MINISTRY OF FINANCE SOCIALIST REPUBLIC OF VIETNAM

------- Independence - Freedom - Happiness

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No. 01/2019/TT-BTC Hanoi, January 2, 2019

CIRCULAR
AMENDMENTS AND SUPPLEMENTS TO CERTAIN ARTICLES OF CIRCULAR NO. 50/2017/TT-
BTC DATED MAY 15, 2017 OF MINISTRY OF FINANCE, PROVIDING INSTRUCTIONS ON
IMPLEMENTATION OF GOVERNMENT’S DECREE NO. 73/2016/ND-CP DATED JULY 1, 2016,
ELABORATING ON IMPLEMENTATION OF LAW ON INSURANCE AND LAW ON AMENDMENTS
OR SUPPLEMENTS TO CERTAIN ARTICLES OF LAW ON INSURANCE BUSINESS
Pursuant to the Law on Insurance Business No. 24/2000/QH10 dated December 9, 2000;
Pursuant to the Law on Amendments and Supplements to the Law on Insurance Business No.
61/2010/QH12 dated November 24, 2010;
Pursuant to the Government's Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions,
tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Government’s Decree No. 73/2016/ND-CP dated July 1, 2016 elaborating on the
implementation of the Law on Insurance Business and the Law on Amendments and Supplements to
certain Articles of the Law on Insurance Business;
Upon the request of the Director of the Department of Insurance Management and Supervision;
the Minister of Finance hereby promulgates the Circular on amendments and supplements to certain
articles of the Circular No. 50/2017/TT-BTC dated May 15, 2017 of the Ministry of Finance, providing
instructions on implementation of the Government’s Decree No. 73/2016/ND-CP dated July 1, 2016,
elaborating on implementation of the Law on Insurance and the Law on Amendments or Supplements
to certain articles of the Law on Insurance Business.
Article 1. Amendments and supplements to certain articles of the Circular No. 50/2017/TT-BTC
dated May 15, 2017 of the Ministry of Finance as follows:
1. Amending and supplementing the second line in point a of subparagraph 3.1 of paragraph 3 of
Article 18 as follows:
“- Setting-aside bases:
+ 100% of Commissioners Standard Ordinary (CSO) mortality table 1980 and other technical basis in
conformity with insurance benefits that the insurer has committed to provide for clients with insurance
products endorsed by the Ministry of Finance. In any case, mortality rates and risk rates to be used in
setting aside of the reserve shall not be less than those to be used for calculating insurance premiums
by the insurer.
+ Maximum technical interest rate shall not exceed 80% of the average interest rate of Government
bonds with a minimum maturity of 10 years which have been issued in the latest 24 months before the
reserve has been set aside. The technical interest rate to be used for setting aside the reserve shall
not exceed the average investment rate of the immediately preceding 4 (four) consecutive quarters of
the insurer and the interest rate on the premium of each insurance product.
The mathematical reserve shall be deemed as zero (0) if the calculation result is a negative value.
Example: Within the latest 24 months before the setting aside of the reserve, the maximum technical
interest rate on Government bonds with maturity of 10 years or above, such as maturity of 10 years,
15 years, 20 years and 30 years, which are purchased after winning in a bidding, shall be calculated
according to the following formula:

Maximum  n 10 ,15, 20 , 30

LS (TB )Average
n
investment
Interest rate on
technical = min(80% 
rate in the
; each insurance )
4 immediately preceding
interest rate product’s premium
; 4 quarters
Where:
n: Government bond maturity (n = 10, 15, 20, 30);
LS(TB)n: Average interest rate on Government bond with maturity of n years issued within last 24
months before setting aside of the reserve. This is calculated as follows:
 
k
LS( i )n
i 1
LS(TB )n 
k
LS(i): Interest rate on the Government bond won in the (i) th bidding session;
k: Number of times of winning in the Government bond bidding equivalent to maturity of n years;
+ As for insurance policies underwritten from February 16, 2019, the insurer may use maximum
technical interest rates prescribed herein.
+ As for insurance policies underwritten before February 16, 2019, the maximum technical interest
rate shall be calculated according to the following calculation method:
• In 2019: Maximum technical interest rate = 40% A + 60% B
• In 2020: Maximum technical interest rate = 60% A + 40% B
• In 2021: Maximum technical interest rate = 80% A + 20% B
• In 2022: Maximum technical interest rate = 100% A
Where: A denotes 80% of the average interest rate of Government bonds with a minimum maturity of
10 years which have been issued in the latest 24 months before the reserve has been set aside.
B denotes 70% of the average interest rate of the Government bond with a minimum maturity of 10
years which has been issued in the latest 6 months before the reserve has been set aside.
The technical interest rate to be used for setting aside the reserve shall not exceed the average
investment rate in the immediately preceding 4 (four) consecutive quarters of the insurer and the
interest rate on the premium of each insurance product.”
2. Adding point l after point k to subparagraph 2.3 of paragraph 2 of Article 20 as follows:
“l. Assets generated from financial profits likely to arise from Government bond purchase and
redemption transactions carried out from February 16, 2019”.
3. Amending and supplementing clause 1 of Article 27 as follows:
“1. If the policyholder fund has been in deficit (value of assets is smaller than that of liabilities), the life
insurer must provide additional cash or deposits kept in the custody of credit institutions from the
owner’s fund to the policyholder’s fund to make up the deficit. When the policyholder's fund has been
in surplus (value of assets is greater than that of liabilities), the life insurer is refunded partly or wholly
the above additional amounts without interest, provided that the refund does not result in any deficit in
the policyholder’s fund”.
Article 2. Entry into force and implementation
1. This Circular shall take effect on February 16, 2019.
2. In the course of implementation of this Circular, if there is any difficulty likely to arise, entities
concerned should send timely feedbacks to the Ministry of Finance for its review and decision on any
necessary amendment or supplement./.

PP. MINISTER
DEPUTY MINISTER

Huynh Quang Hai