THE GOVERNMENT

At the proposal of the Minister of Finance,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Regulation subjects and application scope

1. The sanctioning of administrative violations in the field of insurance business shall apply to individuals, agencies and organizations (hereinafter referred collectively to as individuals and organizations) that intentionally or unintentionally violate the legislation on insurance business activities, which are not crimes and, according to law provisions, must be administratively sanctioned.

2. This Decree shall apply to:

a) Individuals and organizations that commit administrative violations in the field of insurance business prescribed in Chapter II of this Decree.

b) Foreign individuals and organizations operating in the Vietnamese territory and committing acts of administrative violations in the field of insurance business prescribed in this Decree, except otherwise provided for by international treaties which Vietnam has signed or acceded to.

Article 2.- Sanctioning principles

1. All administrative violations in the field of insurance business must be detected in time and immediately stopped. The sanctioning of administrative violations must be carried out promptly, justly and resolutely; all consequences caused by administrative violations must be overcome strictly according to law provisions.

2. The sanctioning of administrative violations in the field of insurance business shall be effected by competent persons defined in this Decree.

3. An act of administrative violation in the field of insurance business shall be sanctioned only once. Organizations or individuals that commit many acts of administrative violations shall be sanctioned for each act of violation.

4. The sanctioning of administrative violations in the field of insurance business must be based on the nature and seriousness of the violations, the personal background of the violators and extenuating as well as aggravating circumstances prescribed in Articles 8 and 9 of the Ordinance on Handling of Administrative Violations in order to decide the appropriate handling forms and measures.

Article 3.- Statute of limitations for sanctioning administrative violations

1. The statute of limitations for sanctioning an administrative violation in the field of insurance business shall be two years as from the date the individual or organization commits act of administrative violation the field of insurance business. Past the above-mentioned time limit, sanction shall not be imposed but consequence-overcoming measures prescribed at Points a and e, Clause 3, Article 12 of the Ordinance on Handling of Administrative Violations shall still apply.

2. Individuals who have been prosecuted or given the decisions to bring their cases to court for trial according to criminal procedures but latter given decisions to suspend the investigation or the cases while their violation acts show signs of administrative violations shall be administratively sanctioned; the statute of limitations for sanctioning the administrative violations shall be 3 months as from the date the persons with sanctioning competence receive the suspension decisions and dossiers of the violation cases.

3. Within the time limits prescribed in Clauses 1 and 2 of this Article, if the violating individuals continue to commit administrative violations or deliberately shirk or obstruct the sanctioning, the statute of limitations for sanctioning prescribed in Clauses 1 and 2 of this Article shall not apply; the statute of limitations for sanctioning administrative violations shall be recounted from the time of committing new administrative violations or the time of stopping acts of shirking or obstructing the sanctioning.

Article 4.- Time limits for being considered as having not yet been sanctioned for administrative violations.

1. Individuals and organizations that are sanctioned for administrative violations and do not repeat their violations within one year counting from the date of completely serving the sanctioning decisions or the date when the execution of the sanctioning decisions expires shall be considered as having not yet been sanctioned for administrative violations.

2. If past 2 years as from the date of completely serving the handling decisions, the individuals subject to the application of other administratively handling measures shall be considered as having not yet been subject to such measures.

Chapter II

VIOLATION ACTS, SANCTIONING FORMS AND LEVELS

Section 1. ADMINISTRATIVE VIOLATIONS ON MANAGEMENT AND USE OF LICENSES

Article 5.- Violations of regulations on management and use of establishment and operation licenses, representative office- establishing licenses

1. Caution or a fine of between VND 1,000,000 and 5,000,000 for one of the following acts:

a) Failing to publicize or untruthfully publicizing the operation contents under the relevant law provisions;

b) Failing to commence operation after 12 months as from the date of being licensed;

c) Publicizing late as compared to the prescribed deadline the approved change contents as provided for in Article 69 of the Insurance Business Law.

2. A fine of between VND 1,000,000 and 3,000,000 for acts of leasing, lending establishment and operation licenses, representative office- establishing licenses.

3. A fine of between VND 2,000,000 and 5,000,000 for one of the following acts:

a) Renting, borrowing, transferring establishment and operation licenses or representative office- establishing licenses;

b) Erasing, modifying establishment and operation licenses or representative office- establishing licenses;

c) Doing business or operating in contravention of the contents inscribed in the establishment and operation licenses or representative office-establishing licenses;

d) Continuing operation or business when having been suspended from business activities or having had the establishment and operation licenses or representative office-establishing licenses withdrawn.

4. A fine of between VND 5,000,000 and 10,000,000 for one of the following acts:

a) Doing insurance business or insurance brokerage business without licenses;

b) Receiving insurance brokerage services provided by foreign insurance brokerage enterprises which are not licensed to operate in Vietnam.

5. Additional sanctioning form

Deprivation of the right to use establishment and operation licenses or representative office-establishing licenses for administrative violation acts prescribed at Point b, Clause 1; Clause 2; Points b and c, Clause 3 of this Article.

6. Application of redressing measures

Being forced to publicize the operation contents or make correction of untruthfully announced operation contents, for administrative violation acts prescribed at Point a, Clause 1 of this Article.

Article 6.- Violation of regulations on working offices, establishing or dissolving insurance enterprises, insurance brokerage enterprises

1. A fine of between VND 1,000,000 and 5,000,000 for acts of opening, terminating the operation of, or relocating, the head-offices, branches and/or representative offices of insurance enterprises or insurance brokerage enterprises without the Finance Ministry's written approval.

2. A fine of between VND 15,000,000 and 20,000,000 for acts of dividing, separating, consolidating, merging, re-purchasing, dissolving or changing enterprise forms of, insurance enterprises or insurance brokerage enterprises without the Finance Ministry's written approval.

3. Additional sanctioning form

Deprivation of the right to use establishment and operation licenses for administration violation acts prescribed in Clauses 1 and 2 of this Article.

4. Application of redressing measures

Being compelled to restore the initial state which was altered due to administrative violations prescribed in Clauses 1 and 2 of this Article.

Article 7.- Violations of regulations on administration, management and control

A fine of between VND 1,000,000 and 3,000,000 shall be imposed for acts of changing the Managing Board chairmen, general directors (directors) without the Finance Ministry's written approval.

Article 8.- Violations on changing the names, capital level, contents and scope of operation

1. A fine of between VND 3,000,000 and 5,000,000 for changing the names of insurance enterprises or insurance brokerage enterprises without the Finance Ministry's written approval.

2. A fine of between VND 10,000,000 and 15,000,000 for acts of changing one of the following contents without the Finance Ministry's written approval:

a) The charter capital level;

b) The operation contents, scope and time;

c) Transfer of shares, contributed capital portions, which account for 10% of the charter capital or more.

3. Application of redressing measures:

a) Being compelled to restore the initial state which was altered due to administrative violation acts prescribed in Clauses 1 and 2 of this Article;

b) Suspending operation for a definite term; narrowing the operation contents, scope and geographical areas for administrative violation acts prescribed in Clauses 1 and 2 of this Article.

Article 9.- Violations of regulations on transfer of insurance contracts

1. A fine of between VND 10,000,000 and 15,000,000 for one of the following acts:

a) Carrying out the transfer of insurance contracts when failing to fully satisfy the transfer conditions as provided for by law;

b) Carrying out the transfer of insurance contracts when not yet so approved in writing by the Finance Ministry;

c) Failing to publicize and notify in writing the transfer of insurance contracts to the insurance buyers as provided for by law.

2. Application of redressing measures

a) Being compelled to restore the initial state which was altered due to administrative violation acts prescribed in Clause 1 of this Article;

b) Suspending operation for a definite term, narrowing the operation contents, scope and geographical areas, for the administrative-violation acts prescribed in Clause 1 of this Article.

Section 2. ADMINISTRATIVE VIOLATIONS ON INSURANCE UNDERWRITING

Article 10.- Unlawful competition

1. A fine of between VND 10,000,000 and 20,000,000 shall be imposed on individuals and organizations committing one of the following acts:

a) Giving information, advertisement with untruthful contents and scope of operation and/or insurance conditions, thus harming the legitimate rights and interests of the insurance buyers or of other insurance enterprises;

b) Competing for customers by ways of obstructing, dragging, buying off or intimidating personnel or customers of other insurance enterprises, insurance agents and/or insurance brokerage enterprises;

c) Making unlawful sale promotion;

d) Agreeing to restrict competition, causing damage to the interests of the insurance buyers.

2. Application of redressing measures:

a) Being compelled to make corrections in forms and according to procedures prescribed by law, for administrative-violation acts defined at Point a, Clause 1 of this Article;

b) Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clause 1 of this Article.

Article 11.- Illegally forcing the entry into insurance contracts

1. Caution or a fine of between VND 2,000,000 and 5,000,000 for acts of forcing the purchase of insurance, the use of insurance brokerage and/or re-insurance brokerage services in any forms.

2. Application of redressing measures:

a) Being compelled to restore the initial state which was altered due to administrative-violation acts prescribed in Clause 1 of this Article;

b) Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clause 1 of this Article.

Article 12.- Violation of regulations on compulsory insurance

1. Caution or a fine of between VND 2,000,000 and 5,000,000 for one of the following acts:

a) Refusing to sell compulsory insurance to individuals and organizations that have demand to buy compulsory insurance by insurance enterprises which are entitled to do business in compulsory insurance;

b) Failing to perform the obligation of buying professional responsibility insurance for insurance brokerage activities at insurance enterprises operating in Vietnam by insurance brokerage enterprises.

2. Application of redressing measures

Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clause 1 of this Article.

Article 13.- Violation of regulations on compulsory re-insurance

1. Caution or a fine of between VND 2,000,000 and 5,000,000 on individuals and organizations committing one of the following acts:

a) Failing to perform the compulsory re-insurance obligation according to law provisions by insurance enterprises;

b) Refusing to accept total or partial compulsory re-insurance as provided for by law.

2. Application of redressing measures:

Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clause 1 of this Article.

Article 14.- Illegally participating in insurance overseas

A fine of between VND 5,000,000 and 10,000,000 on individuals and organizations committing one of the following acts:

1. Buying insurance of foreign insurance enterprises which have no offices in Vietnam or of foreign insurance enterprises conducting insurance business in Vietnam in contravention of law provisions;

2. Forcing individuals and/or organizations to participate in insurance overseas in contravention of law provisions.

Article 15.- Acts of seeking personal profits in insurance participation, insurance indemnification, insurance sum payment, insurance-complaint settlement

1. Caution or a fine of between VND 1,000,000 and 5,000,000 on individuals or organizations committing acts of seeking personal profits to receive indemnities, insurance sum.

2. A fine of between VND 2,000,000 and 10,000,000 on officials or personnel of insurance enterprises, insurance agents or insurance brokerage enterprises, who commit one of the following acts:

a) Requesting insurance interest beneficiaries to pay remuneration or other material interests in contravention of law in the course of settling compensation, payment of insurance money;

b) Conniving with insurance interest beneficiaries in settling the insurance indemnification and/or payment of insurance sums in contravention of law.

3. Application of redressing measures:

Being compelled to restore the initial state, which was altered due to administrative violation acts prescribed in Clauses 1 and 2 of this Article.

Article 16.- Violations on secrets of insurance business activities

Caution or a fine of between VND 2,000,000 and 5,000,000 on insurance enterprises, officials, personnel or insurance agents of insurance enterprises, that commit acts of disclosing secrets, information related to the entry into, performance and/or termination of, insurance contracts.

Article 17.- Violation of regulations on use of terms, rules, tables of insurance charge, commission

1. A fine of between VND 5,000,000 and 10,000,000 for one of the following acts:

a) Using rules, terms not yet been registered with the Finance Ministry or failing to abide by the rules, terms and/or insurance charge tables approved and promulgated by the Finance Ministry, by insurance enterprises;

b) Paying insurance commissions higher than the rates or paying insurance not to the right subjects, as prescribed by law;

c) Providing consultancy or recommendation to the insurance buyers by insurance brokerage enterprises, on the rules, terms and/ or insurance charge table, which have not yet been promulgated or approved by the Finance Ministry or not yet been registered with the Finance Ministry.

2. Application of redressing measures

a) Being compelled to restore the initial state, which was altered due to administrative violation acts prescribed in Clause 1 of this Article;

b) Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative violation acts prescribed in Clause 1 of this Article.

Article 18.- Violation of regulations on recruitment, training, employment and activities of insurance agents

1. Caution or a fine of between VND 2,000,000 and 5,000,000 for one of the following acts:

a) Failing to abide by the regulations on training of insurance agents, recruitment and employment of insurance agents that are unqualified for insurance agency activities, have no agent certificates and/or do not sign insurance agency contracts;

b) Failing to satisfy all conditions prescribed in Article 86 of the Insurance Business Law by individuals engaged in agency activities;

c) Providing untruthful information by insurance agents in an attempt to deceive the insurance buyers.

2. Application of redressing measures

Being compelled to restore the initial state, which was altered due to administrative violation acts prescribed in Clause 1 of this Article.

Section 3. ADMINISTRATIVE VIOLATIONS OF FINANCIAL, BOOK-KEEPING ACCOUNTING AND FINANCIAL STATEMENT REGIMES

Article 19.- Violation of regulations on capital and security deposit

1. Caution for one of the following acts:

a) Failing to ensure the capital contribution schedule as provided for in the charter;

b) Failing to fully pay or not paying security deposit strictly according to regulations.

2. A fine of between VND 10,000,000 and 20,000,000 for one of the following acts:

a) Failing to maintain the minimum contributed charter capital level equal to the legal capital level;

b) Using the security deposit money in contravention of law provisions.

3. Application of redressing measures:

a) Being compelled to supplement the minimum charter capital equal to the legal capital level, for administrative violation acts prescribed at Point a, Clause 2 of this Article;

b) Being compelled to supplement the security deposits or to pay the security deposits as provided for by law;

c) Being compelled to recover the security deposit money amounts used in contravention of regulations, for administrative-violation acts prescribed at Point b, Clause 2 of this Article;

d) Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clauses 1 and 2 of this Article.

Article 20.- Violation of regulations on compulsory reserves, deduction for setting up, management and use of operation reserves

1. Caution for acts of failing to register methods of deduction for setting up of operation reserves with the Finance Ministry by insurance enterprises.

2. A fine of between VND 20,000,000 and 30,000,000 for one of the following acts:

a) Failing to make deductions for setting up of, or making deduction not enough for, the operation reserves as prescribed;

b) Failing to abide by the methods of making deduction for setting up of operation reserves, which have been registered with the Finance Ministry;

c) Failing to make deductions for setting up of, or making deduction not enough for, compulsory reserves as prescribed;

d) Using the compulsory reserve fund, operation reserves not according to regulations.

3. Application of redressing measures:

a) Being compelled to make deductions for setting up of operation reserves and compulsory reserves according to law provisions, for administrative-violation acts prescribed at Points a, b, and c, Clause 2 of this Article;

b) Recovering the operation reserve money and/or compulsory reserves, which have been compulsorily used not in accordance with law provisions, for administrative violation acts prescribed at Point d, Clause 2 of this Article;

c) Suspending operation for a definite period of time; narrowing operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clauses 1 and 2 of this Article.

Article 21.- Violation of regulations on capital investment

1. A fine of between VND 20,000,000 and 30,000,000 for one of the following acts:

a) Investment outsides the domains permitted for investment under the provisions of law;

b) Investment beyond the permitted ratio in each investment list;

c) Using operation reserve capital sources for investment overseas;

d) Using investment capital sources in contravention of regulations.

2. Application of redressing measures:

a) Being compelled to restore the investment activities according to law provisions;

b) Recovering the amounts of investment made in contravention of law provisions for administrative-violation acts prescribed in Clause 1 of this Article.

c) Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative violation acts prescribed in Clause 1 of this Article.

Article 22.- Violation of regulation on financial safety in operation of insurance enterprises

1. A fine of between VND 20,000,000 and 30,000,000 for one of the following acts:

a) Failing to report in time to the Finance Ministry when the enterprises are in danger of insolvency;

b) Failing to beat the deadline for elaboration and execution of plans on restoration of solvency, consolidation of the organization and operation of the enterprises;

c) Failing to implement the Finance Ministry's request for restoration of solvency.

2. A fine of between VND 50,000,000 and 70,000,000 on insurance enterprises which fail to maintain the solvency at any time in the course of their operation.

3. Application of redressing measures:

a) Forced restoration of the solvency according to law provisions, for administrative-violation acts prescribed in Clauses 1 and 2 of this Article;

b) Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, for administrative-violation acts prescribed in Clauses 1 and 2 of this Article.

Article 23.- Violations on the management of information, reports on insurance business activities

Acts of violation and the handling of administrative violations of the regimes of accounting, reporting, supply of information related to insurance business activities shall comply with the regulations on sanctioning administrative violations in the field of accounting.

Article 24.- Violation of regulations on inspection, examination and supervision by competent State bodies

1. Caution for acts of delaying, shirking or failing the supply of materials and data at the requests of inspecting agencies, inspecting teams, competent State bodies in the course of inspection, examination and supervision; or employing tricks to cope with inspectors, officials of competent State bodies, who are performing their official duties.

2. A fine of between VND 2,000,000 and 5,000,000 for one of the following acts:

a) Failing to abide by the handling decisions of inspecting agencies, competent State bodies;

b) Intervening in the handling by inspecting agencies or competent State bodies;

c) Hiding, modifying vouchers and/or books or changing material evidences while being inspected;

d) Arbitrarily dismantling, removing or committing other acts of changing the sealings of warehouses, funds, books, accounting vouchers, insurance dossiers or material evidences being sealed, temporarily seized.

3. Application of redressing measures:

Suspending operation for a definite period of time; narrowing the operation contents, scope and geographical areas, administrative violation acts prescribed in Clauses 1 and 2 of this Article.

Chapter III

COMPETENCE TO SANCTION ADMINISTRATIVE VIOLATIONS IN THE FIELD OF INSURANCE BUSINESS

Article 25.- Competence to sanction administrative violations in the field of insurance business

1. The provincial-level People's Committee presidents, the district-level People's Committee presidents shall, within the scope of their respective jurisdiction prescribed in Articles 29 and 30 of the Ordinance on Handling of Administrative Violations, be competent to sanction administrative violations in the field of insurance business.

2. Inspectors of the Finance Ministry, inspectors of the provincial/municipal Finance Services, who are performing their official duties, shall have the power:

a) To impose caution;

b) To apply redressing measures prescribed in this Decree, except for the measures of suspending operation for a definite period of time and narrowing operation contents, scope and geographical areas for administrative-violation acts prescribed in this Decree.

3. The chief inspectors of the provincial/municipal Finance Services shall have the power:

a) To impose caution;

b) To impose a fine of up to VND 20,000,000;

c) To apply redressing measures prescribed in this Decree, except for measures of suspending operation for a definite period of time; and narrowing the operation contents, scope and geographical areas for administrative violation acts prescribed in this Decree.

4. The Finance Ministry's chief inspector shall have the power:

a) To impose caution;

b) To impose a fine of up to the highest level prescribed in this Decree;

c) To apply additional sanctioning forms and redressing measures prescribed in this Decree.

Chapter IV

SANCTIONING PROCEDURES, EXECUTING SANCTIONING DECISIONS AND COMPLAINTS

Article 26.- Procedures for sanctioning administrative violations in the field of insurance business

The procedures for sanctioning administrative violations in the field of insurance business shall comply with the provisions in Chapter VI of the Ordinance on Handling of Administrative Violations of July 2, 2002.

Article 27.- Coercive execution of decisions on sanctioning administrative violations in the field of insurance business

The coercive execution of decisions on sanctioning administrative violations in the field of insurance business shall comply with the provisions in Article 66 of the Ordinance on Handling of Administrative Violations of July 2, 2002.

Article 28.- Administratively sanctioning the acts of opposing persons performing official duties in the field of insurance business

The administrative sanctioning of persons who commit acts of opposing people who are performing their official duties in the field of insurance business shall comply with the law provisions on sanctioning administrative violations in the field of security and order.

Article 29.- Commendation and discipline

1. Individuals and organizations recording achievements in preventing and combating acts of administrative violations in the field of insurance business shall be considered for commendation/reward according to the general regulations of the State.

2. Persons competent to handle administrative violations in the field of insurance business, who commit acts of covering up administrative violations in the field of insurance business or failing to comply with the regulations on sanctioning administrative violations in the field of insurance business prescribed in this Decree, shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability, and if causing damage, have to pay compensations therefor according to law provisions.

Article 30.- The statute of limitations for execution of sanctioning decisions

The decisions to sanction administrative violations in the field of insurance business shall be no longer valid after on year as from the date of their issuance; in cases where sanctioned individuals or organizations deliberately evade or delay the execution thereof, the statute of limitation prescribed in this Article shall not apply.

Article 31.- Complaints and denunciations

The complaints and denunciations against decisions on sanctioning administrative violations in the field of insurance business and the settlement thereof shall comply with the law provisions on complaints and denunciations.

Chapter V

IMPLEMENTATION PROVISIONS

Article 32.- Implementation organization

The Minister of Finance shall have to guide, examine and supervise the implementation of this Decree.

Article 33.- Implementation provisions

1. This Decree takes implementation effect 15 days after its publication in the Official Gazette.

2. The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the People's Committees of the provinces or centrally-run cities shall have to implement this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI