Circular No. 89/2020/TT-BTC amending Circular 50/2017/TT-BTC guiding insurance business

CIRCULAR

On amending and supplementing a number of articles of the Ministry of Finance’s Circular No.  50/2017/TT-BTC dated May 15, 2017 on guiding the Government’s Decree No. 73/2016/ND-CP dated July 01, 2016, detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, the Ministry of Finance’s Circular No. 105/2016/TT-BTC dated June 29, 2016 guiding offshore indirect investment activities of securities trading institutions, securities investment funds, securities investment companies and insurance businesses, the Ministry of Finance’s Circular No. 195/2014/TT-BTC dated December 17, 2014 on guiding the assessment and classification of insurance businesses, the Ministry of Finance’s Circular No. 115/2014/TT-BTC dated August 20, 2014 on guiding the implementation of insurance policy specified in the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies and repealing the Ministry of Finance’s Circular No. 116/2014/TT-BTC dated August 20, 2014 on guiding a number of financial issues for insurance businesses carrying out insurance activities under the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies and the Ministry of Finance’s Circular No. 43/2016/TT-BTC dated March 03, 2016 on amending Article 5 of the Ministry of Finance’s Circular No. 116/2014/TT-BTC dated August 20, 2014 on guiding a number of financial issues for insurance businesses carrying out insurance activities under the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies

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Pursuant to the Law on Insurance Business dated December 09, 2000;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business dated November 24, 2010;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business and the Law on Intellectual Property dated June 14, 2019;

Pursuant to the Government’s Decree No. 73/2016/ND-CP dated July 01, 2016, detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business;

Pursuant to the Government’s Decree No. 80/2019/ND-CP dated November 01, 2019, amending and supplementing a number of articles of the Government’s Decree No. 73/2016/ND-CP of July 01, 2016, detailing the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, and the Government’s Decree No. 98/2013/ND-CP of August 28, 2013, on sanctioning of administrative violations in insurance business and lottery business, which had a number of articles amended and supplemented under the Government’s Decree No. 48/2018/ND-CP of March 21, 2018;

Pursuant to the Government s Decree No. 09/2019/ND-CP dated January 24, 2019, prescribing reporting regimes applicable to state administrative agencies;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017, on defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At proposal of the Director of the Insurance Supervisory Authority;

The Minister of Finance hereby promulgates the Circular on amending and supplementing a number of articles of the Ministry of Finance’s Circular No. 50/2017/TT-BTC dated May 15, 2017 on guiding the Government s Decree No. 73/2016/ND-CP dated July 01, 2016, detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, the Ministry of Finance’s Circular No. 105/2016/TT-BTC dated June 29, 2016 guiding offshore indirect investment activities of securities trading institutions, securities investment funds, securities investment companies and insurance businesses, the Ministry of Finance’s Circular No. 195/2014/TT-BTC dated December 17, 2014 on guiding the assessment and classification of insurance businesses, the Ministry of Finance’s Circular No. 115/2014/TT-BTC dated August 20, 2014 on guiding the implementation of insurance policy specified in the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies, repealing the Ministry of Finance’s Circular No. 116/2014/TT-BTC dated August 20, 2014 on guiding a number of financial issues for insurance businesses carrying out insurance activities under the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies and the Ministry of Finance’s Circular No. 43/2016/TT-BTC dated March 03, 2016 on amending Article 5 of the Ministry of Finance’s Circular No. 116/2014/TT-BTC dated August 20, 2014 on guiding a number of financial issues for insurance businesses carrying out insurance activities under the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies.

Article 1. To amend and supplement the Ministry of Finance’s Circular No. 50/2017/TT-BTC dated May 15, 2017 on guiding the Government s Decree No. 73/2016/ND-CP dated July 01, 2016, detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business:

1.To amend and supplement Article 1 as follows:

“Article 1. Scope of regulation

This Circular guides the implementation of the Government s Decree No. 73/2016/ND-CP dated July 01, 2016, detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business (hereinafter referred to as the Decree No. 73/2016/ND-CP) and the Government’s Decree No. 80/2019/ND-CP dated November 01, 2019, amending and supplementing a number of articles of the Government’s Decree No. 73/2016/ND-CP of July 01, 2016, detailing the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business, and the Government’s Decree No. 98/2013/ND-CP of August 28, 2013, on sanctioning of administrative violations in insurance business and lottery business, which had a number of articles amended and supplemented under the Government’s Decree No. 48/2018/ND-CP of March 21, 2018, including operations of insurance businesses, branches of foreign non-life insurance businesses; insurance brokerage businesses; insurance agents and training insurance agents; regimes of reporting and information disclosure of insurance businesses, branches of foreign non-life insurance businesses; insurance brokerage businesses, organizations and individuals providing insurance auxiliary service, representative offices and forms; establishment and operation of the Solvency Control Board”.

2.To amend and supplement Article 2 as follows:

“Article 2. Subject of application

This Circular applies to life insurance businesses, non-life insurance businesses, health insurance businesses and reinsurance businesses (hereinafter collectively referred to as insurance businesses), branches of foreign non-life insurance businesses in Vietnam (hereinafter referred to as foreign branches), insurance brokerage businesses, representative offices of insurance businesses, foreign insurance brokerage businesses, organizations and individuals providing insurance auxiliary service and organizations and individuals involved in enterprise business”.

3.To amend and supplement the first dash of Sub-point a, Point 3.1, Clause 3, Article 18 as follows:

Method of setting aside:

+ For insurance contracts with a term of 05 years or less: Method of net insurance premium.

+ For insurance contracts with a term of more than 5 years:

• For endowment insurance, whole life insurance, combined insurance and annuity:The method of net insurance premium shall be adjusted with Zillmer adjustment at 3% of the insurance sum. The net premium to be adjusted may not account for more than 100% of insurance premium actually collected.

• For term insurance:Net premium method with adjustment of 12-month full preliminary term.

4.To add Clause 4 after Clause 3, Article 21 as follows:

“4. Revenue from the provision of insurance auxiliary services: Enterprise businesses and foreign branches shall account into their revenue after finishing the service provision or after completing each part of the service provision, regardless such money amount has been paid or not”.

5.To amend and supplement Clause 3, Article 22 as follows:

“3. Non-life insurance businesses and foreign branches shall spend a maximum amount of 50% of insurance commission of insurance contracts exploited in the fiscal year on agent commendation and agent financial aid. For health insurance operations, a maximum amount of 100% of insurance commission of health insurance contracts exploited in the fiscal year shall be spent on agent commendation and agent financial aid”.

6.To amend and supplement Clause 1, Article 23 as follows:

“1. Revenues from insurance brokerage activities:

Collection of insurance brokerage commissions: Insurance brokerage businesses shall account insurance brokerage commissions and revenues corresponding to the insurance premium and the time limit for accounting revenues of insurance businesses and foreign branches in accordance with Points 1.1, 1.2 and 1.3, Clause 1, Article 21 of this Circular.

For payable amounts recorded as a decrease in revenues such as insurance brokerage commissions decrease, refund of insurance brokerage commissions: accounting into a decrease in income upon occurrence of business transactions with evidence for agreement from both parties, regardless of paid or unpaid amounts”.

7.To add Clause 1a after Clause 1, Article 23 as follows:

“1a. Revenues from the provision of insurance auxiliary services: Insurance brokerage businesses shall account into their revenue after finishing the service provision or after completing each part of the service provision, regardless such money amount has been paid or not”.

8.To amend and supplement Article 31 as follows:

“Article 31. Responsibility for making and sending reports

1.Insurance businesses, foreign branches and insurance brokerage businesses shall be responsible for making and sending financial statements, statistical reports, operation reports and reports on the use of insurance auxiliary services on a regular or an extraordinary basis; organizations providing insurance auxiliary services shall be responsible for making and sending reports on the provision of insurance auxiliary services on a regular or an extraordinary basis according to Articles 80 and 94 of the Decree No. 73/2016/ND-CP and Articles 32 and 33 of this Circular.

2.Insurance businesses, foreign branches, insurance brokerage businesses and organizations providing insurance auxiliary services shall be responsible for the accuracy and honesty of their financial statements, statistical reports, operation reports and reports on the use or provisions of insurance auxiliary services”.

9.To add Clauses 3a and 3b after Clause 3, Article 32 as follows:

“3a. Organizations providing insurance auxiliary services shall make and send annual reports on their provision of insurance auxiliary services and soft copies of such reports to the Ministry of Finance. To be specific:

- Annual report on the provision of insurance auxiliary services:Made according to the Form No. 1 - PTBH issued together with this Circular;

- Annual report on the list of individuals directly conducting insurance auxiliary activities:Made according to the Form No. 2 - PTBH issued together with this Circular;

- Annual report on the provision of cross-border insurance auxiliary services:Made according to the Form No. 32 - PTBH issued together with this Circular.

3b. Insurance businesses, foreign branches and insurance brokerage businesses using insurance auxiliary services shall make and send annual reports on their use of insurance auxiliary services and soft copies of such reports to the Ministry of Finance. To be specific:

Annual report on the use of insurance auxiliary services: Made according to the Form No. 4 - PTBH issued together with this Circular.”

10.To issue together with this Circular Appendix 01 on the template of the establishment and operation license, replacing Appendix 02 attached to the Circular No. 50/2017 /TT-BTC.

Article 2. To amend and supplement Clause 4, Article 19 of the Ministry of Finance’s Circular No. 105/2016/TT-BTC dated June 29, 2016, guiding offshore indirect investment activities of securities trading institutions, securities investment funds, securities investment companies and insurance businesses as follows:

“4. The reporting obligation of insurance businesses:

a) Within three (3) working days after having its offshore indirect investment dealing limit registration certified in writing by the State Bank of Vietnam, an insurance business shall send to the Ministry of Finance a report on its offshore indirect investment dealing limit enclosed with a copy of the State Bank of Vietnam’s written certification.

b) An insurance business shall send to the Ministry of Finance quarterly reports on its offshore indirect investment dealing activities, made according to the form provided in Appendix 14 attached to this Circular. To be specific:

- The period for closing data starts from the first day of the beginning month of a quarter to the 30^thor 31^thof the last month of the quarter of the reporting period;

- The period for sending a quarter’s report is thirty (30) days after the last day of a quarter.

c) Method of reporting:To send reports directly or by emails or via the reporting system of the Finance Ministry (in case where the Ministry of Finance s reporting system is launched)”.

Article 3. To amend and supplement Clause 1, Article 7 of the Ministry of Finance’s Circular No. 195/2014/TT-BTC dated December 17, 2014 on guiding the assessment and classification of insurance businesses as follows:

“1. Insurance businesses shall base on the situation, operation results, business administration, risk management and financial statements of the preceding fiscal year that have been certified by an independent audit firm, to report on the assessment and classification result and the application of measures mentioned in Article 6 of this Circular to the Ministry of Finance. To be specific:

- Time limit for submitting reports:Within ninety (90) days from the end of the year.

- Method of reporting:To send reports directly or by emails or via the reporting system of the Finance Ministry (in case where the Ministry of Finance s reporting system is launched)”.

Article 4. To amend and supplement a number of articles of the Ministry of Finance’s Circular No. 115/2014/TT-BTC dated August 20, 2014 on guiding the implementation of insurance policy specified in the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies:

1.To amend and supplement Clause 8, Article 13 as follows:

“8. On a quarterly and annual basis, the provincial People’s Committee shall be responsible for sending a detailed report on the support of insurance premium for fishing activities, made according to the form provided in Appendix 6 and Appendix 7 attached to this Circular to the Ministry of Finance and the Ministry of Agriculture and Rural Development. To be specific:

- Quarterly reports:The period for closing data starts from the first day of the beginning month of a quarter to the 30^thor 31^thof the last month of the quarter of the reporting period. The time limit for sending a quarterly report is within thirty (30) days after the last day of a quarter;

- Annual reports:The period for closing data starts from January 01 to December 31of the reporting year. The time limit for sending an annual report is within sixty (60) days after the last day of a year;

- Method of reporting:To send reports directly or by emails or via the reporting system of the Finance Ministry (in case where the Ministry of Finance s reporting system is launched).”

2.To amend Point a, Clause 8, Article 14 as follows:

“a) On a monthly and annual basis, an insurance business shall make and send reports on the implementation of ship crew insurance premiums, made according to the form provided in Appendix 8 and reports on the implementation of insurance premiums of ship hulls, equipment and fishing gears on board, made according to the form provided in Appendix 9 attached to this Circular to the Ministry of Finance. To be specific:

- Monthly reports:The period for closing data starts from the first day to the last day of the reporting month. The time limit for sending a monthly report is fifteen (15) days after the last day of a month;

- Annual reports:The period for closing data starts from January 01 to December 31of the reporting year. The time limit for sending an annual report is ninety (90) days after the last day of a year;

- Method of reporting:To send reports directly or by emails or via the reporting system of the Finance Ministry (in case where the Ministry of Finance s reporting system is launched).”

Article 5. The Ministry of Finance’s Circular No. 116/2014/TT-BTC dated August 20, 2014 on guiding a number of financial issues for insurance businesses carrying out insurance activities under the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies and the Ministry of Finance’s Circular No. 43/2016/TT-BTC dated March 03, 2016 on amending Article 5 of the Ministry of Finance’s Circular No. 116/2014/TT-BTC dated August 20, 2014 on guiding a number of financial issues for insurance businesses carrying out insurance activities under the Government’s Decree No. 67/2014/ND-CP dated July 07, 2014 on a number of fisheries development policies shall cease to have effect from January 01, 2021.

Article 6. Effect

1. This Circular takes effect on December 26, 2020.

2. Any difficulties and problems arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and settlement./.

* All Appendices are not translated herein.