Application and procedures for registration of premium calculation methods and bases of microinsurance products in Vietnam

Application and procedures for registration of premium calculation methods and bases of microinsurance products in Vietnam (Internet image)

Regarding this matter, LawNet would like to answer as follows:

1. Application and procedures for registration of premium calculation methods and bases of microinsurance products in Vietnam

Application and procedures for registration of premium calculation methods and bases of microinsurance products in Vietnam according to Article 6 of Decree 21/2023/ND-CP are as follows:

- Providers of microinsurance products are required to register premium calculation methods and bases of their microinsurance products before they are launched.

- An application for registration of premium calculation methods and bases which includes the following documents shall be submitted to the Ministry of Finance of Vietnam:

+ An application form made using Form No. 06 in the Appendix enclosed with Decree 21/2023/ND-CP;

+ A summary of insurance benefits and disclaimer clauses of the microinsurance product to be provided;

+ Formulas, methods and bases for calculation of net premium, gross premium and documentary explanations about premium calculation bases of the microinsurance product to be provided; principles for increasing/decreasing premiums (if any). These documents must bear certification given by actuaries of microinsurance products.

- Within 14 days from the receipt of an adequate and valid application, the Ministry of Finance of Vietnam shall give a written approval of premium calculation methods and bases to the applicant. If an application is refused, the Ministry of Finance of Vietnam shall specify reasons in writing.

- If there are any changes in premium calculation methods and bases of its microinsurance product, the microinsurance product provider shall submit an application for approval of such changes to the Ministry of Finance of Vietnam. Such an application includes:

+ An application form made using Form No. 06 in the Appendix enclosed with Decree 21/2023/ND-CP;

+ Documents indicating explanations about such changes which must bear certification given by actuaries of microinsurance products.

- Within 14 days from the receipt of an adequate and valid application, the Ministry of Finance of Vietnam shall give a written approval of changes in premium calculation methods and bases to the applicant. If an application is refused, the Ministry of Finance of Vietnam shall specify reasons in writing.

2. Regulations on the maximum sums insured and premiums of microinsurance products in Vietnam

Regulations on the maximum sums insured and premiums of microinsurance products in Vietnam according to Article 3 of Decree 21/2023/ND-CP are as follows:

- The sum insured under a microinsurance contract for protection against life and health risks shall not exceed 05 times the annual per capita income for near poverty households in urban areas announced by the Government at the time of launching the microinsurance product.

- The sum insured under a microinsurance contract for protection against property risks shall exceed neither the market price of the insured property at the time of conclusion of the contract nor 05 times the annual per capita income for near poverty households in urban areas announced by the Government at the time of launching the microinsurance product.

- The annual insurance premiums of a microinsurance contract shall not exceed 5% of the annual per capita income for near poverty households in urban areas announced by the Government at the time of launching the microinsurance product. Insurance premiums must be appropriate for insurance benefits.

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