Reserve Fund and Insurance Policyholder Protection Fund

20:46, 11/07/2024

Law on Amendments to the Law on Insurance Business 2010 amending and supplementing a number of articles of the Law on Insurance Business 2000 was promulgated on November 24, 2010. This Law has amended and supplemented the regulations on Reserve Funds and the Policyholders' Protection Fund in the Law on Insurance Business 2000.

To be specific, according to Clause 11 Article 1 of the Law on Insurance Business (Amended) 2010, which amends and supplements Article 97 of the Law on Insurance Business 2000, the Reserve Fund and the Insurance Protection Fund are regulated as follows:

- Insurance enterprises and insurance brokerage enterprises must establish a mandatory reserve fund to supplement charter capital and ensure payment capacity. This mandatory reserve fund is deducted annually at the rate of 5% of post-tax profits. The maximum level of this fund is stipulated by the Government of Vietnam.

- In addition to this mandatory reserve fund, insurance enterprises and insurance brokerage enterprises may establish other reserve funds from post-tax profits of the financial year as prescribed in the charter of the insurer and insurance brokerage enterprise.

- The Insurance Protection Fund is established to protect the interests of the insured in cases where the insurance enterprise goes bankrupt or loses payment capacity.

The source for establishing the Insurance Protection Fund is deducted at a percentage rate on insurance premiums applicable to all insurance contracts.

The Government of Vietnam stipulates the deduction, management, and use of the Insurance Protection Fund.

More details can be found in: Law on Insurance Business (Amended) 2010, which amends and supplements several articles of the Law on Insurance Business 2000 effective from July 1, 2011.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE

0 lượt xem

- This translation is generated by OpenAI's GPT-4o model;
- The legal regulations in this article are according to Vietnamese Law;
- This English translation is for reference purposes only and not a definitive translation of the original Vietnamese texts;
- Articles may be compiled from a variety of sources;
- Applicable Terms may have expired at the time you are reading;
- If you have any questions about the copyright of the article, please contact us via email banquyen@lawnet.vn