In accordance with the Circular No. 52/2016/TT-BTC of the Ministry of Finance dated March 21, 2016 guiding the provision of universal life insurance products, an insurer must satisfy the following conditions such as its solvency margin is at least VND 100 billion larger than the minimum solvency margin; having an appropriate information technology system to manage and control the universal life fund in a prudent and efficient manner and its universal life insurance product is approved by the Ministry of Finance.
On universal life insurance benefits, the Circular prescribes that insurance benefits under universal life policies include risk insurance benefit and investment benefit. On risk insurance benefit, an insurer and an insurance buyer may agree on the risk insurance benefit but shall ensure that the minimum insurance sum is not lower than five times the first year’s premium amount for multiple-premium policies, or is not lower than 125% of the total premium amount for single-premium policies; insurers may provide insurance products to complement universal life insurance products. Methods of premium payment for complementary insurance products shall be agreed upon by parties when entering into insurance policies. On Investment benefit: Insurance buyers benefit from yields from investment of the universal life fund at the minimum investment ratio stated in insurance policies.
Also in accordance with this Circular, insurers may only compute premiums; initial premium; risk insurance premium; fund management premium; insurance policy cancellation premium; insurance policy management premium; and other premiums (if any). Besides, in addition to premiums agreed upon in insurance policies, insurance buyers may additionally pay premiums in order to contribute to the universal life fund; for every year of the policy term, the total additionally paid premium amount must not exceed five (5) times the first year’s premium for multiple-premium policies or must not exceed 50 percent of the initial premium for single-premium policies…
This Circular takes effect on June 01, 2016.
