Regulations on penalties for violations of cross-border insurance service in Vietnam from February 15, 2025

Regulations on penalties for violations of cross-border insurance service in Vietnam from February 15, 2025 (Image from the internet)

On December 30, 2024, the Government of Vietnam issued Decree 174/2024/ND-CP regulating penalties for administrative violations in the field of insurance business.

Regulations on penalties for violations of cross-border insurance service in Vietnam from February 15, 2025

Decree 174/2024/ND-CP specifies administrative violations, completed administrative violations, and ongoing administrative violations; forms of penalties, fine levels, and measures to remedy consequences for each administrative violation; subjects of penalties; authority to impose penalties, specific fines according to each title and authority to make records of administrative violations in the field of insurance business.

In particular, Article 20 of Decree 174/2024/ND-CP stipulates penalties for violations of regulations on providing cross-border insurance services as follows:

(1) A fine ranging from VND 20,000,000 to VND 40,000,000 shall be imposed on the insurer, foreign branch, or insurance brokerage enterprises licensed in Vietnam for any of the following violations:

- Failure to retain and provide documents proving that the cross-border insurance service provider in Vietnam meets the conditions specified by law, as stipulated in Clause 1, Article 90 of Decree 46/2023/ND-CP;

- Failure to report or improperly reporting the involvement in providing cross-border insurance services to the Ministry of Finance as required by law, as stipulated in Clause 2, Article 90 of Decree 46/2023/ND-CP.

(2) A fine ranging from VND 40,000,000 to VND 60,000,000 shall be imposed on foreign-invested economic organizations and foreigners working in Vietnam for any of the following violations:

- Participating in insurance abroad without going through an insurance brokerage enterprise licensed to establish and operate in Vietnam according to the provisions of law, as stipulated in Article 6 of the Law on Insurance Business.

- Participating in insurance with a foreign insurer that does not meet the conditions for providing cross-border insurance services according to the provisions of law, as stipulated in Article 86 of Decree 46/2023/ND-CP.

(3) A fine ranging from VND 60,000,000 to VND 80,000,000 shall be imposed on the insurer, foreign branch, or insurance brokerage enterprises licensed in Vietnam for violating any of the following:

- Using a foreign insurer or insurance brokerage enterprise to provide insurance or brokerage services across borders in Vietnam without meeting the conditions for providing cross-border insurance services according to the provisions of law, as stipulated in Article 86 of Decree 46/2023/ND-CP;

- Using a foreign organization to provide cross-border auxiliary insurance services in Vietnam without meeting the conditions for providing cross-border auxiliary insurance services according to the provisions of law, as stipulated in Article 87 of Decree 46/2023/ND-CP;

- Using an organization to provide insurance or brokerage services across borders that does not have its headquarters in a country or territory with which Vietnam has signed international trade agreements, including agreements on providing cross-border insurance services in Vietnam according to the provisions of law, as stipulated in Clause 1, Article 85 of Decree 46/2023/ND-CP;

- Using an organization to provide cross-border insurance services without going through an insurance brokerage enterprise licensed to establish and operate in Vietnam according to the provisions of law, as stipulated in Clause 1, Article 88 of Decree 46/2023/ND-CP.

(4) Measures to remedy consequences:

Enforced compliance with the law in case of a violation specified in (1).

More details can be found in Decree 174/2024/ND-CP effective from February 15, 2025.

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