The Insurance Supervision and Administration Department (Ministry of Finance) requires non-life insurance businesses to manage risks with three independent lines of protection.

The Insurance Supervision and Administration Department (Ministry of Finance) has just issued official documentary No. 489/QLBH-PNT requesting non-life insurance enterprises, reinsurance enterprises, branches of foreign non-life insurance enterprises to strengthen the implementation of risk management, internal control and audit.

Accordingly, businesses need to establish and implement a risk management system to effectively and legally identify, measure, evaluate, report and control business operations.

In particular, businesses must organize risk management with 3 independent lines of protection in professional departments including risk management, internal audit department, compliance audit and other control departments.In addition, businesses need to identify significant risks such as insurance risk, market risk, operational risk, partnership risk (including legal risk, fraud risk), liquidity risk and other risks according to the assessment of the insurance enterprise that may be encountered in the course of business operations. Additionally, businesses will have to observe the risk status and timely assess, early warning the possibility of violating the risk limits, limit the risks to ensure safety in operations such as making internal reports on risk observation.

On the other hand, non-life insurance providers also need to control the implementation of business processes according to corresponding risk limits. Test the endurance according to regulations, have proposals to prevent, minimize and promptly handle risks to ensure the level of risk limits.

At the same time, businesses must comply with the investment law provisions in the Law on Insurance Business 2022 and the law. Specifically, the investment is not allowed to exceed 30% of the capital invested in companies in the same group of companies with mutual ownership and cannot be reinvested in any form for shareholders, capital contributed members in accordance with the Law on 
Enterprises, except for deposits at shareholders and members being credit institutions.

Enterprises need to inspect and supervise the performance of insurance agency contracts, rate the quality of insurance agents' advice and introduction of insurance products and employees in the insurance agency operation organization. Inspect and supervise the revenue and expenses of the insurance enterprise to ensure the compliance with tax laws, insurance business laws and other relevant laws.

"The Board of Directors, the Board of Members, the General Director, the legal representative, the relevant departments of the insurance enterprise that are responsible for the implementation in accordance with regulations, taking responsibility for the effectively manage and supervise operations, fulfill obligations and commitments to insurance buyers", according to the Department of Insurance Management and Supervision.

Source: Taichinhdoanhnghiep