Chapter V
MICROINSURANCE
Article 144. Characteristics of microinsurance products
A microinsurance product shall have the following basic characteristics:
1. It must be concise, easy to understand; needs to involve streamlined or simplified actuarial procedures; or requires no actuarial service.
2. It merely includes insurance benefits to meet basic demands for protection against life, health and property risks for participants in coverage plans that last no more than 05 years;
3. The sum insured per an insurance contract and annual costs of coverage for each insured person in a contract shall not exceed the maximum limit specified in the Government’s regulations.
Article 145. Building, design and development of microinsurance products
1. The State shall offer incentives, support and preferential treatment for offer of and involvement in microinsurance products through one or several measures specified in point a, b, d and e of clause 1 of Article 88 herein.
2. Entities providing microinsurance products must register and obtain the Ministry of Finance’s consent to the insurance premium calculation method and basis for microinsurance products.
3. The Government shall impose detailed regulations on measures specified in clause 1 of this Article provided that these regulations are aligned with developmental orientations and socio-economic conditions over periods of time; detailed regulations on documentation requirements, procedures and processes for registration for premium calculation methods and bases to be applied to microinsurance products.
4. The Minister of Finance shall impose detailed regulations on premium calculation methods and bases to be applied to microinsurance products.
Article 146. Entities providing microinsurance products
1. Entities providing microinsurance products, including:
a) Insurance companies, branches of foreign non-life insurance companies established and operated in Vietnam;
b) Mutuals providing microinsurance products that are established and operated in Vietnam.
2. The Government shall impose detailed regulations on procedures and processes for issuance, reissuance, revision, modification, withdrawal or revocation of business licenses or permits, or termination of services offered by mutuals providing microinsurance products.
3. The Ministry of Finance shall be vested with authority to issue, reissue, revise, modify, withdraw or revoke business licenses or permits, or terminate services offered by mutuals providing microinsurance products.
Article 147. Insurance companies, branches of foreign non-life insurance companies providing microinsurance products
1. Insurance companies and branches of non-life insurance companies can, on their own account, provide microinsurance products that are relevant to authorized insurance services:
a) directly or in person;
b) via insurance agents;
c) via any person who is a staff member or member of a socio-political organization, socio-professional organization or cooperative authorized by insurance companies or branches of foreign non-life insurance companies to provide counsels on or make arrangement for conclusion of insurance contracts on behalf of such organization or cooperative;
d) in other permissible ways.
2. Insurance companies and branches of non-life insurance companies must track, manage and account for revenues and expenses arising from provision of microinsurance products separately from those arising from services rendered by others.
Article 148. Mutuals providing microinsurance products
1. Mutuals providing microinsurance products can only provide microinsurance products for their own members. Members participating in insurance plans must be both owners of mutuals providing microinsurance products and policyholders.
2. Insurance contracts between mutuals providing microinsurance products and members participating in insurance plans must conform to general regulations on insurance contracts, life insurance contracts, health insurance contracts and property insurance contracts prescribed in Chapter II herein.
3. The Government shall impose detailed regulations on provision of microinsurance products by mutuals providing microinsurance products.
Article 149. Licensing conditions of mutuals providing microinsurance products
1. Conditions of a founding member, including:
a) If that member is a person, he/she must be a Vietnamese citizen having full civil capacity and a member of the entity proposing establishment of the mutual providing microinsurance products;
b) If that member is an entity, it must be the representative of that member as per law.
2. The amount of Vietnamese-dong contribution must not be less than the minimum limit under the Government’s regulations.
3. Any nominee for a Chairperson of the Managing Board, Director or General Director, legal representative or actuary of microinsurance products must meet the conditions and standards under the Government’s regulations.
4. A plan to offer microinsurance products that is in place must allow for the number of members and the network of the mutual to be established.
5. The available draft charter must be in line with business objectives of the mutual providing microinsurance products and conform to the Government’s regulations.
6. The available information technology system must be appropriate; can give support for or track activities of specific microinsurance contracts; can help in financial and accounting matters related to microinsurance.
Article 150. Principles of operation of mutuals providing microinsurance products
1. Mutuals providing microinsurance service shall practise their financial autonomy and bear sole responsibility before law within the scope of property formed from rendering of microinsurance services.
2. Mutuals providing microinsurance products shall be responsible for managing and supervising performance; complying with regulations on financial regimes in order to ensure financial security, successful implementation of obligations and commitments to members participating in insurance, concerned entities and persons under law.
3. Mutuals providing microinsurance products shall be responsible for carrying out risk management practice in order to effectively control risks arising from offering microinsurance products.
4. All of profits earned from offering microinsurance products by mutuals providing microinsurance products can be accessible to serve the interest of members participating in insurance plans by means of reduction in insurance premiums, increase in insurance benefits of the insured, support for members and assistance in accomplishment of other objectives as per the charters of mutuals providing microinsurance products.
5. The Government shall impose detailed regulations on operation, organization, risk management, operations, disclosure of information, financial, accounting and financial reporting regimes of mutuals providing microinsurance products.
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