Insurance management and supervision fees are fees that insurance businesses must pay to state management agencies. This fee is calculated based on the business’s revenue from insurance activities. The fees applied to different forms of insurance business are different. The following article will provide detailed information about insurance management and supervision fees in 2024.

What is the fee for management and supervision of insurance activities?

Insurance management and supervision fees are fees that insurance businesses must pay to state insurance management agencies. This fee is regulated in Circular 01/2020/TT-BTC of the Ministry of Finance. The purpose of this fee is to ensure funding for insurance market management and supervision activities.

Insurance management and supervision fees are calculated based on the business’s revenue from insurance activities. Specifically, the fee is calculated as a percentage of original insurance premium revenue, reinsurance fee revenue or insurance brokerage commission revenue, depending on the type of insurance business.

Collecting management fees and monitoring insurance activities helps ensure transparency and efficiency in insurance market management. At the same time, it also contributes to creating financial resources for state management agencies to perform well the function of supervision, protecting the interests of insurance participants and maintaining the stability of the insurance market.

Who must pay fees for management and supervision of insurance activities?

According to regulations in Circular 01/2020/TT-BTC, subjects required to pay insurance management and supervision fees include:

• Insurance business
• Reinsurance business
• Insurance brokerage business

Clearly defining fee payers helps ensure fairness and transparency in insurance market management. Each type of business has different operating characteristics, so the applicable fees are also adjusted accordingly.

In addition, this regulation also helps state management agencies have a legal basis to collect fees from all subjects operating in the insurance sector, thereby having financial resources to carry out management work. and effective monitoring.

Reference content: Clause 1, Article 2, Circular 01/2020/TT-BTC.

Fees must be paid for each subject

Insurance enterprises, branches of foreign insurance enterprises in Vietnam

For insurance enterprises and branches of foreign insurance enterprises in Vietnam, the fee for management and supervision of insurance activities is set at 0.03% of the original insurance premium (after deducting refunds, original insurance premium reduction). Fees for management, supervision and insurance activities of insurance enterprises are calculated on an annual basis and paid in 2 installments:

• Term 1 (first 6 months of the year): Premium amount payable = original insurance premium (first 6 months of the year) x 0.03%
• Period 2: Amount of premium payable = original insurance premium of the preceding fiscal year x 0.03% – premium amount paid in period 1

This fee is applied equally to both domestic insurance enterprises and branches of foreign insurance enterprises, ensuring fairness in the business environment. Fee calculation based on original insurance premium revenue accurately reflects the scale of the business’s operations, thereby determining the appropriate contribution level for management and supervision.

Reference content: Clause 1, Article 3, Circular 01/2020/TT-BTC.

Reinsurance business

For reinsurance businesses, the management and supervision fee for insurance activities is set at 0.03% of the reinsurance fee. Fees for management, supervision and insurance activities of reinsurance enterprises are calculated on an annual basis and paid in 2 installments:

• Period 1 (first 6 months of the year): Fees payable = reinsurance fee (first 6 months of the year) x 0.03%
• Period 2: Fees payable = reinsurance fee of the preceding fiscal year x 0.03% – fees paid in period 1

This fee reflects the operational characteristics of reinsurance businesses, which are different from conventional insurance businesses. Calculating fees based on reinsurance premium revenue helps ensure fairness and is consistent with the scale of operations of the business in the reinsurance sector.

Reference content: Clause 2, Article 3, Circular 01/2020/TT-BTC.

Insurance brokerage business

For insurance brokerage businesses, the fee for management and supervision of insurance activities is set at 0.03% of insurance brokerage revenue. Fees for management, supervision and insurance activities of insurance brokerage enterprises are calculated on an annual basis and paid in 2 installments:

• Period 1 (first 6 months of the year): Fees payable = revenue from insurance brokerage activities (first 6 months of the year) x 0.03%
• Period 2: Fees payable = revenue from insurance brokerage activities in the preceding fiscal year x 0.03% – fees paid in period 1

This fee is consistent with the specific operations of insurance brokerage businesses, which do not directly provide insurance but only act as an intermediary. Calculating fees based on insurance brokerage commission revenue helps ensure fairness and accurately reflects the scale of business operations in the insurance brokerage field.

Reference content: Clause 3, Article 3, Circular 01/2020/TT-BTC.

Note:

• Period 1: No later than August 31 every year, the premium payer calculates and pays the insurance management and supervision fee for the first 6 months of the year.
• Period 2: No later than April 30 of the following year, the fee payer calculates and pays the insurance management and supervision fee for the immediately preceding fiscal year.

Consulting services on management fees and supervision of insurance activities at Long Phan

Insurance management and supervision fees are an important aspect of the insurance business. Long Phan provides professional consulting services on management fees and supervision of insurance activities. Long Phan’s team of experts has extensive experience in the insurance field and understands relevant legal regulations.

Services provided by Long Phan include:

• Detailed consulting services on how to calculate and pay fees: Specific instructions on how to determine revenue as a basis for calculating fees, explaining fee calculation methods for each type of insurance business
• Consulting on related legal regulations: Update the latest legal documents on management fees and supervision of insurance activities, analyze the impact of new regulations on businesses
• Support for reporting and declaring fees: Instructions on how to prepare revenue reports as a basis for fee calculation, support for accurate and timely fee declaration
• Representation services and problem resolution: Business representatives work with state insurance management agencies, supporting the resolution of problems and complaints related to management and supervision fees
• Evaluation and optimization service: Evaluate the business’s compliance with fee regulations, propose solutions to optimize the fee calculation and payment process

Customers can contact Long Phan for detailed advice on management fees and supervision of insurance activities. Long Phan’s team of experts is ready to assist customers in answering all questions and providing solutions suitable to the specific needs of their businesses. To ensure compliance with regulations and optimize costs, customers should consult experts. Long Phan is ready to assist customers in this matter. Contact us immediately via Hotline: 0906735386 for detailed advice and timely support.