Decree No. 43/2001/ND-CP dated August 01, 2001 of the Government prescribing the financial regime applicable to insurance enterprises and insurance brokerage enterprises
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi, August 01, 2001
PRESCRIBING THE FINANCIAL REGIME APPLICABLE TO INSURANCE ENTERPRISES AND INSURANCE BROKERAGE ENTERPRISES
Pursuant to the Law on Organization of the Government of September 30, 1992;
Pursuant to the Law on Insurance Business of December 9, 2000;
At the proposal of the Minister of Finance,
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Article 1.- Scope of regulation
1. This Decree prescribes the financial regime applicable to insurance enterprises and insurance brokerage enterprises, which are established, organized and operate under the provisions of the Law on Insurance Business.
2. This Decree shall not apply to mutual support insurance organizations.
Article 2.- Financial management principles
Insurance enterprises and insurance brokerage enterprises shall enjoy financial autonomy, take self-responsibility for their own business operation results and fulfill their obligations and commitments according to the provisions of law.
Article 3.- State management agencies
The Finance Ministry shall perform the function of State management over finance, guide and inspect the observance of the financial regime by insurance enterprises and insurance brokerage enterprises according to the provisions of law.
MANAGEMENT AND USE OF CAPITAL AND ASSETS
Section 1. LEGAL CAPITAL, CHARTER CAPITAL, DEPOSITS AND MANAGEMENT
Article 4.- Legal capital
1. Legal capital levels of insurance enterprises:
a/ For non-life insurance business: VND 70,000,000,000 or USD 5,000,000;
b/ For life insurance business: VND 140,000,000,000 or USD 10,000,000.
2. The legal capital level of insurance brokerage enterprises: VND 4,000,000,000 or USD 300,000.
Article 5.- Charter capital
1. Charter capital of an insurance enterprise or insurance brokerage enterprise is the capital inscribed in such enterprise’s charter.
2. In the course of operation, insurance enterprises and insurance brokerage enterprises shall have to maintain the already contributed charter capital at a level not lower than the legal capital level prescribed in Article 4 of this Decree.
3. In cases where an insurance enterprise or insurance brokerage enterprise changes its charter capital already inscribed in its charter or where the transfer of shares of shareholders or contributed capital proportions of joint-venture parties accounts for 10% of the charter capital or more, such insurance enterprise or insurance brokerage enterprise shall have to file an application therefor and a written exposition to the Finance Ministry. Within 30 days after receiving the application and exposition, the Finance Ministry shall reply in writing on its approval or disapproval. In case of disapproval, the Finance Ministry shall have to explain the reasons therefor in writing.
4. Insurance enterprises and insurance brokerage enterprises, which had been established, organized and operating before the Insurance Business Law took effect, had their charter capital lower than the legal capital level prescribed in Article 4 of this Decree shall, within 3 years from the effective date of this Decree, have to fully supplement their charter capital according to regulations.
Article 6.- Deposits
1. Within 60 days after being granted the establishment and operation license, an insurance enterprise shall have to deposit part of its already contributed charter capital at a commercial bank operating in Vietnam. The deposit shall enjoy interest according to an agreement reached with the bank where such deposit is made.
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