Chương VII Nghị định 46/2023/NĐ-CP: Nghiệp vụ bảo hiểm liên kết đầu tư và bảo hiểm hưu trí

Chapter VII

INVESTMENT-LINKED INSURANCE AND RETIREMENT INSURANCE

Section 1. GENERAL PROVISIONS

Article 97. General principles

1. During the course of operation of investment-linked insurance and retirement insurance, the insurer must ensure compliance with the following regulations:

a) Maintain a solvency margin higher than the minimum solvency margin:  VND 200 billion (for investment-linked insurance); VND 300 billion (for retirement insurance);

b) Operate an information technology system that meets the requirements of Clause 2 of this Article.

2. The information technology system of an insurer providing investment-linked insurance and retirement insurance must:

a) Monitor and manage in detail each transaction of the investment-linked insurance policy (for the investment-linked insurance ) and each retirement insurance account (for the retirement insurance);

b) Ensure up-to-date and accurate data on insurance policies between divisions in the enterprise; ensure the setting aside of technical reserves and recognition of revenue and expenses;

c) To roll out the unit-linked insurance, the information technology system must assist in checking information on account value and number of units of each unit-linked fund; compare the premium pending for allocation with the premium paid by the customer by the end of the fiscal year and the end of the policy year; track the details of the sale and purchase of units of the unit-linked insurance policy.

3. An insurer that rolls out investment-linked insurance and retirement insurance must ensure that the information on their operation of universal life-linked fund, voluntary retirement fund and unit-linked funds is updated transparently, clearly, and regularly updated on their website, at least containing:

a) Investment returns and announced investment interest rates of the universal life fund, voluntary retirement fund, and unit-linked funs in the last 5 consecutive years;

b) Selling price, purchase price of units of the unit-linked fund (hereinafter referred to as fund units); net asset value per unit of the unit-linked fund on the working day immediately following the valuation date (in case the insurer rolls out the unit-linked insurance product).

The insurer must ensure that information on the selling prices and purchase prices of units are kept and can be looked up on their website within 3 years.

4. The insurer must set up calculation tools and instructions so that customers can build their own insurance plans according to each insurance product provided on their website. The calculation tool must meet the following minimum requirements:

a) As for universal life insurance products: Customers can choose the basic insurance premium, the extra premium (if any) with at least 2 illustrated investment interest rates (including the guaranteed interest rate and the assumed interest rate selected by the policyholder), the expected premium payment term to assess the account value during the insurance policy term or for a minimum period of 20 years;

b) As for unit-linked insurance products:  Customers may choose the basic premium rate, extra premium (if any), expected premium payment term, expected interest rate, expected unit-link fund to evaluate the value of the account for a maximum period of 20 years;

c) As for retirement insurance products:  Customers may build an individual's retirement plan through the selection of input factors such as the illustrated investment interest rate, expected retirement benefits in the future, the expected premium payment period, the expected period of receiving periodic retirement benefits;

d) The expected interest rate used in the calculation tool does not exceed the maximum interest rate used in the sales materials of the respective investment-linked insurance product or retirement insurance product;

dd) The data illustrated in the calculation tool must clearly show the following minimum data:  benefits of the insurance policy; fees charged to customers and premiums for each policy year.

Enterprises must ensure compliance with this Clause within 1 year from the effective date of this Decree.

Article 98. Premiums of investment-linked insurance policies, retirement insurance policies

1. Premiums of investment-linked insurance policies, retirement insurance policies include:

a) Basic insurance premium as prescribed in Clause 2 of this Article;

b) Additional insurance premiums as prescribed in Clause 3 of this Article.

2. Basic premium:

a) Basic premium is the premium determined based on the sum insured chosen by the customer and specified in the investment-linked insurance policy, the retirement insurance policy. The basic premium is paid periodically or once as agreed in the insurance policy;

b) The compulsory payment period for an investment-linked insurance policy with periodic basic premiums shall not exceed 4 years. During the compulsory payment period, the insurer must ensure that the investment-linked insurance policy is not lapsed if the customer has fully paid the basic premium and there is no withdrawal from the account.

3. Extra premium:

a) In addition to the basic insurance premium, the policyholder may pay an extra premium to invest in the universal life fund (for universal life insurance product) or to purchase units (for unit-linked insurance product) or to invest in a voluntary retirement fund (for retirement insurance product);

b) As for investment-linked insurance policies, in each policy year, the total extra premiums paid must not exceed 5 times the annual basic premium rate of the current policy year (for regular premium policy) or does not exceed the basic premium (for single premium policy).

Article 99. Fees charged to the policyholder

1. Fees charged to the policyholder include:

a) Initial fee: used to cover expenses related to the use of insurance policies, capital costs of the insurer. The initial fee is deducted as a percentage (%) of the premium when the policyholder pays the premium. The premium after deducting the initial fee is the part that is invested and allocated to the investment-linked fund (for investment-linked insurance policy), voluntary retirement fund (for retirement insurance policy) within 30 days from the date the insurer receives the premium;

b) Policy management fee: used to cover costs related to maintaining the insurance policy and providing information related to the insurance policy for the insurance buyer. Policy management fee is deducted from the account value of the policyholder;

c) Risk fee: used to pay death and disability benefits as committed in the insurance policy. Risk fee is deducted from the account value of the policyholder;

d) Fund management fee: used to pay for investment, asset valuation, fund supervision and management. The fund management fee is determined as a percentage (%) of the net asset value of the investment-linked fund (for investment-linked insurance policy), the voluntary retirement fund (for the retirement insurance policy). Fund management fee is deducted before determining investment returns of investment-linked fund (for investment-linked insurance policy), voluntary retirement fund (for retirement insurance policy);

dd) Early termination fee (applicable to investment-linked insurance product): used to cover reasonable expenses related to the policyholder's termination of the insurance policy early. Early termination fee is deducted from the account value of the policyholder;

e) Unit-linked fund conversion fee (applicable to unit-linked insurance product): is the fee charged to the policyholder when converting investment assets between unit-linked funds;

g) Retirement insurance account transfer fee (applicable to retirement insurance product): is a fee that a policyholder must pay to the current insurer when transferring their retirement insurance account to a new insurer.

2. The insurer is responsible for calculating fees charged to the policyholder in an accurate, fair, and reasonable manner, in accordance with the method and basis of charging fees for products registered with the Ministry of Finance.

3. The fees charged to the policyholder must be clearly stated in the insurance policy. During the performance of the policy, in case the insurer changes the fees or rates of fees applicable to the policyholder, the insurer is responsible for notifying the policyholder in writing at least 3 months before the official date of change. The fee or rate of fee to be changed must not exceed the maximum limit agreed in the insurance policy.

Article 100. Fund management companies

1. An insurer that rolls out universal life insurance products, retirement insurance products is entitled to manage and invest assets of the universal life fund, voluntary retirement fund on its own initiative, or entrust a fund management company to invest assets of the universal life fund, the voluntary retirement fund, or engage a fund management company to manage the portfolio of the assets of the universal life fund, the voluntary retirement fund.

2. An insurer that rolls out unit-linked insurance products shall entrust a fund management company that has experience in managing member funds or open-ended funds to invest in assets from unit-linked funds.

3. Entrusted assets are registered as owned by the insurer and deposited in the depository account of the insurer. The fund management company must separately manage investment assets from the investment-linked fund, the voluntary retirement fund of the insurer from other funds of the insurer and other customers. The fund management company may not use the assets of the investment-linked fund or voluntary retirement fund to perform any transaction or purpose not specified in the entrustment contract of the insurer.

4. When acting as a trustee to invest assets from unit-linked funds, the fund management company shall, at least weekly, or more frequently as agreed in the entrustment contract and before the next valuation date, provide information and value of investment assets for the insurer. The fund management company shall coordinate with the custodian bank and insurer to evaluate the net asset value of the unit-linked fund and the net asset value per fund unit on a periodic basis, and report on the investment portfolio, valuation, and performance of the unit-linked fund.

The insurer shall compare the investments of the fund management company and the depository account at the bank. The insurer must ensure the consistency of data specified at points a and b of this clause on the valuation date:

a) The total value of the insurance premium allocated to the unit-linked fund (the number of fund units of the policyholder on the valuation date multiplied by the buying price of the fund unit) and the value of the owner's contribution in the unit-linked fund (the number of fund units of the owner on the valuation date multiplied by buying price of the fund units);

b) Net asset value of the unit-linked fund.

5. When acting as a trustee or managing the portfolio of assets of the voluntary retirement fund, the fund management company must have at least 3 employees with at least 3 years of experience in managing retirement funds or insurance policyholder fund or investment portfolio management experience with an average investment term of more than 5 years. These employees must have a fund management practice certificate issued by the State Securities Commission or be a member of the Chartered Financial Analysts (CFA) or obtain a bachelor’s degree, master’s degree, or doctorate degree in finance or investment.

6. The fund management company is held accountable for any errors or losses caused by mispricing under the insurer's entrustment contract for unit-linked fund management, or for losses caused by the trust or portfolio management of the assets of the voluntary retirement fund, the universal mutual fund.

Section 2. INVESTMENT-LINKED INSURANCE

Subsection 1. CHARACTERISTICS AND BENEFITS OF INVESTMENT-LINKED INSURANCE

Article 101. Characteristics of investment-linked insurance

1. Investment-linked insurance includes universal life insurance and unit-linked insurance.

2. Insurance products in the investment-linked insurance have the following characteristics:

a) Benefits of an investment-linked insurance policy are separated between death and disability benefits and investment benefits. A policyholder cannot choose to participate in the investment benefits of an investment-linked insurance policy without also participating in the death and disability benefits;

b) The premium structure is separated between the investment fee and the initial fee as prescribed at Point a, Clause 1, Article 99 of this Decree;

c) The policyholder is entitled to all investment returns from the investment fee after deducting the fees specified at Points b, c and d, Clause 1, Article 99 of this Decree;

d) The policyholder has the flexibility to determine the premium and sum insured in accordance with the terms of the insurance policy.

3. The minimum terms of an investment-linked insurance policy with regular and single premium plan are respectively 10 years and 5 years.

Article 102. Benefits of investment-linked insurance policies

1. Benefits of an investment-linked insurance policy include:

a) Death and disability benefits specified in Clause 2 of this Article;

b) Investment benefits specified in Clause 3 of this Article;

c) Other bonus benefits (if any) to increase the account value in the investment-linked insurance policy.

2. Death and disability benefits:

a) Death and disability benefits include death benefits and total and permanent disability benefits;

b) Death and disability benefits must meet the minimum level as follows:

As for single premium policy: VND 50,000,000 or 125% of single premium, whichever is greater;

As for regular premium policy: VND 50,000,000 or 5 times annual basic premium, whichever is greater;

The insurer can provide death benefits with the sum insured lower than the minimum specified above for the insured from 60 years of age or older, but not less than VND 50,000,000.

3. Investment benefits:  is the entire investment return from the policyholder's investment fee after deducting the fund management fee as agreed in the insurance policy.

4. Within 2 years from the effective date of this Decree, the insurer may continue to provide benefits of investment-linked insurance policies as prescribed in the rules and terms of investment-linked insurance products which have been approved by the Ministry of Finance before the effective date of this Decree.

Subsection 2. UNIVERSAL LIFE INSURANCE

Article 103. Name and design of universal life insurance products

1. The name of the universal life insurance product must be consistent with the nature of the insurance product and contain the phrase “Sản phẩm bảo hiểm liên kết chung” (Universal life insurance product).

2. The account value of the universal life insurance policy is formed from the fee that is invested in the universal life fund and other benefits as agreed in the insurance policy.

3. The insurer must commit the minimum investment interest rate in the universal life insurance policy. In case the investment interest rate of the universal life fund is lower than the committed minimum interest rate, the insurer shall use the assets of the owner's fund to cover the difference between the actual interest rate earned on the investment, of each universal life account, and the minimum interest rate.

4. The cash surrender value of a universal life policy is the account value of that policy on the policy termination date minus the early termination fee.

Article 104. Establishment and management of universal life fund

1. An insurer must establish a universal life fund for all universal life insurance policies, ensuring that the assets formed from the universal life fund are separated from the owner’s fund and other policyholder funds.

2. The universal life fund was established before the first universal life insurance policy was signed and has a minimum amount of not less than VND 50 billion.

3. An insurer is entitled to an investment return corresponding to the amount contributed to the establishment of the universal life fund at the announced interest rate applicable to universal life insurance policyholders. The insurer may be refunded a part or the whole of their contributed amount if it still ensures that the total value of the universal life fund is not lower than VND 50 billion.

4. The policyholder is entitled to investment returns corresponding to the value of his/her account at the universal life fund in each fiscal year and not lower than the minimum committed interest rate specified in the insurance policy.

5. Universal life fund shall be managed and used for investment in accordance with the financial regime applicable to insurers.

Subsection 3. UNIT-LINKED INSURANCE

Article 105. Name and design of unit-linked insurance products

1. The name of the unit-linked insurance product must be consistent with the nature of the insurance product and contain the phrase “Sản phẩm bảo hiểm liên kết đơn vị” (Unit-linked insurance product).

2. The policyholder may invest fees in the unit-linked fund established by the insurer, enjoy all investment returns and bear all investment risks from the chosen unit-linked fund.

3. The account value of a unit-linked insurance policy is determined based on buying price of units of the unit-linked fund and the corresponding number of units on the valuation date.

4. The cash surrender value of the unit-linked insurance policy is equal to the account value of the unit-linked fund on the valuation date after the date on which the policyholder requests to terminate the policy minus the early termination fee.

5. As for a unit-linked insurance policy with single premium plan, the policyholder’s premium is only used to buy fund units with an investment proportion of not less than 60% of value of their total assets in the portfolio of bank deposits and other fixed-income securities.

Article 106. Establishment of a unit-linked fund

1. The insurer must ensure at least two unit-linked funds for each unit-linked insurance product. Each unit-linked fund must have separate investment policy, investment objectives and investment limits, which enables policyholders to tell the difference between unit-linked funds rolled out by the insurer.

2. The name of each unit-linked fund must be clear and consistent with their investment policies and objectives.

3. Before the first unit-linked insurance policy is signed, the insurer must use part of the owner's fund to form the unit-linked fund's assets in accordance with the investment policy, investment objectives, and investment limits of each unit-linked fund, and must ensure that the value of each unit-linked fund is not less than VND 50 billion.

4. If an insurer adds a new unit-linked fund that is managed directly by the fund management company, the enterprise must ensure that the value of each unit-linked fund is not less than VND 50 billion.

5. The insurer is entitled to investment returns corresponding to their amount contributed to the unit-linked fund.  The insurer may be refunded a part or the whole of their contributed amount if it still ensures that the total value of the unit-linked fund is greater than VND 50 billion. If the net asset value of the fund falls below VND 30 billion on the valuation date, the insurer must top up the fund using the owner's fund to ensure that the net asset value is not lower than VND 30 billion within 30 days.

6. An insurer must ensure that the assets formed from the unit-linked fund are separated from the owner’s fund and other policyholder funds. In case an insurer establishes unit-linked funds that are directly managed by the fund management company, the insurer must ensure the assets formed from these unit-linked funds must be separated from other unit-linked funds.

7. In all cases, the unit-linked fund must be managed and used for investment in accordance with the investment policies, investment objectives, and investment limits specified in Article 108 of this Decree.

Article 107. Investment objectives of unit-linked funds

1. The investment objectives of unit-linked funds must be clear and detailed so that policyholders can make an informed assessment of their current state of operation and the risks that they face.

2. The investment objectives of unit-linked funds must be disclosed in a clear and comprehensive manner in brochures and insurance policies.

Article 108. Investment limits of unit-linked funds

1. The investment limits in each portfolio of investment assets of the unit-linked fund must be consistent with the investment policy and investment objectives specified in the method and basis of charging premiums of the products registered with Ministry of Finance and in compliance with Clause 2 of this Article. The investment in assets of the unit-linked fund must comply with the general regulations on investment principles in Clause 2, Article 99 of the Law on Insurance Business No. 08/2022/QH15.

2. Investment limits of each unit-linked fund:

a) Government debt instruments: No restriction;

b) Actively traded securities of issuers:  up to 100% of the total asset value of the unit-linked fund;

c) Actively traded securities of an insurer:  up to 10% of the total value of the actively traded securities of that organization and up to 20% of the total asset value of the unit-linked fund;

d) Direct investment in real estate, gold, silver, precious metals, gems: 0% of the total asset value of the unit-linked fund;

dd) Investment in companies in the same group of companies with ownership relations in the following cases: parent company, subsidiary company; companies owning more than 35% of each other's shares and contributed capital; group of subsidiaries having the same parent company: up to 30% of the total asset value of the unit-linked fund;

e) Investment in securities investment funds, shares of securities investment companies established and operating in Vietnam: 0% of the total asset value of the unit-linked fund.

3. The investment limits of the unit-linked fund may differ from those specified  Clauses 1 and 2 of this Article as a result of an increase or decrease in the value of the investment assets, legal payments of the unit-linked fund,  and the full or partial division, consolidation, acquisition of issuers. In such circumstances, the unit-linked fund is not allowed to invest in assets with deviations. Within 3 months from the date of deviation, the insurer must request the fund management company to adjust the investment portfolio to meet the investment limits’ requirements specified in Clauses 1 and 2 of this Article.

The insurer must notify Ministry of Finance in writing of, and disclose information to the policyholder about the causes of the above deviations, the remedial measures taken and the effectiveness of the remedy.

4. If the deviation is caused by the insurer or fund management company's failure to comply with the investment limits specified in Clauses 1 and 2 of this Article or the investment policies and investment objectives of the unit-linked fund, which are specified in the method, the basis on which premiums are charged, the insurer must request the fund management company to readjust the investment portfolio within 15 days from the date of deviation.

5. The insurer shall compensate for damage caused to the policyholder and the unit-linked fund in the following cases:

a) They fail to comply with the investment policies and investment objectives specified in the premium-charging method and basis registered with the Ministry of Finance;

b) Investment in restricted assets or investment in excess of investment limits as prescribed in Clauses 1 and 2 of this Article.

6. The amount of compensation for the policyholder and the unit-linked fund is determined on the basis of the actual damage incurred. Where investment activities under Clause 5 of this Article generate profits, the insurer must account all profits to the unit-linked fund.

7. The investment limits must be disclosed in a clear and comprehensive manner in brochures and insurance policies.

Article 109. Valuation of unit-linked funds

1. The insurer must value the assets in the unit-linked fund's portfolio at least once a week, at market value, or fair value (if market value is unavailable). The insurer must specify the valuation date in the rules and terms of insurance products in order to buy and sell fund units. If the valuation date coincides with a holiday or day off as prescribed by law, the insurer shall determine the valuation date on the next working day.

2. The determination of the net asset value of the unit-linked fund must comply with the principles of determining the net asset value of the open-ended fund in accordance with applicable laws.

3. The custodian bank, which is legally established and operating in Vietnam, approves the determination of the net asset value of the unit-linked fund.

4. Insurers, fund management companies, and custodian banks must have a mechanism and process in place for comparing, reviewing, examining, and supervising the net asset valuation to ensure that it is accurately and suitably calculated.

5. The insurer must take full responsibility in case of misvaluing of fund units, and must compensate policyholders and the unit-linked fund for deviations arising from the purchase and sale of these fund units because the net asset value of the fund is misvalued with the deviation level as follows:

a) Reach at least 0.5% of the net asset value, for a unit-linked fund that invests in stocks. The unit-linked fund invests in stocks no less than 70% of the total asset value in the stock portfolio;

b) Reach at least 0.75% of the net asset value, for a unit-linked fund that invests in bonds. The unit-linked fund invests in stocks no less than 70% of the total asset value in the bond portfolio;

c) Reach at least 1.00% of net asset value for other unit-linked funds of the insurer.

6. In case the net asset value per fund unit is misvalued with the error reaching the margins specified in Clause 5 of this Article, the insurer shall make a plan to remedy and compensate in the following order:

a) Re-determine the net asset value of the unit-linked fund on each trading day during the time the fund is misvalued;

b) Determine compensations for the fund and compensations for policyholders from mispricing the fund's assets on each trading day. The insurer is not required to compensate the policyholders for deviations of less than VND 100,000, but the entire amount corresponding to the deviation value of less than VND 100,000 must be put into the fund.

7. The amount of compensation for the policyholder and the unit-linked fund from the purchase and sale of fund units in case of misvaluing the fund units is determined as follows:

a) In case the fund is undervalued, the compensation amount for the policyholder and the unit-linked fund is determined as follows:

If the premium is allocated to purchase fund units before the time the fund is misvalued and the units are sold during the period when the fund is misvalued: The amount of compensation to the policyholder is determined based on the margin of error and the number of fund units sold by the policyholder;

If the premium is allocated to purchase fund units during the period when the fund is misvalued and continues to be held after the period when the fund is misvalued: The insurer shall compensate the unit-linked fund. The compensation amount is determined based on the margin of error and the number of fund units that the policyholder has purchased and continues to hold after the misvaluing period.

b) In case the fund is overvalued, the compensation amount for the policyholder and the unit-linked fund is determined as follows:

If the premium is allocated to purchase fund units before the time the fund is misvalued and the units are sold during the period when the fund is misvalued: The insurer shall compensate the unit-linked fund. The compensation amount is determined based on the margin of error and the number of fund units that the policyholder has sold during the mispricing period;

If the premium is allocated to purchase fund units during the period when the fund is misvalued and continues to be held after the period when the fund is misvalued: The compensation amount is determined based on the margin of error and the number of fund units that the policyholder has purchased and continues to hold after the mispricing period.

c) All expenses for compensation to the policyholder and the unit-linked fund must not be accounted into the expenses of the unit-linked fund of the insurer.

8. Within 7 working days from the date on which the error is found, the insurer must report to the Ministry of Finance the plan to remedy the error when valuing the fund units, the plan to compensate for damage to the fund and the policyholders. The plan must clearly state the cause of the incident, the time when the fund was misvalued, the extent of the fund's damage, the extent of the policyholder's damage, together with a list of the policyholders with impaired benefits to be compensated and compensation amount for each policyholder. Within 15 working days from the date of the report to the Ministry of Finance, the insurer must pay compensation for the damage incurred to the policyholders and the unit-linked fund.

Article 110. Determination of selling and buying prices of fund units

1. Selling price is the price of one fund unit when the insurer sells it to the policyholder on the valuation date.

2. Buying price is the price of one fund unit when the insurer buys it from the policyholder on the valuation date.

3. Fund unit is the asset of the unit-linked fund which is divided into units of equal value.

4. The selling price and buying price of fund units are determined based on the net asset value of each fund unit on the valuation date immediately following the day when the insurer receives request to buy or sell fund units. The difference between the selling price and the buying price of a fund unit must not exceed 5% of the selling price.

5. Net asset value of each fund unit is equal to the total value of assets in the unit-linked fund minus related liabilities divided by the total number of fund units.

Article 111. Buying and selling fund units

1. The policyholder has the right to buy more fund units from or redeem fund units to the insurer.

2. The policyholder may buy additional fund units when the following requirements are satisfied:

a) The insurance policy of the policyholder is still valid and contains the amount for additional purchase;

b) There is a request to buy more fund units according to the insurer's form, specifying the amount of the sum they want to buy more fund units, the percentage of each unit-linked fund, and confirmation on the request to buy additional fund units.

3. The policyholder may redeem fund units when the following requirements are satisfied:

a) The insurance policy of the policyholder is still valid and the number of fund units to be redeemed meets the regulations on the minimum amount of the insurer for the policyholder’s redemption of fund units;

b) There is a request to redeem fund units according to the insurer's form, specifying the amount of the number of fund units to redeem, the percentage of each unit-linked fund to be deemed, or the sum to be withdrawn, and confirmation on the request to redeem fund units.

4. The insurer shall handle the request to buy more or redeem fund units on the next valuation date. The buying or selling price of fund units is determined according to Article 110 of this Decree.

5. The account value under the unit-linked insurance policy of the policyholder changes according to the request to buy more or redeem fund units, calculated from the time the insurer determines buying price or selling price and complete the purchase and sale of fund units at the request of the policyholder. The insurer must clearly specify the sale and purchase transactions from the unit-linked insurance policy.

6. The insurer is not allowed to refuse the policyholder’s request to buy more or redeem fund units when the policyholder has satisfied the requirements specified in Clauses 2 and 3 of this Article.

Article 112. Unit-linked fund investment council

1. The insurer must establish an Investment Council to conduct the following activities:

a) Approve the investment policies and procedures of each unit-linked fund on the most prudent basis to ensure the safety of the unit-linked fund's assets and in accordance with their investment objectives and strategies as disclosed to customers. Approve the valuation manual and reach an agreement to use the valuation manual when engaging more than one fund management company to manage the unit-linked fund. Any changes in regulations, policies, and investment procedures of each unit-linked fund must be approved by the Investment Council before they are implemented;

b) Decide to close the unit-linked fund and convert its assets into a new unit-linked fund with the same investment objectives; change the name of the unit-linked fund; split or merge existing fund units or stop valuing fund units and transactions related to insurance policies in exceptional cases specified in insurance policies to protect the interests of the policyholders;

c) Approve investment assets in accordance with the investment limits specified in Article 108 of this Decree;

d) Other tasks at the request of competent authorities and regulations of law.

2. The Investment Council is composed of at least three members, in which:

a) One member is an actuary of the insurer;

b) One member is an employee of the insurer, or the insurer’s parent company, or a fund management company which obtains a certificate of Chartered Financial Analysts (CFA) or a fund management practice certificate issued by State Securities Commission (SSC), or an equivalent professional degree, and have at least three years' experience in managing the operation of an open-ended fund or a unit-linked fund;

c) One member is a lawyer of the insurer, or the insurer’s parent company, who has professional qualifications in law on the field of investment or has at least five years of experience directly working in  insurance, finance or banking.

3. The Investment Council must meet quarterly and may hold ad-hoc meetings at the request of the insurer. Decisions of the Investment Council are passed by voting at in-person meetings, meetings via telephone, internet, and audio-visual media, or in the form of written opinions.

Article 113. Custodian bank for unit-linked funds

1. An insurer must engage a custodian bank to perform the following tasks:

a) The asset custody of unit-linked funds must comply with applicable regulations on the establishment and management of open-ended funds;

b) Supervise the asset management of unit-linked funds of the insurer, or the fund management company authorized by the insurer, in accordance with the investment limits, objectives, and investment policies, portfolio structure of the insurer, and regulations of applicable law at all times. If any violation against laws or investment trust contract is found, the custodian bank must report to the Ministry of Finance (the Department of Insurance Management and Supervision) without delay, and notify the fund management company within 24 hours since the detection, and require the corrective measure or remedial action to address the violation within the prescribed time limit;

c) Monitor the expenses of the fund to ensure that they are only paid from the fund's assets, in accordance with applicable law and the fund's investment objectives;

d) Collaborate with the insurer and fund management company to regularly review the net asset value, calculate the value of the unit-linked fund and the net asset value per fund unit, and ensure that these values are calculated correctly, accurately, and in accordance with the law;

dd) Monitor the implementation and evaluation of the outcomes of the consolidation, acquisition, dissolution, and liquidation of the unit-linked fund, in cases where the insurer is authorized to take these measures.

2. The assets of the unit-linked fund that are held by the custodian bank and registered in the name of the insurer are assets owned by the unit-linked fund, not by the custodian bank or the fund management company. The custodian bank may not use the assets of the unit-linked fund to pay or guarantee payment for its own debts or to a third party.

3. The custodian bank shall prepare and maintain documentation in both hard copy and electronic form for 10 years in order to confirm that the insurer and fund management company’s investment complies with the investment objectives of the unit-linked fund and regulations of law. These documents must be provided upon request in writing by the Ministry of Finance.

Section 3. RETIREMENT INSURANCE

Article 114. Characteristics of retirement insurance

1. Retirement insurance includes:

a) Retirement insurance for each individual;

b) Retirement insurance for groups of employees (group-type retirement insurance); the policyholder is the employer; the employee will receive all benefits of the insurance policy after a certain period of time as agreed between the parties and recorded in the insurance policy.

2. Products in the retirement insurance have the following characteristics:

a) After the policyholder has paid the insurance premiums in full, the insured starts being paid retirement benefits when reaching the age agreed upon in the insurance policy, but not lower than the retirement age in accordance with regulations of law on retirement age;

b) The premium structure of the retirement insurance product is separated between the investment fee and the initial fee as prescribed at Point a, Clause 1, Article 99 of this Decree;

c) Each insured person under an individual-type policy or a group-type policy has a separate retirement insurance account as prescribed in Article 118 of this Decree.

Article 115. Basic insurance benefits of retirement insurance policies

1. An insurer may design their own retirement insurance products but must include periodic retirement benefits as prescribed in Clause 2 of this Article, and death and disability benefits as prescribed in Clause 3 of this Article.

2. As for periodical retirement benefits, the insurer must ensure that:

a) Retirement benefits are paid periodically until the death of the insured or for at least 10 years, depending on the terms of the insurance policy;

b) The insurer and the policyholder agree on the amount of retirement benefits each period, the number of periods to receive retirement benefits;

c) Calculating the accrued interest from the unpaid retirement benefits to the policyholder, but not lower than the committed minimum investment interest rate agreed upon in the insurance policy.

3. With regard to death and disability benefits, the insurer must ensure that the policyholder is entitled to these benefits while the insurance premiums are still being paid, and the insurer may continue to provide these benefits while the insurance benefits are being paid, depending on the terms of the insurance policy. Death and disability benefits include at least the following benefits:

a) Funeral allowance benefits:

Upon receipt of a claim for payment of death benefits, the insurer must immediately pay the beneficiary(ies) the funeral allowance agreed upon in the insurance policy, regardless of whether the policyholder had sufficient coverage.

b) Death benefits and total permanent disability benefits:

If the insured person's death or total permanent disability is covered by the insurance policy and occurs within the prescribed time limit, the insurer must pay the beneficiary the sum insured agreed upon in the insurance policy;

The policyholder is entitled to choose the sum insured when entering into the insurance policy and may adjust the sum insured during the effective period of the insurance policy as agreed in the insurance policy.

Article 116. Establishment and management of voluntary retirement funds

1. When rolling out a retirement insurance, the insurer must set up a voluntary retirement fund, and then keep separate bookkeeping of revenues, expenses, assets, and capital sources of the voluntary retirement fund from other policyholder’s funds and owner’s funds.

2. The voluntary retirement fund is funded by the insurance premiums paid by policyholders and the contributions made by life insurers as prescribed in clause 3 hereof.

3. When setting up a voluntary retirement fund, the insurer must contribute at least 200 billion Vietnam dong from its owner's fund to the fund and must maintain at least 200 billion Vietnam dong in the fund at all times. The insurer is entitled to a portion of investment interest for this contribution corresponding to the announced investment interest rate of the voluntary retirement fund.

4. The investment of voluntary retirement funds is subject to the investment limits prescribed in Article 117 of this Decree.

5. The insurer may not use assets of the voluntary retirement fund to pay fines for violations of the law, debts, and transactions unrelated to the voluntary retirement fund.

6. All assets formed from the premiums allocated to the policyholders of the voluntary retirement fund belong to insured persons.

Article 117. Investment limits of voluntary retirement funds

1. The investment limits in each portfolio of investment assets of the voluntary retirement fund must be consistent with the investment policy and investment objectives specified in the premium-charging method and basis registered with Ministry of Finance and in compliance with Clause 2 of this Article. The investment in assets of the voluntary retirement fund must comply with the general regulations on investment principles in Clause 2, Article 99 of the Law on Insurance Business No. 08/2022/QH15.

2. Investment limits of voluntary retirement fund:

a) Deposit at a credit institution: not limited to but up to 20% of the total value of assets invested by the voluntary retirement fund in a credit institution;

b) Government debt instruments: not limited to but at least 40% of the total value of assets invested by the voluntary retirement fund;

c) Government-guaranteed bonds, local government bonds, secured corporate bonds: up to 25% of the total value of assets invested by the voluntary retirement fund;

d) Stocks (except shares of securities companies, finance companies, finance leasing companies), unsecured corporate bonds, capital contribution to other enterprises: up to 20% of the total value of assets invested by the voluntary retirement fund;

dd) Investment in issued shares of an enterprise, corporate bonds: up to 5% of the volume of each issuance and up to 5% of the total value of investment assets of the voluntary retirement fund;

e) Investment assets other than those specified at Points a, b, c, d and dd of this Clause: 0% of the total value of assets invested by the voluntary retirement fund.

Article 118. Retirement insurance accounts

1. The retirement insurance account is a separate account for each insured person that holds the accumulated premiums paid after deducting the initial fee. The account is opened, monitored, and managed by the insurer.

2. The insurer must commit the minimum investment interest rate in the retirement insurance account in the insurance policy. At the end of each fiscal year, the insurer is responsible for announcing the investment interest rate and accumulated account value up to that time. If the investment returns of the retirement insurance account are lower than the committed interest rate, the insurer must use the assets of its owner’s fund to cover any shortfalls. In case the insurance policy has an agreement on the accumulation of insurance benefits into the value of the retirement insurance account, these benefits will still be calculated with accrued interest as prescribed at Point c, Clause 2, Article 115 of this Decree.

3. The insured person may not withdraw from the retirement insurance account before the maturity date when he/she reaches the retirement age, as specified in the insurance policy, except for the case specified in Article 119 of this Decree.

Article 119. Early withdrawal from retirement insurance accounts

The insured is entitled to request for early withdrawal and the insurer is responsible for paying part or all of the value of the retirement insurance account in the following cases:

1. The insured person has a degree of impairment from 61% or more as per applicable law.

2. The insured suffers from a fatal disease as prescribed by law.

3. The insured person is a Vietnamese citizen who is legally permitted to reside in a foreign country by a competent authority.

4. The insured may withdraw from the retirement account early to pay off their personal loans (except for consumer loans) at a bank, provided that the loan contract must remain valid for at least 24 months before the maturity date of the retirement account.

Article 120. Transfer of retirement insurance accounts

1. If the insured person terminates their employment contract or loses their job and is no longer a member of the group-type policy, they have the following options:

a) They transfer the retirement insurance account from the group-type policy to the individual-type policy with the corresponding value at the same insurer; or

b) They transfer their retirement insurance account to a group-type policy of the new enterprise. The new group-type policy may be at the same insurer, or another insurer, depending on the type of the new enterprise.

2. In case of transfer of the retirement insurance account in the same insurer, based on the written confirmation of premium payment by the policyholder and the written request for account transfer of the insured, the insurer shall transfer the account at requested. The insurer is prohibited from charging a fee for transferring a retirement insurance account.

3. In case of switching to a group-type policy at a new insurer, within five working days of receiving the following: a request to transfer the retirement insurance account, and documentation showing that the beneficiary is no longer a member of the group-type policy of the old enterprise and is now a member of group-type policy of the new enterprise, the insurer must transfer the entire value of that account, up to the request date, to the new insurer, after deducting the account transfer fee (if any).

4. The transferred retirement account value will accrue according to the agreement in the new group-type policy.

5. The new insurer is prohibited from charging an initial fee for the value of the transferred retirement insurance account.

Article 121. Suspension of retirement insurance accounts

1. The policyholder and the insurer may agree to suspend the retirement insurance account temporarily if the policyholder cannot afford the premium.

2. During the suspension of the retirement insurance account, the insurer is prohibited from charging any fee to the policyholder. The value of the retirement insurance account is accumulated according to the investment rate announced annually by the insurer as agreed in the insurance policy. The insurer is not obliged to pay out benefits during the suspension period, except for two cases: periodic retirement benefits when the insured reaches a certain age; or death and disability benefits if the insured dies or has total permanent disability (with the entire value of the accumulated retirement insurance account).

3. The policyholder may request the insurer to revalidate the suspended retirement insurance account and resume paying the premium.