Application for carrying out pension insurance product in Vietnam

Application for carrying out pension insurance product in Vietnam (Image from the Internet)

1. What is pension insurance?

According to Clause 1, Article 2 of Circular 115/2013/TT-BTC, pension insurance is a product of life insurance which is performed by insurers with the aim to provide an additional income to insured persons upon they passed the working age.

In which, pension insurance includes pension insurance for each individual and pension insurance for group of laborers.

Case of pension insurance for a group of laborers (hereinafter referred to as the for-group pension insurance), the insurance buyer will be the employer, laborers will be received all rights and benefits of insurance contract after a defined time according to agreements between parties and stated in insurance contract.  

(Clause 2, Article 2 of Circular 115/2013/TT-BTC)

2. Application for carrying out pension insurance product in Vietnam

The insurers must be accepted in writing by the Ministry of Finance before carrying out pension insurance product.

A dossier of application for carrying out pension insurance product includes:

- Request for ratifying pension insurance product made according to form in Annex II promulgated together with Circular 115/2013/TT-BTC;

- Plan and explanation of plan on carrying out pension insurance product, including the following contents:

(i) Main content summary of pension insurance product anticipated to carry out, including information of objective market of product, insurance rights and benefits anticipated to provide;

(ii) Geographical areas anticipated to carry out pension insurance product;

(iii) Explanation of technical material facilities ensuring for implementation of pension insurance product, including: The information technology system; accounting system; processes of recruiting, selecting, training, managing agents for distribution of products; content and programs of training the pension insurance agents; list and dossiers of officers training the pension insurance agents;     

(iv) Base of allocation of insurance premiums;

(v) The handling plan of the insurers for voluntary pension fund in cases: When clients request for payment insurance money upon happening insurance event; clients request for transfer of pension insurance accounts; the maturity day of insurance contracts and other cases as prescribed in rules, terms;

- Commitments in writing enclosed with explanation in details about the insurer’s satisfaction of conditions specified in Article 4 of Circular 115/2013/TT-BTC and diplomas proving qualification, capability, professional experiences of officers managing voluntary pension fund;

- Rules, terms and charge table of pension insurance product anticipated to carry out;

- Technical facilities of pension insurance product anticipated to carry out, in which clearly state the formula, method, explanation of technical base for calculation of charges and reserve of professional operation;

- Documents for introduction of products, documents illustrating for sale, form of insurance request, form of insurance certificate, and other types of papers on which clients must declare and sign, upon buying insurance.

Within 30 (thirty) days after receiving a full dossier as prescribed in Clause 2 of Article 9 of Circular 115/2013/TT-BTC, the Ministry of Finance shall have a written acceptance or refusal.  In case of refusal, the Ministry of Finance shall clearly explain the reason thereof.

In case where an insurer wishes to carry out new pension insurance product other than pension insurance product already approved, dossier of application for ratifying pension insurance product will exclude documents specified in points b and c Clause 2 of Article 9 of Circular 115/2013/TT-BTC, unless these documents have changes in comparison with documents at time when pension insurance product are ratified by the Ministry of Finance in the previous time.

3. The basic insurance rights and benefits of pension insurance product in Vietnam

* For periodical pension rights and benefits in Vietnam

Specifically, in Clause 2, Article 5 of Circular 115/2013/TT-BTC, for periodical pension rights and benefits, the insurers must ensure:

- Pension rights and benefits will be paid periodically until the insured person die or not less than 15 (fifteen) years, depending on agreements in insurance contract;

- The insurers and the insurance buyer may agree about the level to enjoy pension rights and benefits of each period and number of periods for receiving pension rights and benefits;

- Calculation of accumulated interests from pension rights and benefits not yet been paid to the insurance buyer, but these interests are not less than the minimum commitment investment interest rate as agreed in insurance contract.

* For rights and benefits of risk insurance in Vietnam

For rights and benefits of risk insurance, the insurers must provide during time limit of insurance premium payment and may continue provision of these rights and benefits during time of receiving pension rights and benefits, depending on agreements in insurance contract. Rights and benefits of risk insurance include minimally the following rights and benefits:

- The burying subsidy:

When receiving request for paying rights and benefits of insurance due to death, irrespective of the death within or outside the insured scope, the insurers must pay immediately the burying subsidy to the beneficiary as agreed in insurance contract.

- Rights and benefits of insurance for death or permanent and entire injury:

+ When an insured person died or injured permanently and entirely under the insured scope and in the prescribed duration, the insurers must pay to the beneficiary an insurance amount as agreed in insurance contract.

+ The insurance buyer may select the insurance amount upon entering into the insurance contract and may adjust that insurance amount during the effective duration of insurance contract as agreed in insurance contract.

(Clause 3, Article 5 of Circular 115/2013/TT-BTC)

Thanh Rin

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