when the insured event happened, I was paid by company B without receiving notice from company A. Through the process of asking information from sales staff insurance, I knew that insurance company A has transferred the entire insurance policy to company B. May I ask is it correct that company A did not notify me of this transfer?
1. What are obligations to notify the transfer and notify it to the insurance buyers in Vietnam?
Pursuant to Clause 2, Article 76 of the Law on Insurance Business 2000, the procedures for transferring insurance contracts are as follows:
2. Within 30 days from the date the Finance Ministry approves the transfer of insurance contracts, the insurance contract-transferring enterprises must make public the transfer and notify it in writing to the insurance buyers.
As such, company A is obliged to notify you in writing within 30 days from the date the Finance Ministry approves the transfer of insurance contracts. Company A's failure to notify you of this is a breach of contract transfer procedures in Vietnam.
2. What are procedures for transfer of insurance contracts in Vietnam?
Pursuant to Article 48 of Decree 73/2016/ND-CP stipulating transfer of insurance contracts as follows:
1. Insurance enterprises and foreign branches shall submit 01 application to the Ministry of Finance for their transfer of all insurance contracts under one or some lines of insurance (referred to as the ceding enterprise), as follows:
a) The filled-in form of application for transfer as prescribed by the Ministry of Finance;
b) The plan of transfer, which indicates:
- Name and address of the insurance enterprise or foreign branch receiving transfers (referred to as the accepting enterprise);
- Lines of insurance and quantity of insurance contracts being transferred;
- Technical reserves transfer method and insurance liabilities in relation to the contracts being transferred;
- Expected time of the transfer;
- Elaborate explanations of the accepting enterprise about its satisfaction of financial requirements after the transfer.
c) The transfer contract, which primarily includes:
- The object(s) being transferred;
- Rights and duties of parties of the transfer;
- Expected time of the transfer;
- Dispute settlement methods.
d) Undertaking of the accepting enterprise to maintain the interests of buyers according to insurance contracts after the transfer takes effect.
2. Ministry of Finance, in 21 working days upon receiving the valid and adequate application, shall issue its approval in writing. Ministry of Finance, if rejecting the application, shall provide explanations in writing.
3. In 30 days upon the Ministry of Finance’s approval of the transfer of insurance contracts, the ceding enterprise must announce the transfer in the following manner:
a) Publish the following primary details of the transfer on two daily newspapers in 05 consecutive issues:
- Name and address of the ceding enterprise and accepting enterprise;
- Lines of insurance and quantity of insurance contracts being transferred;
- Expected time of the transfer;
- Contact address for insurance buyers’ complaints and inquiries concerning the transfer.
b) Deliver a notice and the summary of the transfer plan to each buyer. The notice delivered to insurance buyers must clearly indicate that the buyers shall be allowed to terminate their insurance contracts in 15 days upon receiving the notice if they object to the transfer plan. Moreover, the notice must specify the date that the transfer takes effect.
If a buyer terminates his insurance contract, the ceding enterprise must give the buyer a refund. Such refund shall be the paid premiums commensurate with the remaining duration of the insurance contract, minus the relevant reasonable expenses in case of non-life insurance or health insurance. Otherwise, the refund shall be the paid premiums remaining or the surrender value, whichever is larger, in case of life insurance.
4. Upon the signing of a contract for transfer of insurance contracts, the ceding enterprise cannot engage in new insurance contracts under the insurance line(s) transferred.
5. In 60 days upon the Ministry of Finance’s approval of the transfer plan, the ceding enterprise shall transfer to the accepting enterprise:
a) Every insurance contract in effect, which is included in the transfer plan approved by the Ministry of Finance;
b) Documents on payout requests or payment claims, which have not been settled, in relation to the insurance line(s) transferred;
c) All assets, funds and technical reserves regarding the insurance contracts transferred and unsettled payout requests or payment claims in relation to insurance line(s) transferred.
6. The accepting enterprise shall be responsible for cooperating with the ceding enterprise in formulating the transfer plan, valuing fund-related assets and technical reserves of insurance contracts transferred and defining the date of effect of the transfer plan.
7. As of the date of effect of the transfer, the accepting enterprise shall be responsible for implementing duties under the insurance contracts transferred according to the terms of the signed agreements between the ceding enterprise and insurance buyers. Such duties include the settlement of insured events that have occurred but have not been reported. The accepting enterprise shall have the right to take in fund-related assets and technical reserves of the insurance contracts transferred and use such assets to implement duties under the insurance contracts transferred.
Best Regards!
