Life Insurance Product Regulatory Approval and Registration Updates
The Ministry of Industry and Trade (MOIT) and the Ministry of Finance (MOF) have jointly issued Regulation No. 43301, which details the coordinated process between the MOIT and the MOF in handling the approval of life insurance products under the Law on Insurance Business, in connection with the registration of life insurance policy templates and terms & conditions under the Law on Consumer Protection.
In order to address the overlapping and duplicate procedures and increased compliance costs for life insurers in the market created in 2015 by Decision No. 352, the Government adopted Decree No. 733, which offers a simplified process that establishes the MOF's role as the sole agency to receive application dossiers for both procedures and requires the MOF to discuss and agree with the MOIT on insurance products required to be registered for standard contract forms and general trading terms & conditions in accordance with the Law on Consumer Protection.
Regulation No. 4330 provides helpful guidance on the detailed process of coordination between the two ministries. However, Regulation No. 4330 has not addressed certain issues which can continue creating administrative burdens and unnecessary costs for local life insurers.
Implications for local life insurers' existing products
Following the release of Regulation No. 4330, the MOF issued instructions to life insurers to comply with this Regulation4. Accordingly, the coordinated process under Regulation No. 4330 limits its application to only life insurers' new insurance products going forward. With respect to existing products, the life insurers are still required to work with the MOIT to complete registrations under the Law on Consumer Protection.
Life insurance policies terms and conditions standardized
Regulation No. 4330 provides for standard terms and conditions templates for (i) traditional life insurance products and (ii) universal life insurance products, as the templates pre-agreed upon by the MOIT and the MOF. This helps to facilitate and expedite the MOIT's review process.
On the other hand, Regulation No. 4330 allows the MOIT to grant additional follow-up requests to the life insurers for revisions to the policies and terms & conditions for any contents which have not been agreed upon by the two ministries under Regulation 4330.5
This can create new limitations on life insurers abilities to develop new or improved products and terms & conditions.
Similar to Decree No. 73, under Regulation No. 4330, life insurers need to submit insurance products and terms & conditions to the MOF, which is required to approach the MOIT for comments.
However, under Regulation No. 4330, the combined timeline for the process of MOF product approval and MOIT registration of policy terms & conditions can last around 37 working days or more.6 Under Decree No. 73, the timeline for registration of life insurance products with the MOF is 21 working days upon the receipt of a full and valid application dossier, a shorter timeline than under Regulation No. 4330.7 In this respect, Regulation No. 4330 fails to address life insurers' concerns about the prolonged timeline for the approval and registration process, which, therefore, may impact the business plans of life insurers.
1Coordination Regulation No. 4330/QCPH/BTC-BCT of the Ministry of Industry and Trade and
the Ministry of Finance dated 31 March 2017 regarding their coordination in the approval of
life insurance products and registration of contract templates and terms & conditions for life insurance ("Regulation No. 4330").
2 Decision No. 35/2015/QD-TTg of the Prime Minister dated on 20 August 2015 amending and
supplementing Decision No. 02/2012/QD-TTg of the Prime Minister dated 13 January 2012,
on the list of essential goods and services for which contract forms and general transaction terms must be registered ("Decision No. 35").
3 Decree No. 73/2016/ND-CP dated 01 July 2016 of the Government providing detailed regulations on the implementation of Law on Insurance Business and amended Law on Insurance Business (“Decree No. 73”).
4 Official Dispatch No. 4860/BTC-QLBH of the Ministry of Finance dated 13 April 2017 regarding the implementation of coordination Regulation with the Ministry of Industry and Trade.
5 Article 3.1.3(f), Regulation No. 4330.
6 Article 3 and Annex 2, Regulation No. 4330.
7 Article 40.1, Decree No. 73.