The Ministry of Finance directly manages Protection Fund for insured

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Using Protection Fund to compensate insurants when enterprises are unable to pay.

Accordingly, insurance companies, foreign subsidiaries (excluding reinsurance companies) are required to contribute to Protection Fund.

Before April 30 every year, the Ministry of Finance announces the Fund contribution rate for the year, which does not exceed 0.3% of total premium revenue retained by the original insurance contract in the previous fiscal year of the insurance companies, foreign branches.

Before June 30 every year, insurance companies, foreign branches have to pay 50% of the payable amount for the Fund in the fiscal year. Before December 31 every year, insurers, insurance companies, foreign branches have to complete obligation to contribute to the Fund in the fiscal year.

The payment is made to the total amount of the Fund reaching 5% for businesses of non-life insurance, health insurance businesses, foreign branches and 3% of total assets for companies of life insurance.

Protection Fund for insured is managed centrally at the Ministry of Finance and carried out accounting, management, monitoring for each type of life insurance, non-life insurance and health insurance. Protection Fund for insurants is used for this kind of life insurance, non-life insurance and health insurance.

This fund is used in the case of insurance companies, foreign branches in solvency crisis and insurance companies, foreign branches have carried out measures to restore solvency, but cannot fix, insurers. Then insurance companies, foreign branches are allowed to use the Protection Fund for insured according to the Ministry of Finance’s decision on the termination of the application of measures to restore solvency.

If an insurance company goes bankrupt, the Fund shall be used from the time of the Judges declaring the bankruptcy of insurance company.

The Protection Fund for insured is used to pay the insurance, refund; compensation insurance; insurance refund as provided in the insurance contract at the request of insurance companies, foreign branches in solvency crisis, bankrupt companies and once for each file at the request of insurance payment, refund value payment, insurance indemnity payment or fee insurance refund.

Idle money of the Fund is only implemented to invest in Vietnam to buy government bonds, corporate bonds, corporate bonds guaranteed by the Government and deposits at commercial banks.

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The Ministry of Finance on its own or entrusts the organization to invest based on the idle money of the Fund. In case of entrusted investment, entrusted investment organizations must be authorized by competent agencies to carry out activities of entrusted investment in the line with contents of receiving entrusted investment.