NATIONAL ASSEMBLY     SOCIALIST REPUBLIC OF VIETNAM

Law No. 24120001QH 10     Independence - Freedom - Happiness

NATIONAL ASSEMBLY

OF THE SOCIALIST REPUBLIC OF VIETKAM

The Eighth Session, Tenth Legislature

(From 14 ~November 2000 to 09 December 2000)

LAW ON INSURANCE BUSINESS

In order to protect the legitimate rights and interests of the organizations and individuals participating in insurance transactions; to accelerate insurance business; help to promote and maintain a sustainable socio-economic development, stabilize the people's living standards; and strengthen the effectiveness of State administration of insurance business; Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam; This Law sets forth provisions concerning insurance business,

Chapter I

GENERAL PROVISIONS

Article 1. Scope of application

1. This Law shall govern the organization and operation of insurance business and determine the rights and obligations of organizations and individuals participating in insurance transactions.

2. This Law shall not apply to social security, health insurance, deposit insurance and other types of insurance which are provided by the State for non-commercial purpose.

Article 2. Application of the Law on Insurance Business, relevant laws and international treaties and practices

1. The organization and conduct of insurance business in the territories of the Socialist Republic of Vietnam shall be subject to provisions of this Law and other relevant laws and regulations.

2. In the event where provisions of international treaties, in which the Socialist Republic of Vietnam is a signatory or a participant, are different from those contained in this Law, the provisions of that international treaties shall prevail.

3. Parties to insurance transactions may agree to apply international practices, provided these practices are not inconsistent with the Vietnamese laws.

Article 3. Interpretation of terms and definitions In this Law, the following terms shall have the respective meanings ascribed to them hereunder:

I. "Insurance Business" means profit-oriented operations carried out by an insurance enterprise whereby the insurance enterprise assumes risks exposed by the insured in return for insurance premium paid by an insurance buyer to secure the former's indemnity the insured or pay insurance benefits to the beneficiary upon occurrence of the insured event.

2. "Reinsurance Business" means profit-oriented operations carried out by an insurance enterprise whereby such an insurance enterprise accepts an amount of premium paid by another insurance enterprise in return for a commitment to provide compensation in respect of the liabilities against which the former agrees to cover.

3. 'Insurance agent operation" mean introducing. offering and selling insurance, arranging and placing for the conclusion of insurance contracts and other activities relating to the performance of the insurance contracts under authorization of the insurance enterprise;

4. "Insurance broker's operation" mean advising or providing information to the insurance buyer, the (potential) insurance enterprise on specific classes of insurance, terms and conditions of insurance, rates of premium, and other activities relating to the negotiation, arraignment and performance of insurance contracts at the request of the insurance buyer;

5. "Insurance enterprise" means an enterprise which is established, organized and active under provisions of this Law and other applicable laws and regulations to conduct insurance business and reinsurance business.

6. “Insurance buyer" means any organization or individual entering into an insurance contract with an insurance enterprise and paying premiums. The insurance buyer may also be concurrently the insured or the beneficiary.

7. 'Insured" means any organization or individual whose property, civil liabilities or life are covered under insurance contracts. The insured may also be concurrently the beneficiary.

8, "Beneficiary” means any organization or an individual who is named by the insurance buyer to receive insurance benefits under an insurance of persons contract.

9. "Insurable interest" means the ownership, right to posses, right to use, and proprietary rights; rights or obligations to take care of or to foster the subject matters of insurance. .

10. "insured event" means any objective event mutually agreed by the parties concerned or prescribed by the law and upon the occurrence of which, the insurance enterprise shall pay insurance benefits to the beneficiary or pay indemnity to the insured.

11. "Premium" means a sum or money payable to the insurance enterprise by the insurance buyer at such a time and in such a manner as may be agreed upon in the insurance contracts.

12. "Life insurance" means a class of insurance that is provided against the life or death of an insured.

13. "Pure endowment insurance" means a class of insurance that is provided in the case where the insured survives until a specific point of time. whereby the insurance enterprise shall pay insurance benefits to the beneficiary if the insured lives until the point of time agreed upon in the insurance contract.

14. "Term insurance" means a class of insurance that is provided in case where the insured dies within a specific period of time, whereby the insurance enterprise is obliged to pay insurance benefits to the beneficiary if the insured dies within a period of time as agreed upon the insurance contract.

15. "Endowment" means a class of insurance which combines the pure endowment insurance and term insurance.

16. "Whole life insurance” means a class of insurance covering the death of the insured which hay occurs at any time during his life.

17. "Annuity" means a class of insurance that is provided in case where the insured services until a specific point of time as agreed upon in the insurance contract, after that specific point of time, the insurance enterprise is obliged to pay insurance benefits to the beneficiary on a periodic basis as agreed upon in the insurance contract.

18. "Non-life insurance" means a line of insurance comprising property, civil liability and other classes of insurance other than life insurance.

Article 4. State guarantees for insurance business

1. The State shall protect the legitimate rights and interests of organizations and individuals participating in insurance transactions and organizations which engage in insurance business.

2. The State shall invest capital and other resources for State owned insurance enterprise to bolster its development and secure a dominant role in the insurance market.

3. The State shall formulate and issue appropriate policies to ensure a sound development of the insurance market in Vietnam, issuing other preferential policies in favor of insurance products which are designed to serve the attainment of the country's socio-economic development objectives, especially agricultural, forestry or fishery promotion programs.

Article 5. International cooperation in insurance business

The State shall maintain a uniform administration, issue the policies to broaden international co-operation in insurance business on the basis of respect to the independence, sovereignty, equality and mutual benefit toward a multi lateralization and diversification; encourage foreign insurance enterprises and foreign insurance brokers to attract foreign investors investing their capital in Vietnam. mobilize foreign investment capital and reinvesting the profits

generated from their insurance business in Vietnam in support of the country's socio-economic development; facilitating the domestic insurance enterprise and insurance brokerage enterprise to strengthen co-operation with foreign partners to enhance the efficiency of insurance business.

Article 6. Fundamental principles of insurance business

1. Organizations or individuals having demands for insurance may only buy insurance from insurance enterprise authorized to operate in Vietnam.

2. Insurance enterprise must satisfy all financial requirements to fulfill its commitment to the insurance buyers.

Article 7. Classes of insurance

1. Life Insurance shall include:

a) Whole life insurance:

b) Pure endowment insurance;

c) Term insurance;

d) Endowment insurance;

dd) Annuity;

e) Other classes of life insurance as may be prescribed by the Government from time to time.

2. Non-life insurance shall include:

a) Health insurance and personal accident insurance:

b) Property insurance and casually insurance;

c) Transit insurance pertaining to land, sea, rivers, railways and air;

d) Aviation insurance;

dd) Motor insurance;

e) Fire and explosion insurance;

g) Hull insurance and ship-owner's civil liability insurance;

h) Public liability insurance;

i) Credit insurance and financial risk insurance;

k) Business interruption insurance;

1) Agricultural insurance;

m) Other classes of non-life insurance as may be prescribed by the

Government from time to time.

3. The Minister of Finance shall make a detailed list of insurance products.

Article 8. Compulsory Insurance

1. Compulsory insurance is a line of insurance for which the laws stipulates the terms and conditions, premium rates and the minimum sum insured that have a binding effect on both the insurance buyer and the insurance enterprise. Compulsory insurance shall only be applied to certain lines of insurance business for the purpose of protecting public interests and social order.

2. Compulsory insurance shall include:

a) Motor owner's civil liability insurance; aviation carrier's civil liability insurance to passenger;

b) Professional indemnity insurance against risks arising from provision of legal consulting services

c) Professional indemnity insurance for insurance brokers;

d) Fire and explosion insurance

3. The Government shall, depending on the demands for socio-economic development from time to time, submit to the Standing Committee of the National Assembly for its introduction of other lines of compulsory insurance.

Article 9. Reinsurance

1. Insurance enterprise may cede to other insurance enterprise including foreign insurance enterprise.

2. In case of overseas cession, insurance enterprise shall cedes part of the: direct risks insured to a domestic enterprise engaging in reinsurance business as determined by the Government.

Article 10. Co-operation and competition in insurance business

I. Insurance enterprise. insurance broker and insurance agent may cooperate and engage in fair and lawful competition.

2. The following acts shall be strictly forbidden:

a) Providing inaccurate information or falsely advertising on the scope of cover, terms and conditions of insurance causing damages to the legitimate rights and interests of insurance buyers;

2.) winning customers by preventing. inducing, perverting, bribing or intimidating employees or customers of other insurance enterprise. insurance broker and insurance agent:

c) Conducting illegal sale promotion;

d) Carrying out other illegal competitions

Article 11. Rights to joint socio-professional associations in insurance industry

Insurance enterprise. insurance brokerage enterprise and insurance agent may join socio-professional organization for the purpose of developing the insurance market and protecting legitimate rights and interests of members in accordance with the relevant laws.

Chapter II

INSURANCE CONTRACTS

Section One

GENERAL PROVISLOXS ON IINSURANCE CONTRACTS

Article 12. Insurance contracts

1. An insurance contract is an agreement between the insurance buyer and the insurance enterprise whereby the insurance buyer is obliged to pay premiums while the insurance enterprise is undertaken to pay insurance benefits to the beneficiary or indemnity t o the insured upon the occurrence of an insured event.

2. Insurance contracts shall comprise the following categories:

a) Contracts of insurance of persons:

b) Property insurance contracts;

c) Civil liability insurance contracts

3. Marine insurance contracts shall be subject to the marine Code. In respect of the issues which are not provided for in the Marine Code, relevant provisions of this Law shall be applied.

4. Issues relating to insurance contracts which are not prescribed in this chapter shall be subject to the Civil Code and other relevant provisions of the law.

Article 13. Contents of insurance contracts

1. An insurance contract shall contain the following particulars:

a) Names and addresses of the insurance enterprise, the insurance buyer, the insured, or the beneficiary;

b) Subject matter of the insurance;

c} Sum insured, value of the insured property in respect of property Insurance;

d) Scope of the cover, terms and conditions of insurance;

dd) Exclusions;

e) Duration of cover;

g) Premium rate, mode of premium payment;

h) Time limit and methods of paying insurance benefits or indemnity;

i) Dispute settlement clause;

k) Day, month and year of concluding the contract.

2. Apart from the contents specified in clause 1 of this Article, an insurance contract may also include other details and particulars as may be mutually agreed upon by the parties concerned.

Article 14. Forms of insurance contracts

An insurance contract shall be made in writing.

Evidence of a concluded insurance contract shall comprise insurance certificates, insurance policies, telegrams, telexes, faxes and other instruments prescribed by the law.

Article 15. Commencement of the insurance enterprise's liabilities

Liabilities of an insurance enterprise shall commence from the point of time when an insurance contract is made or there is evidences of acceptance to provide cover by the insurance enterprise and the insurance buyer has paid insurance premiums, except as otherwise agreed upon in the insurance contract.

Article 16, Exclusions

I. Exclusions shall specify events where an insurance enterprise is discharged from its liability to pay indemnity or insurance benefits upon the occurrence of the insured events.

2. Exclusions must be clearly stipulated in the insurance contract and be explained to the insurance buyer upon the entering into the contract.

3. Exclusions shall not operate under the following circumstances:

a) The insurance buyer commits unintentional breach of law;

b) The insurance buyer fails t o give a proper notice to the insurance enterprise upon the occurrence of an insured event due to eligible reasons.

Article 17. Rights and obligations of the insurance enterprise

1. An insurance enterprise shall have the following rights:

a) Collecting premiums as agreed upon in the insurance contract;

b) Requesting the insurance buyer to provide sufficient and honest information relating to the performance of an insurance contract;

c) Unilaterally suspending the performance of an insurance contract subject to clause 2 of Articles 19, clause 2 of Articles 20, clause 2 of Articles 35 and clause 3 of Articles 50 of this Law;

d) Declining to pay insurance benefits to the beneficiary or indemnity to the insured in case where the losses or damages are not within &e cover or in case of the exclusion as agreed upon in the insurance contract:

dd) Requesting insurance buyer to take appropriate measures to prevent. and mitigate losses under this Law and other applicable laws and regulations;

e} Requesting the third party to refund the sum insured which the insurance enterprise has indemnify the insured as a result of the third party's fault against the civil liabilities and property;

g) Other rights as may be prescribed by the law.

2. An insurance enterprise shall have the following obligations:

a) Explaining to the insurance buyer the terms and conditions of the insurance contract. rights and obligations of the insurance buyer thereunder;

b) Issuing to the insurance buyer an insurance certificate or an insurance policy immediately after the entering into an insurance contract;

c) Promptly paying insurance benefits to the beneficiary or indemnity to the insured upon the occurrence of the insured events;

d} Explaining in writing the reasons for its refusal to pay indemnity or insurance benefits:

dd) Co-operating with the insurance buyer in settling a third party's claims for compensation for the losses which fall under the insured liability upon the occurrence of an insured event;

e) Other obligations as may be prescribed by the law.

Article 18, Right and obligation of the insurance buyer

1. The insurance buyer shall have the following rights:

a) Choosing to acquire insurance from insurance enterprise authorized to operate in Vietnam;

b) Requesting the insurance enterprise to explain terms and conditions of the insurance contract; to issue an insurance policy or insurance certificate;

c) Unilaterally terminating the insurance policy pursuant to clause 3 of Article 19 and clause 1 of Article 20 of this Law;

d) Requesting the insurance enterprise to pay insurance benefits to the beneficiary or indemnity to the insured as agreed in the insurance contract upon the occurrence of an insured event;

dd) Assigning insurance contract in accordance with the terms and conditions of the insurance contracts and other relevant provisions of the laws;

e) Other rights as may be prescribed by the law,

2. The insurance buyer shall have the following obligations:

a) Paying premiums in full, and in the schedule and manner as agreed upon in the insurance contract;

b) Making full and true disclosure of all detail and information relating to the insurance contract at the request of the insurance enterprise;

c) Notifying the insurance enterprise of circumstances which may increase risks, or cause to arise additional liabilities of the insurance enterprise during the performance of the insurance contract at the request of the insurance enterprise;

d) Notifying the insurance enterprise of the occurrence of the insured events as agreed upon in the insurance contracts;

dd) Taking appropriate measures to prevent and minimize losses in accordance with provisions of this Law and other relevant laws and regulations; and

e) Other obligations as may be prescribed by the law.

Article 19. Duties to provide information

1. Upon the entering into an insurance contract, the insurance enterprise shall be responsible for explaining terms and conditions of the contract to the insurance buyer; the insurance buyer shall be obliged to provide the insurance enterprise with sufficient information relating to the subject matter of the insurance. Both the insurance enterprise and insurance buyer shall be responsible for the accuracy and honesty of these information. The insurance enterprise shall be responsible to keep confidential all information furnished by the Insurance buyer

2. The insurance enterprise shall be entitled to a unilateral suspension of an insurance contract and collection of premiums until the point of time when the contract is so suspended if the insurance buyer commits one of the following acts:

a) Intentional provision of false information to enter into the insurance contract with a view to receiving insurance benefits or indemnity;

b) Failure to fulfill the obligations to disclose to the insurance enterprise as stated in paragraph c. clause 2, Article 18 of this Law;

3. In case where the insurance enterprise deliberately provides false information to enter into an insurance contract, the insurance buyer shall be entitled to unilaterally suspend the contract and request the insurance enterprise to indemnify for losses or damages incurred as a result of such provision of false information.

Article 20. Changes in degrees of risks

1. In case where a change in the factors referred to in calculating premiums causes a substantial reduction in the risks insured against, the insurance buyer shall have the right to request the insurance enterprise to lower the premiums for the remaining period of the insurance contract. In case the insurance enterprise refuses such a request, the insurance buyer shall be entitled to an unilateral suspension of the insurance contract by giving a written notice to the insurance enterprise.

2. In case where a change in the factors referred to in calculating premiums causes a substantial increase in the risks insured against, the insurance enterprise shall be entitled to recalculate. the premiums. If the insurance buyer refuses to accept such a premium increase: the insurance enterprise shall be entitled to a unilateral suspension of the insurance contract by giving a written notice to the insurance buyer.

Article 21. Interpretation of insurance contracts

In case where an insurance contract contains vague or ambiguous clauses. these clauses shall be interpreted in favor of the insurance buyer.

Article 22. Null and void insurance contracts

1. An insurance contract shall deem to be null and void upon the occurrence of any of the following circumstances.

a} The insurance buyer has no insurable interest in the subject matters of the insurance;

b) Upon entering into an insurance contract, the subject matters of the insurance is not in existence;

c) The insurance buyer is, upon the entering into an insurance contract aware of the occurrence of insured event.

d) The insurance buyer or the insurance enterprise is, upon entering into insurance contract, found of deceiving;

dd) Other cases as prescribed by the laws;

2. Null and void insurance contracts shall be dealt with in accordance with Civil Code and other relevant provisions of the law,

Article 23. Termination of insurance contracts

Apart from cases of contract termination under ;he Article 418 of the Civil Code, an insurance contract shall be terminated under one of the following circumstances:

1. The insurance buyer has no longer an insurable interest.

2, The insurance buyer fails to make 'a full and timely payment of premiums as agreed upon in the insurance contract except otherwise agreed upon by the parties concerned.

3. The insurance buyer fails to make full payment of premiums within the pace period as agreed upon in the insurance contract.

Article 24. Legal consequences of termination of insurance contracts.

1. In case where an insurance contract is terminated in accordance with clause 1 of Article 23 of this Law, the insurance enterprise shall be obliged to refund premium to the insurance buyer in respect of the remaining period of the insurance contract for which the insurance buyer has mode a payment, after deducting reasonable costs which may incur in relation to the insurance contract.

2. In the case that the insurance policy terminates in accordance with clause 2 of Article 23 of this Law, the insurance buyer shall still be obliged to make full payment of premiums until the point of time when the insurance contract is terminated. This provision shall not be applied to insurance of persons.

3. In case where an insurance contract is terminated in accordance with clause 3 of Article 23 of this Law, the insurance enterprise shall still be obliged to indemnify the insured when the insured event occurs within the grace period for premium payment provided that the insurance buyer makes full payment of premium until the expiry of the grace period as agreed upon in the insurance contract, This provision shall not be applied to insurance of persons contracts.

4. The legal consequences of termination of insurance contracts in other cases shall be in accordance with the Civil Code and other relevant provisions of the law.

Article 25. Amendment of and/ or supplement to insurance contracts

1. The insurance buyer and the insurance enterprise may agree to amend and/or supplement premium rates, terms and conditions of insurance except where otherwise provided by the law.

2. Any amendment of or supplement to an insurance contract must be made in writing.

Article 26. Assignment of insurance contracts

1. The insurance buyer may assign the contract as agreed upon therein.

2. ,4n assignment of an insurance contract shall become valid only when a written notice of such an assignment is given to the insurance enterprise by the insurance buyer and the assignment is accepted in writing by the insurance enterprise, except when the assignment is undertaken in accordance with international trade practices.

Article 27. Liabilities in case of reinsurance

1, Insurance enterprise shall be solely responsible to the insurance buyer under the insurance contracts, even in the case of ceding risks they have accepted to cover.

2. The ceded enterprise shall not demand a direct payment of premiums by the insurance buyer except otherwise provided in the insurance contract.

3. The insurance buyer shall not claim for indemnity or payment of insurance benefits from the ceded enterprise except otherwise provided in the insurance contract,

Article 28. Time limit for claiming indemnity o; insurance benefits

1. The time limit within which any claim for indemnity or insurance benefits must be made shall be one year from the date on which an insured event occurs. The length of time during which a force majeure or other objective impediment occurs and continues shall not be included in the time limit for claiming indemnity or insurance benefits.

2. In case where the insurance buyer can successfully proves his unawareness of the occurrence of the insured event, the time limit specified ill clause 1 of this Article shall commence from the date on which the insurance buyer or the insured is aware of such occurrence of the insured event.

3. In case where a claim is lodged by a third party against the insured for damages which incurred within the scope of cover as stipulated in the insurance contract, the time limit specified in clause 1 of this Article shall commence from the date when the third party files his / her claim against the insured.

Article 29. Time limit for paying indemnity or insurance benefits

Upon the occurrence of an insured event, the insurance enterprise shall pay indemnity or insurance benefits within the time limit agreed upon in the insurance contract; in case where there is no agreement on such time limit, the insurance enterprise shall pay indemnity or insurance benefits within 15 days from the date on which all necessary documents have been submitted in relation to such payment of insurance benefits or indemnity.

Article 30. Time limit for initiating a lawsuit

The time limit within which a lawsuit pertaining to an insurance contract may be initiated shall be three years from the occurrence of disputes.

Section 2

CONTRACTS OF INSURANCE OF PERSONS

Article 31. Subjects of contracts of insurance of persons

1. The subject matters of contracts of insurance of persons include life expectancy, life and health of, and accidents of persons.

2. The insurance buyer may only acquire insurance for the following persons:

a) The insurance buyer himself / herself;

b) The-insurance buyer's spouse, children, or parents;

c) Brothers and sisters of the same blood, or persons who foster, support or provide financial assistance to the insurance buyer; and

d) Other persons to whom the insurance buyer has insurable interests.

Article 32. Sum insured

The sum insured or methods by which the sum insured may be determined shall be agreed upon by the insurance buyer and the insurance enterprise in the insurance contract.

Article 33. Bases for paying insurance benefits under personal accident or health care insurance contracts.

1. In personal accident insurance, the insurance enterprise shall, within the limit of the sum insured pay insurance benefits to the beneficiary in consideration of the actual disability of the insured and terms and conditions of the insurance contract.

2. In health care insurance, the insurance enterprise shall pay insurance benefits to the insured within the limit of the sum insured depending on the costs which may incur in relation to the medical examination or treatment of the insured as a result of the illness or accident and subject to terms and conditions of the insurance contract,

Article 34. Disclosure of age in life insurance

1. The insurance buyer shall, upon his / her entering into an insurance contract be obliged to make accurate declaration of the age of the insured to be referred to in calculating the specific amount of premiums payable.

2. In case, where the insurance buyer misstates the age sf the insured and the actual age of the insured does not fall within the insurable range, the insurance enterprise may cancel the contract and return the premiums collected to the insurance buyer after deducting reasonable and relevant costs therefrom. In case the insurance policy has been effective for at least two (02) years, the insurance enterprise must pay the insurance buyer the surrender value of the insurance contract.

3. In case where the insurance buyer misstates the age of the insured which consequently reduces the amount of premium payable, but the actual age of the insured falls within the insurable range, then the insurance enterprise shall have the rights to:

a) Request the insurance buyer to pay additional premiums in equivalence to the amount of premiums so reduced;

b) Lower the insurance benefits as agreed in the insurance contract in equivalence to the paid amount of insurance premium.

4. In case where the insurance buyer misstates the age of the insured which consequently increases the amount of premium payable, but the actual age of the insured falls within the insurable range, then the insurance enterprise shall return the overpaid portion of premium to the insurance buyer or increase the sum insured as agreed in the insurance contract according to the amount of premium actually paid.

Article 35. Payment of premiums in life insurance

1. The insurance buyer may make premium payments in a lump sum or in installments within such a time limit and in such a manner as may be agreed upon in the insurance contracts.

2.In case where the premiums are paid in installments and the insured has paid the first or a number of installment but fails to pay subsequent installment, the insurance enterprise may, after the expiry of the sixty-day-grace period, be entitled to a unilateral suspension of the insurance contract and the insurance buyer shall have no right to claim back the amount of premiums paid if it has paid premiums for less than two (02) years, except otherwise agreed upon by the parties concerned.

3, In case where the insurance buyer has made premium payments for two (2) years and more and the insurance enterprise chose to unilaterally suspend the contract subject to clause 2 of this Article, the insurance enterprise shall pay the insurance buyer the surrender value of the insurance contract.

4. An insurance contract which is unilaterally suspended in accordance with clause 2 of this article may be reinstated if the insurance enterprise and the insurance buyer have, within two (2) years from the date on which the contract is unilaterally suspended, reached an agreement on the reinstatement of the contract and the insurance buyer has made full payment of the outstanding amount of premiums

Article 36. No lawsuit for payment of premium

Under insurance of persons, if the insurance buyer fails to pay premiums or fails to pay the same in full, the insurance enterprise shall not be entitled to file a law suit to demand the insurance buyer to pay premiums.

Article 37. No subrogation

In case where the insured dies or suffers disability or illness as a direct or indirect result of a third party's acts, the insurance enterprise shall still be obliged to pay insurance benefits but shall not make any claim requesting the third party to refund the amount of benefits it has paid to the beneficiary. The third party shall be obliged to indemnify the insured in accordance with relevant provisions of the law.

Article 38. Insurance of a person's death

I. Upon entering into a contract of insurance against the death of another person, the insurance buyer must obtain a written consent of that person specifying the sum insured and the beneficiary thereof. Any change of the insurance beneficiary bust be subject to a written consent of the insurance buyer.

2. Contracts of insurance against the death of the following persons shall not be allowed as follows:

a) Persons under 18 years of age, except where agreed in writing by the parents or the legal guardian of these persons;

b) Persons who are insane.

Article 39. Refusal of paying insurance benefits

1. An insurance enterprise shall not be obliged to effect the payment of insurance benefits under the following circumstances:

a) The insured commits suicide within two (2) years from the payment of the first installment of premium or from the date of renewal;

b) The insured dies or suffer permanent disability as a result of deliberate acts committed by the beneficiary

c) The insured dies due to the execution of death sentence.

2. In case where one of the beneficiaries intentionally causes the death or a permanent disability of the insured, the insurance enterprise shall still be liable to pay insurance benefits to other insurance beneficiaries under the insurance contract.

3. In any of the cases specified in clause 1 of this Article, the insurance enterprise shall have be obliged to pay the insurance buyer the surrender amount of the insurance policy or the entire amounts of premiums paid, after deducting all reasonable and related expenses. In case where-the insurance buyer dies, the amount of refund shall be dealt with in accordance with the provisions of the inheritance law.

Section 3

PROPERTY INSURANCE CONTRACTS

Article 40. Subject matters of property insurance contracts

Subject matter of property insurance contracts shall be property comprising tangible assets, money. papers of value and property rights.

Article 41. Sum insured

The sums insured is the amount of money requested by the insurance buyer to be insured in respect of that property .

Article 42. Over-insurance of property

1. Over-insurance of property is a property insurance contract whereby the sums insured are higher than the market price of the insured property as may be determined upon the entering into the insurance contract. The insurance enterprise and the insurance buyer must not enter into an over-insurance of property.

2. In case an over-insurance of property is made as a result of a unintentional mistake by the insurance buyer, the insurance enterprise shall refund to the insurance buyer the paid amount of premium equivalent to the over-insurance portion after deducting reasonable and relevant costs. In case where an insured event occurs, the insurance enterprise's liability ia pay indemnity shall only be higher than the market value of the property insured.

Article 43. Under-insurance of property

I. Under-insurance of property is a property insurance whereby the sum insured is lower than the market price of the property insured as may be determined upon the entering into the insurance contract.

2. In case of under-insurance of property, the insurance enterprise's liability shall be determined on the pro rata basis of the sums insured to the market price of the property insured upon the entering into the insurance contract.

Article 44. Double insurance

1. Double insurance is a situation where the insurance buyer enters into insurance contracts with two (2) and more insurance enterprises to cover the same subject matter of insurance and under the same terms and conditions and subject to the same insured events.

2. In case of double insurance. the liability of each insurance enterprise shall, upon the occurrence of the insured event, be determined on the pro rate basis of respective amounts of the sum insured under each insurance contract to the total amounts of the sum insured under all insurance contracts. The total amount of indemnity. paid by all insurance enterprise shall not exceed the actual losses to the property.

Article 45. Losses due to tear and wear or inherent nature of the property

The insurance enterprise shall not be liable in case where the property insured is lost or damaged because of the inherent nature of the property or due to tear and wear, except otherwise provided in the insurance contracts.

Article 46. Basis for insurance payment

1. The specific amount of indemnity to be paid to the insured by the insurance enterprise shall be determined on the basis of the market price of the property insured at the time and in the place where the loss occurs, the degree of loss actually occurred, except otherwise agreed by the parties in the insurance contract. Any costs incurred in relation to the determination of market price and the degree of loss shall be borne by the insurance enterprise,

2. The amount of indemnity to be paid by the insurance enterprise to the insured shall not exceed the sum insured, except where otherwise agreed by the parties concerned in the insurance contract.

3. The insurance enterprise shall, in addition to the amount of indemnity also be liable to pay the insured any reasonable and necessary costs incurred in preventing and mitigating losses and other costs incurred by the insured in implementing instructions given by the insurance enterprise.

Article 47. Forms of insurance indemnity

1. The insurance buyer and the insurance enterprise may agree on one of the following means of indemnity:

a) Repair of the damaged property;

b) Replacement of the damaged property with another property;

c) Payment of indemnity.

2. In case where the insurance enterprise and the insurance buyer can not reach the agreement on the form of insurance indemnity. the indemnity shall be provided in money.

3. In case where indemnities are provided subject to paragraph b and c of clause 1 of this article. the insurance enterprise shall be entitled to recover the damaged property after replacement or provision of compensation for the entire value of the property.

Article 48. Loss survey

1. The insurance enterprise or person authorized by the insurance enterprise. upon the occurrence of an insured event conduct a loss inspection to determine the causes and degree of loss. Any costs incurred in relation to loss inspection shall be borne by the insurance enterprise.

2. In case of failure to reach an agreement on the causes and degree of loss the two parties may consult with an independent surveyor except otherwise agreed upon in the insurance contract. In case where there is no agreement on the selection of such an independent surveyor, one of the parties concerned may request a competent court in the locality where the insured resides or the loss of property occurs. Opinion of the independent surveyor shall have a binding effect on the parties concerned.

Article 49. Duties in subrogation

1. In case where a third party is found default in causing damages or losses to the insured and the insurance enterprise has paid indemnity to the insured. the insured must authorize the insurance enterprise to request the third party to compensate an amount of money equivalent to the amount already paid to the insured by the insurance enterprise.

2. In ease where the insured refuses to authorize the insurance enterprise, or fails to reserve or waives his right to request the third party to pay for a compensation, the insurance enterprise shall be entitled to deduct the amount of indemnity depending to the degree of errors committed by the insured.

3, The insurance enterprise may not request any of the parents, spouse, children, sisters or brothers of the same blood of the insured to refund the amount that has been paid by the insurance enterprise to the insured, except where these persons intentionally cause damages or losses.

Article 50. Safety rules

1. The insured shall strictly comply with applicable provisions concerning fire prevention and combating, production safety, labor protection and hygiene, valid other relevant provisions of the laws with a view to maintaining the safety of the subject matter of the insurance.

2. The insurance enterprise may conduct investigation and inspection of safety conditions of the subject matter of insurance, provide recommendations, or request the insurance buyer or / and the insured in writing to take appropriate measures to restrict risks.

3. In case the insured fails to adopt necessary measures to secure the safety of the subject matter of insurance, the insurance enterprise shall be entitled to give a period of time during which the insured shall take such measures. Where, upon expiry of this period, such measures are not yet taken, the insurance enterprise shall be entitled to either increase the rate of premium or unilaterally terminate the performance of the insurance contract.

4. The insurance enterprise may itself take preventive measures to protect the subject matter of insurance subject to the consent of the insured or approval of a competent state body.

Article 51. No abandonment of the insured property

In case of loss, the insured must not abandon the insured property except otherwise provided by the law or otherwise agreed upon by the parties concerned.

Section 4

CIVIL LIABELITY INSURANCE CONTRACTS

Article 52. Subject matter of civil liability insurance contracts

The subject matter of a civil liability insurance contract is the civil liability of the insured to a third party arising under provisions of the law.

Article 53. Insurance enterprise's liability

I. The insurance enterprise's liability shall only arise when the insured is requested by a third party to compensate for damages or losses the insured has caused to the third party at his fault during the period of cover.

2. The third party shall not be entitled to directly claim the insurance enterprise to pay the indemnity except otherwise provided by the law.

Article 54. Sum insured

The sums insured mean the amount of money the insurance enterprise has to indemnify the insured as agreed upon in the insurance contract.

Article 55. Limit of liability

1. The insurance enterprise shall. within the limit of the sum insured be liable to pay the insured all amounts required under the law to be paid by the insured as indemnity to a third party.

2. The insurance enterprise shall, in addition to indemnity paid in accordance with clause 1 of this Article, cover other legal and negotiation costs needed to settle disputes over liability to the third party and interest accumulated as a result of the delayed payment of indemnity by the insured under the instruction from the insurance enterprise.

3. The total amounts of indemnity to be paid by the insurance enterprise in accordance with clauses 1 and 2 of this Article shall not exceed the sum insured, except otherwise agreed upon in the insurance contract.

4. In case! where the insured is required to pay bail to secure the property from a possible custody or to prevent a lawsuit, the insurance enterprise shall. At the request of the insured arrange such bailment or payment of deposit within the sum insured.

Article 56. Right to represent the insured

The insurance enterprise may represent the insured to negotiate, with a third party on the amount of compensation except otherwise agreed upon in the contracts.

Article 57. Insurance indemnity alternatives

The insurance enterprise may, at the request of the insured pay indemnity directly to the insured or directly to the third party suffering damages.

Chapter Ill

INSURANCE ENTERPRISE

Section 1

ISSUING LICENCE OF ESTABLISHENT AND OPERATION

Article 58. Establishment and operation of insurance enterprise

Insurance enterprise shall be established and in existence subject to provision of this Law and other relevant laws.

Article 59, Forms of insurance enterprise

Corporate forms of insurance enterprise shall include:

1) State-owned insurance enterprise;

2) Joint-stock insurance company;

3) Mutual insurance organization;

4) Joint-venture insurance enterprise;

5) Wholly foreign-owned insurance enterprise.

Article 60. Scope of operation of insurance enterprise

1. Insurance enterprise shall be authorized to carry out the following operations:

a) Insurance and reinsurance businesses;

b) Prevention a<d mitigation of risks and losses;

c) Loss surveys;

d) Acting as loss survey and claim settlement agents and / or third party 4aim agents;

dd) Fund management and investment; and

e) Other operations may be provided by the laws,

2. Insurance enterprise shall not be allowed to carry out both life and non life insurance businesses at the same time, except where a life insurance enterprise engages in health and personal accident insurance as auxiliary products of the life mainstream.

Article 61. Scope of reinsurance business

Reinsurance business shall comprise:

1. Ceding part of the risk assumed to one or more other insurance enterprises;

2. Assuming part or the entire risk insured by other insurance enterprise.

Article 62. Competence to issue license of establishment and operation

1, The Ministry of Finance shall issue license of establishment and operation to insurance enterprise and insurance brokerage enterprise accordance with provisions of this Law and other relevant laws.

2. The issuance of establishment and operation licenses to insurance enterprise shall be in conformity with the planning and development orientations of the insurance market and financial market in Vietnam;

Article 63. Licensing conditions

Insurance licensing conditions shall include:

1. Having sufficient amount of paid-up chartered capital which is no less than the amount of legal capital stipulated by the Government;

2. Having application documents duly prepared in accordance with Article 64 of this Law;

3. The proposed corpora:e form and charter are in conformity with provisions of this Law and other relevant laws:

4. Managers and executives hare managerial capacity and professional skill on insurance;

Article 64. Application documents or license of establishment and operation

Application documents for a license of establishment and operation shall include:

1.An application form for a license establishment and operation;

2. A draft charter;

3. A business plan for the first 5 years of operation indicating methods of establishing technical reserves, reinsurance programs, investment plan. business efficiency, solvency and economic benefits of the proposed establishment of the enterprise;

4. List, CVs and documents evidencing the qualifications. capacity and professional skills of executives and managers of the enterprise;

5. Amount and mode of capital contributions, list of organizations and individuals holding 10% or more of the chartered capital, their financial standing and other related information;

6. Terms and conditions of insurance, premium tariffs and commission rates applicable to insurance products proposed to be carried out.

Article 65. Licensing time limit

Within 60 days from the date of full receipt of a set of duly and properly prepared application documents for n license, the Ministry of Finance shall decide whether to grant a license. In case of refusal to issue a license. The Ministry of Finance shall provide explanation of the reasons in writing.

The license of establishment and operations shall be valid as a certificate of business registration.

Article 66. Licensing fees

Insurance enterprise which are licensed for establishment and operation shall pay licensing fees in accordance with relevant provisions of the law.

Article 67. Public announcement

After being granted the license of establishment and operation, insurance enterprise shall publicize their operations in accordance with the existing laws and regulations.

Article 68. Withdrawing of license

1, License of establishment and operation of insurance enterprise may be withdrawn upon the occurrence of any of the following events:

a) The application documents contained intentionally falsified information;

b) The licensees fail to commence their operations after 12 months from the date of issue of their licenses;

c) The licensee is subject to dissolution in accordance with Article 82 of this Law;

d) The licensee is subject to separation, split, merger, dissolution, bankruptcy or transformation of corporate forms;

dd) The licensee engages in improper activities which go beyond the scope of the license or not in compliance with provisions of the license;

e) The licensee fails to satisfy financial requirements to meet its commitments to the insured;

2. In case of withdrawal of license under clause a, b, c, d and e of this Article, the insurance enterprise concerned must be suspended from entering into new insurance contracts but shall still be liable to pay insurance benefits to the beneficiaries or indemnity to the insured and perform all insurance contracts concluded before the withdrawal of licenses of establishment and operation. In case of withdrawal of license as stipulated in paragraph d of this Article, rights and obligations of the parties concerned shall be subject to relevant laws an regulations.

3. Decisions to withdraw license of establishment and operation of insurance enterprise shall be publicized by the Ministry of Finance in mass media.

Article 69. Changes subject to approval

1. The insurance enterprise must obtain a written approval from the Ministry of Finance in case of any change of one of the following contents:

a) Name of the enterprise;

b) Chartered capital;

c) Establishing or closing of branches or representative offices;

d) Location of the headquarters, branches or representative offices;

dd) h e a s , scopes and duration of operations;

e) Transfer of shares or capital contribution accounting for 10% of the chartered capital of the enterprises;

g) Chairperson of the board of management, general director (director);

h) Merger, consolidation, division, separation, dissolution or transformation of its corporate form;

2. The insurance enterprise shall, within 30 days from the date the Ministry of Finance give its approval of changes as stipulated in clause 1 of this Article, has to make public the approved changes in accordance with the relevant laws.

Section 2

MUTUAL INSURANCE ORGANZATION

Article 70. Mutual insurance organization

Mutual insurance organization mean an entity having juridical person status which is established to conduct insurance business with a view to provide mutual assistance and support for its members. Members of the mutual insurance organization act as both the owners and policyholders

Article 71. Members of insurance mutual organization

I. Organizations and / or Vietnamese citizens aged from 18 years old and above, having full civil natural capacity, engaging in the same area of activities or trade, and having demand for insurance shall be entitled to participate in the establishment of mutual insurance organization as founding members.

2. Only those organizations and individuals that enter into insurance contracts with mutual insurance organizations may become members of the mutual insurance organization.

Article 72. Limit of mutual insurance organization's liability

Liability of mutual insurance organization for its debts and other proprietary obligations shall be Limited to its assets only.

Article 73. Establishment, organization and operations of mutual insurance organization

The Government shall made provisions on the establishment, organization and business operations of the mutual insurance organization.

Section 3

TRANSFER OF INSURAVCE CONTRACTS

Article 74. Transfer of insurance contracts

1. A transfer of insurance contracts between insurance enterprises relating to one or number of classes of insurance may take place in the following circumstances:

a) The insurance enterprise is in the danger of insolvency

b) The insurance enterprise is merged, consolidated, divided , separated and dissolved;

2. The Ministry of Finance shall appoint insurance enterprise who shall take over the transferred insurance contracts in case an insurance enterprise is in danger of being insolvent or dissolved and fails to reach an agreement to transfer its insurance contracts to another insurance enterprise.

Article 75. Conditions for a transfer of insurance contracts

The transfer of insurance contracts may be implemented subject to the following conditions:

I. The transferred insurance enterprises carry out the same classes of insurance as those being transferred;

2. The rights and obligations under the transferred insurance contracts remain unchanged until the expiry of the contract;

3. The transfer of insurance contract must be accompanied by a transfer of funds and technical reserves established for the entire insurance contract to be transferred.

Article 76. Procedures for transfer of insurance contracts

The transfer of insurance contracts shall take place in the following procedures:

1. The transferor insurance enterprise shall submit to the Ministry of Finance an application for transfer of insurance contract indicating clearly the reasons and plan of transfer to be attached with an agreement for the transfer of' insurance contracts. The transfer of insurance contracts shall take effect from the date on which such a transfer is approved in writing by the Ministry of Finance.

2. Within 30 days of the Ministry of Finance granting the approval of' transfer of insurance contracts, the transferor insurance enterprises shall cause to publish the transfer in mass media and give a written notice to the insurance buyers.

Section 4

RECOVERY OF SOLVENCY, DISSOLUTION,

BANKRUPTCY OF INSURAVCE ENTERPRISE

Article 77. Solvency

I. The insurance enterprise shall maintain its solvency during its existence and operation.

2. An insurance enterprise shall deem to be solvent when it has established adequate amounts of technical reserves in accordance with Article 96 of this Law and maintained its solvency margin at a l e d not less than the minimum solvency margin prescribed by the Government.

3. Solvency margin of an insurance enterprise shall be the balance between the value of its assets and its outstanding liabilities.

Article 78. Reporting in danger of insolvency

1. An insurance enterprise mag be considered being in danger of insolvency when its solvency margin falls below the levels of minimum solvency margin provided by the Government.

2. In case of being in danger of insolvency. insurance enterprise shall immediately report to the Ministry of Finance on its current state of financial conditions, causes of a possible insolvency and remedies.

Article 79. Obligations of insurance enterprise in danger of insolvency

In case of being in danger of insolvency. Insurace enterprise shall take the following measures:

I. Preparing plans for recovery of insolvency and reorganization of its management and operations to report to the Ministry of Finance and organize the implementation of the plan so approved by the Ministry of Finance.

2. Complying with requests made by the Ministry of Finance in relation the taking of solvency recovery.

Article 80. Control over insurance enterprise in danger of insolvency

1. In case where an insurance enterprise fails to recover its solvency in accordance with the approved plan, the Ministry of Finance shall issue a decision to establish a Board of solvency control to take necessary measures to recover the solvency of the insurance enterprise.

2. The Board of solvency control shall have the following powers and duties:

a) Instructing and monitoring the implementation of solvency remedies in accordance with the approved plan.

b) Notifying relevant State bodies on the introduction of solvency remedies for joint implementation.

c) Limiting the scope and area of business activities by the insurance enterprise concerned.

d) Suspending activities which may cause insolvency to the insurance enterprise.

dd) Requesting the insurance enterprise to transfer its insurance contracts relating to one or more classes of insurance to other insurance enterprise.

e) Requesting the insurance enterprise to temporarily suspend the managing and executive authorities, replace its Board of Management members, General Director (Director), Deputy General Director (Vice Director) if necessary.

g) Requesting the Board of Management, General Director (Director) remove from office or dismiss any staff who are in breaches of the laws or fails to carry out the approved solvency recovery plan.

h) Making recommendations to the Ministry of Finance on continuation or discontinuation of the measures aimed at recovering the solvency of the insurance enterprise.

i) Making reports to the Ministry of Finance on the implementation of solvency recovery measures and its results.

3. The Board of Solvency control shall be responsible for its decision in accordance with laws during the course of implementation of the measures to recover the solvency of the insurance enterprise.

4. The insurance enterprise shall be responsible to carry out the requests and decisions of the Board of Solvency control.

Article 81. Termination of the introduction of solvency remedies

1. The application of solvency remedies shall be terminated in the following circumstances:

a) The time period for application of solvency remedies expires;

b) The insurance enterprise returns to normal operations;

c) The insurance enterprise is merged or consolidated before the expiry of the time period for the application of solvency remedies;

d) The insurance enterprise goes bankrupt.

2. The termination of solvency remedies shall be subject to a decision issued by the Minister of Finance. Such a decision shall be notified to relevant bodies.

Article 82. Dissolution of insurance enterprise

1. An insurance enterprise shall be dissolved in the following cases:

a) The insurance enterprise applies for a voluntary dissolution and is capable of repaying all outstanding debts:

b) The license of establishment and operation expires without extension;

c) Its license of establishment and operation is withdrawn in accordance with paragraphs a, b, dd and e of clause I of Article 68 of this e Law;

d) Other cases as may be stipulated by the laws.

2. The dissolution of an insurance enterprise shall be subject to a written approval from the Ministry of Finance.

Article 83. Bankruptcy of insurance enterprise

In case where an insurance enterprise becomes unable to pay due debts and is still unable to make payment after the introduction of solvency remedies, the bankruptcy procedures shall be taken in accordance with the business bankruptcy law.

Chapter IV

INSURANCE AGENT AND INSURANCE BROKERAGE ENTERPRISE

Section 1

INSURANCE AGENTS

Article 84. Insurance agents

Insurance agents shall include organizations or individual that are delegated under an agency contract by an insurance enterprise to carry out insurance agent's operations in accordance with provisions of this Law and other relevant law.

Article 85. Scope of insurance agent's operation

Insurance agents may be authorized by insurance enterprise to carry out the fallowing activities:

I. Offering and selling insurance contracts;

2. Arranging for insurance contracts to be signed;

3. Collecting premiums;

4. &ranging for claim settlements or payment of indemnity or insurance benefits upon the occurrence of the insured events;

5. Carrying out other activities relating to the performance of insurance contracts.

Article 86. Conditions for insurance agents

I. Individuals acting as insurance agency shall meet the following conditions:

a) Being Vietnamese citizens permanently residing in Vietnam

b) Being 18 years old or above and having full civil natural capacity;

c) Having an insurance agent certificate issued by the insurance enterprise or the Association of Vietnamese Insurance enterprises;

2. Organizations carrying out insurance agent's operation shall meet the following conditions:

a) Being an organization which is duly established and in existence;

b) Employees of the corporate agents who are directly carrying out insurance agent's operations must satisfy all conditions as specified in clause 1 of this Article

3. Persons who are being under criminal prosecution or are serving an imprisonment sentence or being deprived by the Court of the right to professional practice due to their commission of the crimes prescribed by the law shall not be allowed to enter into insurance agency contracts.

Article 87. Contents of insurance agency contracts

An insurance agency contract shall consist of the following main detail and particulars:

1. Name and address of the insurance agent;

2. Name and address of the insurance enterprise concerned;

3. Rights and obligations of the insurance enterprise concerned and the insurance agent;

4. Scope of operations which may be carried out by the insurance agents;

5. Insurance agent's commissions;

6. Duration of the contract; and

7. Principles of dispute settlement.

Article 88. Responsibilities of insurance agents

In case where insurance agents breach the terms and conditions of insurance agency contracts thus causing loss or damage to the legitimate rights and interests of the insured, the insurance enterprise shall still be responsible for the insurance contracts arranged by the insurance agents in default; those agents shall be obliged to compensate the insurance enterprise for the sums which the insurance enterprise has paid as indemnity to the insured.

Section 2

INSURANCE BROKERAGE EKTERPRISE

Article 89. Insurance brokerage enterprise

An insurance brokerage enterprise means an enterprise which carries out insurance broker's operations in accordance with provisions of this Law and other relevant laws.

Article 90. Scope of insurance brokerage operation

Insurance broker's operation shall include:

I. Providing information concerning the class of insurance, terms and conditions of insurance. premiums, and potential insurance enterprise to the insurance buyer;

2. Advising the insurance buyer on risk management, selection of suitable class of insurance, terms and condition of insurance. tariffs, and the appropriate insurance enterprise;

3. Negotiating and arrange the conclusion of insurance contracts between insurance enterprise and the insurance buyer: and

4, Carrying out other activities relating to the performance of the insurance contracts as may be requested by the insurance buyer.

Article 91. Rights and obligations of insurance brokerage enterprise

1. Insurance brokers shall be entitled to an insurance brokerage commission. Insurance brokerage commissions shall be included in premiums.

2. Insurance brokers shall have the obligations:

a) To conduct insurance broking honestly;

b) Not to disclose or supply information causing damage to the lawful rights and interests of purchasers of insurance;

c) To pay compensation to purchasers of insurance for damage caused by insurance broking activities.

Article 92. Professional indemnity insurance

An insurance broker must purchase professional indemnity insurance for its insurance broking activities at an insurer operating in Vietnam.

Article 93. Issue of license of establishment and operation

The issuance of license of establishment and operation .to insurance brokerage enterprise shall be in compliance with Articles 62, 63 and clauses 1,2,3,4 Article 64, Article 65, 66, 67, GS and 69 of this Law.

Chapter V

FINANCE, ACCOUNTING AND FINAKIAL STATEMENTS

Article 94. Legal capital and chartered capital

I. The levels of legal capital of insurance enterprise and insurance brokerage enterprise shall be stipulated by the Government.

2. During the course of their operations, insurance enterprise and insurance brokerage enterprise shall maintain their paid-up chartered capital at least equal the levels of legal capital.

Article 95. Deposit

1. Insurance enterprise shall uses part of their chartered capital to deposit with a commercial bank operating in Vietnam.

2. The Government shall make provisions on specific amounts of deposits and the use of deposits.

Article 96. Technical reserves

1. Technical reserves mean an amount of money which an insurance enterprise is require to establish in order to meet its predetermined liabilities arising from the concluded insurance contracts.

2. Technical reserves shall be separately set aside in respect of each class of insurance business in proportion to the amount of liability retained by an insurance enterprise.

3. The Ministry of Finance shall make detailed provisions on amount and method of establishing technical reserves in respect of each specific class of insurance.

Article 97. Reserve funds

1. Insurance enterprise and insurance brokerage enterprise shall establish a compulsory reserve fund to be added to the charter capital and to ensure their solvency. The compulsory reserve fund shall be derived annually at a rate of 5% of after-tax profits. The maximum amount of this fund shall be prescribed by the Government.

2. In addition to the compulsory reserve fund prescribed in clause 1 of this Article, insurance enterprise and insurance brokerage enterprise may constitute other reserve funds which are derived from after-tax profit earned in the financial year in accordance with the charter of the enterprise.

Article 98. Capital investments

1. Investments by insurance enterprise shall be safe, effective and capable of meeting the demands for regular payments as undertaken under insurance contracts.

2. Insurance enterprise may invest their temporarily idle capital in Vietnam only and subject to the following portfolios:

a) Trading in government bonds;

b) Trading in shares and corporate bonds;

c) Real estate development;

d) Making capital contributions to other enterprise;

dd) Providing loans under the haw on Credit Institutions;

e) Depositing in credit institutions.

3. The Government shall make specific provisions on investment portfolios in areas listed in clause 2 of this article and the percentage of idle capital admitted for investment in each portfolio to ensure the insurance enterprises solvency.

Article 99. Income: and expenses

1. Income and expenses of insurance enterprise and insurance brokerage enterprise shall be carried out in accordance with relevant laws and regulations.

2. The Ministry of Finance shall provide guidance and inspect the compliance with financial requirements by insurance enterprise and insurance brokerage enterprise.

Article 100. Fiscal year

The fiscal year of insurance enterprise and insurance brokerage enterprise commences at 1st January and end at 31st December of the same calendar year. The first fiscal year of the insurance enterprise and insurance brokerage enterprise shall commence on the date of receipt of their license of establishment and operation and end at the last day of the same calendar year.

Article 101. Accounting regime

Insurance enterprise and insurance brokerage enterprise shall adopt accounting systems applicable to insurance business in accordance with accounting laws and regulations.

Article 102. Auditing

Annual financial statements of .insurance enterprise and insurance brokerage enterprise must be certified by an independent auditing firm.

Article 103. Financial statements

1. Insurance enterprise and insurance brokerage enterprise must comply with statutory requirements for submission of financial statements in accordance with accounting and statistical rules and periodic reports on technical issues as provided by the Ministry af Finance.

2. Apart from periodical reports, insurance enterprise and insurance brokerage enterprise must submit to the Ministry of Finance reports in the following cases:

a) There are abnormal developments during the course of their business operations;

b) Prescribed financial requirements are not satisfied to meet their

commitments to the insured.

Article 104. Making public financial statements

After the end of each financial year, insurance enterprise and insurance brokerage enterprise shall make public their financial statements in accordance with the existing laws.

Chapter VI

FOREIGN INVESTED INSURANCE ENTERPR1SE AND

FOREIGN INVESTED INSURANCE BROKERAGE ENTERPRISE IN VIETNAM

Article 105. Forms of operation

I. Foreign insurance enterprise and foreign insurance brokerage enterprise may be authorized to operate in Vietnam in the following forms:

a) Joint venture insurance enterprise or joint venture insurance brokerage enterprise;

b) Wholly foreign owned insurance enterprise or wholly foreign owned insurance brokerage enterprise:

2. Foreign insurance enterprise and lo^ foreign insurance brokerage enterprise may open representative offices in Vietnam. Their representative offices shall not carry out business activities in Vietnam

Article 106. Licensing conditions

Licensing conditions for foreign insurance enterprise and foreign invested insurance brokerage enterprise shall comprise:

1. Conditions provided for in article 63 of this Law;

2. Foreign insurance enterprise and / or foreign insurance brokerage enterprise are authorized operating and are in a sound financial standing.

3. Foreign insurance enterprise and foreign insurance brokerage enterprise are authorized by competent bodies in their respective foreign countries to conduct insurance business and insurance broker's operations in the areas that are planned to be carried out in Vietnam

Article 107. Licensing on conditions for establishment of a representative office in Vietnam.

The conditions for getting a license to establish a representative office of foreign insurance enterprise and foreign insurance brokerage enterprise in Vietnam shall comprise:

1. Foreign insurance enterprise or foreign insurance brokerage enterprise has been established and in existence for at least 5 (five) years;

2. Foreign insurance enterprise or foreign insurance brokerage enterprise has established co-operative relations with Vietnamese bodies and / or organizations.

Article 108. Licensing authority

The Ministry of Finance shall issue license of establishment and operation to foreign invested insurance enterprise, foreign invested insurance brokerage enterprise, and issue license of establishment of representative office to foreign insurance enterprise and foreign insurance brokerage enterprise in Vietnam.

Article 109. Application documents for license of establishment and operation

1. Apart from documents required under Article 64 of this Law, the application documents for establishment and operation license in respect of joint venture insurance enterprise and/or joint venture insurance brokerage enterprise comprise:

a) Charters and duly certified operation licenses of the joint venture parties;

b) A joint venture contract;

c) Balance sheets and annual financial statements certified by an independent auditing firm as to the business operations of the joint venture parties for the latest three years.

2. Apart from documents required. under Article 64 of this Law, the application documents for establishment and operation license in respect of wholly foreign owned insurance enterprise and /or wholly foreign owned insurance brokerage enterprise shall comprise:

a) Charter and operation license of the foreign insurance enterprise and / or foreign insurance brokerage enterprise in the country where its head quarters are located:

b) Power of attorney given to the general director (director) in Vietnam; and

C) Balance sheets and annual financial statements certified by an independent auditing firm as to the business operation of the foreign insurance enterprise and / or foreign insurance brokerage enterprise for the latest three years.

Article 110. Application for license of establishment of representative office

Application documents for a license of establishment of representative office license of foreign insurance enterprise and / or foreign insurance brokerage enterprise in Vietnam shall comprise:

1) An application for a license of establishment of representative office;

2) Operation license of the foreign insurance enterprise and/or foreign insurance brokerage enterprise in the countries where its head quarters are located.

3) Balance sheets and annual financial statements certified by an independent auditing firm as to the business operations of the foreign insurance enterprise and / or foreign insurance brokerage enterprise for the latest three years.

4) Full names and CVs of chief representative of the representative offices in Vietnam;

5) Introduction of the foreign insurance enterprise and / or foreign insurance brokerage enterprise and their co-operation with Vietnamese bodies and/or organizations.

Article 111. Licensing time limit, Licensing fees and announcement of operation

Licensing time limit, licensing fees and announcement of operation applicable to foreign invested insurance enterprise and insurance brokerage enterprise, representative offices of foreign insurance enterprise and / or foreign insurance brokerage enterprise shall be in accordance with Article 65, 66 and 67 of this Law.

Article 112. Withdrawing of license

I. Apart from provisions of Article 68 of this law, license of establishment and operation of foreign invested insurance enterprise and insurance brokerage enterprise may be withdrawn when the license of establishment and operation issue to foreign insurance enterprise and foreign insurance brokerage enterprise are revoked in the countries where their headquarters are located.

2. License of establishment of representative office of foreign insurance enterprise and insurance brokerage enterprise may be withdrawn when the license of establishment and operation issued to foreign insurance enterprise and foreign insurance brokerage enterprise are revoked in the countries where their headquarters are located.

Article 113. Changes subject to approval

Provisions of Article 69 of this Law concerning changes subject to approval shall also be applied to foreign invested insurance enterprise and insurance brokerage enterprise.

Article 114. Scope of operation

Scope of operation of foreign invested insurance enterprise and insurance - brokerage enterprise, representative offices of foreign insurance enterprise and insurance brokerage enterprise shall be subject to provisions of this Law and other relevant laws of Vietnam.

Article 115. Capital, reserve funds and financial revenue and expenditure of foreign invested insurance enterprise and foreign insurance brokerage enterprise

1. The specific levels of legal capital of foreign invested insurance enterprise and insurance brokerage enterprise shall be provided for by the Government.

2. The establishment of compulsory and voluntary reserve funds of foreign invested insurance enterprise and insurance brokerage enterprise shall be in accordance with Article 97 of this Law.

3. Financial revenue and expenditure of foreign invested insurance enterprise and insurance brokerage enterprise shall be in accordance with relevant provisions of the laws of Vietnam.

Article 116. Deposits, solvency, technical reserves and investment of foreign invested insurance enterprise

1. Foreign invested insurance enterprise shall maintain their solvency in accordance with Article 77 of this Law.

2. Foreign invested insurance enterprise shall make deposit and establish technical reserves in accordance with .*tide 95 and 96 of this Law.

3. Investments by foreign invested insurance enterprise shall be subject to Article 98 of this Law.

Article 117. Regimes of accounting, auditing and financial statements

I. Foreign invested insurance enterprise and insurance brokerage enterprise shall adopt such accounting systems, auditing requirements and financial statements in accordance with Article 101, 102, 103 and 104 of this Law.

2. Within 180 days from the end of a fiscal year, foreign invested insurance enterprise and insurance brokerage enterprise, representative offices of foreign insurance enterprise and foreign insurance brokerage enterprise shall submit the annual reports of the relevant foreign insurance enterprise and insurance brokerage enterprise to the Ministry of Finance.

Article 118. Remittance of profits and assets to foreign countries

1. Wholly foreign owned insurance enterprise and wholly foreign owned insurance brokerage enterprise may remit to foreign countries their retained profits after establishment of required funds and fulfillment of their financial obligations under the laws of Vietnam.

2. Foreign party to joint venture insurance enterprise and joint venture insurance brokerage enterprise may remit to foreign countries the amount of distributed profits after the joint venture insurance enterprise and / or joint venture insurance brokerage enterprise have established required funds and fulfilled their financial obligations under the laws of Vietnam.

3. Wholly foreign owned insurance enterprise and foreign party to joint venture insurance enterprise, wholly foreign owned insurance brokerage enterprise and the foreign parties to joint venture insurance brokerage enterprise may remit to foreign countries their remaining assets after the liquidation and// or termination of their operation in Vietnam.

4. Remittance of money and assets to foreign countries provided for in clauses 1,2 and 3 of this Article shall be in accordance with relevant provisions of the laws of Vietnam.

Article 119. Other provisions

The Government shall make detailed provisions on the contents, scope an area of operations by foreign invested insurance enterprise and insurance brokerage enterprise and representative offices of foreign insurance enterprise and foreign insurance brokerage enterprise in Vietnam

Chapter VII

STATE ADMINISTRATION OF INSURANCE BUSINESS

Article 120. Contents of State administration of insurance business

State administration of insurance business shall consist of:

1. Promulgating and providing guidance on the implementation of legal documents governing insurance business; formulating strategies, master plans. plans and policies on development of Vietnam's insurance market:

2. Granting and withdrawing licenses of insurance enterprise, insurance brokerage enterprise and license for the establishment of representative offices of foreign insurance enterprise and foreign insurance brokerage enterprise in Vietnam:

3. Issuing, approving and providing guidance on the implementation of terms and conditions, tariffs and insurance commission

4. Taking necessary measures to ensure that insurance enterprises meet the statutory financial requirements and fulfill their commitments to the insurance buyer.

5. Organizing the information works and giving forecast of the insurance market in Vietnam;

6. Undertaking international co-operation in insurance business

7. Approving overseas activities by insurance enterprise and / or insurance brokerage enterprise;

8. Administering the operations of representative offices of foreign insurance enterprise and foreign insurance brokerage enterprise;

9. Organizing the training of and building up managerial and technical staffs for insurance enterprise, insurance agents and insurance brokers; and

10. Inspecting, monitoring and supervising insurance business operations; dealing with complain, claims and breaches of insurance business laws.

Article 121. State administrative bodies

1. The Government shall carry out uniform administration of insurance

2. The Ministry of Finance shall take responsibility to the Government for the implementation of State regulation and supervision of insurance business.

3. Ministries and ministerial and governmental bodies shall, within the scope of their tasks and powers, be responsible to carry out State supervision over insurance business operations in accordance with the laws.

4. People's committees at all levels shall, within the scope of their territories and powers, carry out State administration of insurance business under the laws.

Article 122. Inspection of insurance business

1. Inspection of insurance enterprises shall be conducted in conformity with the competence of the inspecting bodies and in compliance with the relevant laws and regulations.

Financial inspection for the insurance enterprises may be conducted for no more than one time a year. The time limit of inspection shall not exceed 30 days. In special cases, such a time limit may be extended subject to a decision of a higher competent body but shall not be longer than 30 days.

Extraordinary inspection may only be conducted when there are signs of law violation by the insurance enterprise.

2. The conduct of an inspection shall be subject to a decision by a competent person. A minutes of inspection conclusion must be prepared after the end of the inspection. The head of the inspection team shall be responsible for the content of the minutes and inspection conclusion.

3. Person who makes a legal inspection decision or abuses the inspection for his / her own benefit, extorts or obstruct the operation of the insurance enterprise shall, depending on the seriousness of the breach, be subject to disciplinary sanctions or criminal prosecution, or pay damages to the enterprise as provided by the law.

Chapter VIII

REWARDING AND DEALING WITH BREACHES

Article 123. Rewarding

Organizations which and individuals who contribute to insurance business and discover violations of insurance business law shall be rewarded in accordance with applicable laws.

Article 124. Breaches of insurance laws and regulations

Breaches of insurance laws and regulations shall comprise:

1. Carrying insurance business without a license, or in non-compliance with the contents stipulated therein;

2. Violating provisions concerning the issue of license of establishment and operation, inspection and supervision conducted by the competent State bodies:

3. Engaging in unfair competition;

4. Compelling others to enter into insurance contracts;

5. Breaching regulations on compulsory insurance;

6. Breaching the obligations of keeping confidential the information disclosed by customers in relation to the insurance contract;

7. Providing false information, data and report; and

8. Carrying out business activities in failure to met financial requirements in accordance with laws; breaching regulations en legal capital, reserve funds, deposits, establishment, management and use of technical reserves;

9. Breaching regulations on investment.

10. Committing other breaches of laws on insurance business

Article 125. Handling of breaches

I. Organizations and / or individuals breaching the stipulation of this Law shall depending on the characteristics. seriousness and consequence of the breach, be subject to administrative sanctions or criminal prosecution and shall compensate for damages, if any, in accordance with the laws.

2. Any persons who abuse their position or power to contravene provisions on granting license of establishment and operation, and license for establishment of representative offices of foreign insurance enterprise and foreign insurance brokerage enterprise in Vietnam. and stipulations on State management of insurance business and other provisions of this Law shall, depending on the characteristics, seriousness and consequence of the breach, be subject to disciplinary sanctions or criminal prosecution and shall compensate for damages, if any, in accordance with the laws.

Article 126. Complaining and initiating lawsuits against decisions on dealing with administrative breaches

1. Organizations and individuals subject to sanctions on administrative breaches shall be entitled to appeal against the decisions of sanctions to the Ministry of Finance or initiate lawsuits at competent courts.

2. During the course of resolving such appeals or lawsuits, the organizations and individuals subject to sanctions shall still be obliged to comply with the decisions of sanctions. When decisions of settling the claims issued by competent State bodies or decision or awards rendered by a competent Court take effect these decision or awards shall be followed.

Chapter IX

IMPLEMENTING PROVISIONS

Article 127.Provision applicable to insurance enterprise insurance brokerage enterprise, or representative offices which are established and in existence or insurance contracts which are entered before this Law takes effect

1. Insurance enterprise, insurance brokerage enterprise which have been established and operating in accordance with their establishment license, investment license and certificate of insurance business competence, and representative office of foreign insurance enterprise and insurance brokerage enterprise which have been operating in accordance with their representative office license granted before the effective date of this Law shall not be required to apply for a re-issuance of license of establishment and operation.

2. All insurance contracts which were concluded before the effective date of this Law shall continue to be implemented in accordance with laws which were applied at the time of concluding.

Article 128. The effectiveness of this Law

1. This Law shall take effect from 1st April 2001

2. All previously issued provisions which are contrary to the Law shall be hereby repealed.

Article 129. Guidance on the implementation of the Law

The Government shall provide detailed provisions and guidance on the implementation of this Law.

This Law was passed on 09 December 2000 by the National Assembly of the Socialist Republic of Vietnam at its VIII Session of X Legislature.

CHA1RMAN OF THE NATIONAL ASSEMBLY

Nong Duc Manh