What are tasks of Compliance Control Departments regarding internal control of insurance companies in Vietnam?

What are tasks of Compliance Control Departments regarding internal control of insurance companies in Vietnam?

Pursuant to Article 13 of the Circular 70/2022/TT-BTC (takes effect from 01/01/2023) stipulating tasks of Compliance Control Departments regarding internal control of insurance companies in Vietnam as follows:

A Compliance Control Department shall have the following tasks and duties:

1. Provide expert counsels in order to help General Director (Director) or a relevant competent authority to issue internal control procedures.

2. Carry out the annual or unscheduled examination and assessment of compliance with the provisions of law, internal rules and regulations and professional ethical standards of staff members and functional or operations departments.

3. Support relevant departments in the process of formulating and reviewing internal rules and regulations to ensure compliance with regulatory provisions; making recommendations or comments on, and improving internal procedures, rules and regulations.

4. Prepare quarterly, annual and ad-hoc update reports for submission to the General Director (Director) on compliance with the provisions of law, internal rules and regulations and professional ethical standards of staff members and functional or operations departments, including proposals for modifications of technical procedures (where necessary). Each quarterly report shall be submitted no later than 30 days following the last day of the quarter in question while each annual report shall be submitted no later than 90 days following the last day of the year in question.

5. Report to the Governing boards or the Boards of Members of the insurance companies, reinsurance companies or parent companies of foreign branches in a timely manner when detecting violations related to compliance with law that are committed by these insurance companies, reinsurance companies or foreign branches.

What are tasks of internal audit of insurance companies in Vietnam?

Pursuant to Article 14 of the Circular 70/2022/TT-BTC (takes effect from 01/01/2023) stipulating tasks of internal audit of insurance companies in Vietnam as follows:

An Internal Audit shall have the following tasks and duties:

1. Audit compliance with the regulatory provisions of laws, internal procedures, rules and regulations of the audited insurance company, reinsurance company or foreign branch.

2. Audit safety and effectiveness in management and usage of capital, assets and other resources of the audited insurance company, reinsurance company or foreign branch.

3. Audit accuracy, integrity and effectiveness of the procedures for control of financial information and the financial reporting.

4. Audit completeness, accuracy and safety of information technology systems and professional software in use.

5. Audit other matters as requested by the Governing board or the Board of Members of the audited insurance company, reinsurance company and parent company of the audited foreign branch.

What are principles of internal audit of insurance companies in Vietnam?

Pursuant to Article 15 of the Circular 70/2022/TT-BTC (takes effect from 01/01/2023) stipulating principles of internal audit of insurance companies in Vietnam as follows:

1. Independence:

a) The internal audit department must be separated from other departments or functions of the first and second Line of Defense;

b) A person in charge of internal audit shall not be allowed to simultaneously undertake the roles of the first and second Line of Defence;

c) Internal audit shall in no case be prejudiced when determining the audit scope and subject matters to be audited, and when carrying out its assessment and making audit reports.

2. Objectivity:

a) Persons in charge of internal audit shall have impartial, honest, fair and unbiased assessment views;

b) Entries or recordings contained in internal audit reports must be discreetly analyzed and based on collected data and information;

c) Persons in charge of internal audit shall not be allowed to carry out the internal audit of internal rules, regulations, policies, formalities and procedures of which formulation is mainly under their responsibility;

d) Persons in charge of internal audit shall not be allowed to get involved in auditing operations or departments put under their responsibility to carry out such operations or manage such departments within 02 years from the effective date of the decision on exclusion from doing so binding upon them;

dd) Persons in charge of internal audit shall promptly report to the Head of the internal audit department on issues that may affect the objectivity when carrying out internal audits. In case it is discovered that the person in charge of internal audit may not ensure conformance to the principle of objectivity in his/her internal audit activities, the Head of the internal audit department must report to the Governing Board or the Board of Members of the audited insurance company, reinsurance company or parent company of the audited foreign branch to seek any appropriate solution;

e) Performance of the Head of the internal audit department shall be regularly examined, reviewed and assessed by the Governing Board or the Board of Members of the audited insurance company, reinsurance company and parent company of the audited foreign branch.

3. Persons in charge of internal audit shall comply with laws and be legally responsible for their assigned internal audit duties.

Best regards!