Client Alert Vietnam’s Proposed Amendments to the Regulations on Voluntary Pension Insurance Products Provided by Life Insurers Recent developments The Ministry of Finance (“MOF”) recently released the preliminary draft of a circular (“Draft Circular”) on voluntary pension insurance and the pension fund. The overarching aim is to encourage growth for this type of pension scheme, making voluntary pension products provided by life insurers more attractive to customers in Vietnam. The proposed Circular will amend the current regulations enacted on 20 August 2013, under Circular No. 115.1 Circular No. 115 was previously issued as part of a Government initiative to provide an alternative pension scheme to ensure pension benefits for employees. However, two years from when it was issued, few insurance companies and employers have opted to adopt this scheme. Specific amendments proposed by the Draft Circular (a) Amendment to the conditions for insurance agents Under Circular No. 115, for a life insurer to sell pension insurance products, its agents must have at least six consecutive months of experience as life insurance agents, or six (6) consecutive months working in finance, banking and insurance. The Draft Circular proposes to ease this requirement with the substitution of a new condition of “being trained to sell voluntary pension insurance products”. Accordingly, under the Draft Circular, to be permitted to sell pension insurance products, insurance agents will need to satisfy the three following conditions: (i) Having an insurance agent certificate, issued by a training organization approved by the MOF; (ii) Not having violated the rules on agent occupational ethics of the life insurer whilst practising as an agent; and (iii) Having been trained to sell voluntary pension insurance products. 1 Circular No. 115/2013/TT-BTC of the MOF dated 20 August 2013 on voluntary pension insurance and pension fund (“Circular No. 115”). Insurance Vietnam Baker & McKenzie (Vietnam) Ltd. 12th Floor, Saigon Tower 29 Le Duan Blvd District 1 Ho Chi Minh City Socialist Republic of Vietnam Tel: +84 8 3829 5585 Fax: +84 8 3829 5618 Baker & McKenzie (Vietnam) Ltd. Hanoi Branch Office Unit 1001, 10th Floor Indochina Plaza Hanoi 241 Xuan Thuy Street Cau Giay District, Hanoi Socialist Republic of Vietnam Tel: +84 4 3825 1428 Fax: +84 4 3825 1432 May 2015 2 Vietnam | May 2015 Should you wish to obtain further information or want to discuss any issues raised in this alert with us, please contact: Oanh H. K. Nguyen +84 8 3520 2629 email@example.com Dang Chi Lieu +84 4 3936 9341 firstname.lastname@example.org Nguyen Thanh Hai +84 4 3936 9606 email@example.com www.bakermckenzie.com This client alert provided by Baker & McKenzie (Vietnam) Ltd. is intended to provide our clients, and other interested parties, with an overview of the recent legal changes in the relevant area for information purposes only. The information contained in this client alert does not constitute legal advice or legal opinion, and should not be regarded as a substitute for detailed advice in individual cases. The information, as referred to in this client alert, is based on the laws, regulations, notifications, practice and policy at the time of its production. The laws, regulations, notifications, practice and policy may change from timeto-time and, therefore, the use of this client alert must be taken with due care. You are strongly advised that no use should be made of the information in this client alert without prior consultation with Baker & McKenzie (Vietnam) Ltd.. No portion hereof may be reproduced or transmitted, by any means, without the prior written permission from Baker & McKenzie (Vietnam) Ltd.. All rights reserved. Baker & McKenzie (Vietnam) Ltd. is a member of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. ©2015 Baker & McKenzie (Vietnam) Ltd. All rights reserved. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. (b) Withdrawal in advance of pension insurance account Under Circular No. 115, an insured person is entitled to request the life insurer for a withdrawal in advance of a part of, or the whole of the value of a pension insurance account in the following cases: (i) The insured person has a reduced working capacity of 61% or more; and (ii) The insured person suffers a dangerous disease. In addition to the above circumstances, the Draft Circular supplements a new case allowing insured persons who lawfully reside in foreign countries to withdraw, fully or partly in advance, their pension insurance account. (c) Age threshold for eligibility to receive pension insurance In terms of the age threshold for eligibility to receive pension insurance, the MOF proposes to make this voluntary pension insurance regime more consistent with Vietnamese law on retirement age, as well as the pension regime of compulsory social insurance. Specifically, while Circular No. 115 provides for a standard age of retirement (which is not lower than 60 for men and 55 for women), the Draft Circular supplements an exception “where provided otherwise by law regarding retirement age” in order to cover any special circumstances. Please let us know if you have any comments on these proposed amendments by the MOF, or any other changes you would like to make to Circular No. 115. We can assist you with reviewing and sending your suggested changes to the drafting team of the MOF accordingly.