Internal audit procedures and regulations of the insurance companies in Vietnam

Internal audit procedures and regulations of the insurance companies in Vietnam (Image from the Internet)

1. Principles of internal audit of the insurance companies  in Vietnam

The principles of internal audit of the insurance companies according to Article 15 Circular 70/2022/TT-BTC are as follows:

* Independence:

- The organization and activities of the internal audit department must be independent of the departments at the first and second lines of defense;

- Internal audit staff must not concurrently hold positions in departments at the first and second lines of defense;

- Internal audit must not be subject to any interference during the determination of the audit scope and content, when conducting evaluations, and reporting audit results.

* Objectivity:

- Internal audit staff must ensure objectivity, honesty, fairness, and impartiality;

- Entries in the internal audit report must be carefully analyzed and based on collected data and information;

- Internal audit staff must not audit the regulations, internal policies, procedures, and processes for which they are primarily responsible for developing;

- Internal audit staff must not audit activities or departments they were responsible for operating or managing within two years from the date of the decision to stop such activities or management;

- Internal audit staff must promptly report to the Head of the Internal audit Department any issues that may affect objectivity when conducting internal audit activities.

If it is found that internal audit staff may not ensure the principle of objectivity in internal audit activities, the Head of the Internal audit Department must report to the Board of Directors, the Members' Council of the insurance companies, reinsurance companies, and parent company of a foreign branch to take appropriate measures;

- The Board of Directors, the Members' Council of the insurance companies, reinsurance companies, and parent company of a foreign branch must regularly check, review, and evaluate the performance of the Head of the Internal audit Department.

* Internal audit staff must comply with the law and be responsible before the law for internal audit activities within their assigned duties.

2. Internal audit procedures and regulations of the insurance companies in Vietnam

Internal audit procedures and regulations of the insurance companies in Vietnam according to Article 16 Circular 70/2022/TT-BTC are as follows:

- Insurance enterprises, reinsurance enterprises, and foreign branches must issue internal audit regulations and procedures.

- Internal audit regulations must include the following content:

+ Objectives, scope of activities, position, tasks, powers, responsibilities of the internal audit department within the insurance companies, reinsurance companies, foreign branch, and its relationship with other departments;

+ Basic principles, professional requirements, quality assurance of internal audit, and other related content.

- Internal audit procedures should provide detailed guidance on the following:

+ Methods for assessing and categorizing risk levels (low, medium, high) to build the internal audit plan;

+ Methods for developing the annual internal audit plan, how to conduct audit tasks, prepare and send audit reports, and follow-up on post-audit recommendations;

+ Methods for managing and storing internal audit documentation and records.

3. Internal audit plans of the insurance companies in Vietnam

The internal audit plans of the insurance companies in Vietnam according to Article 17 Circular 70/2022/TT-BTC is as follows:

- The internal audit department must develop and implement the annual internal audit plan, including the audit scope, audit subjects, audit objectives, audit schedule, and allocation of resources.

- Divisions and operations with high-risk levels as assessed by the insurance companies, reinsurance companies, or foreign branch must be included in the annual audit plan.

- When developing the internal audit plan, the internal audit department must reserve sufficient time to conduct unscheduled audits when required.

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