Fraud in the insurance business — from colluding to settle claims unlawfully, to forging claim documents, to self-inflicted damage to collect benefits — can lead to criminal prosecution under Article 213 of the Penal Code (the offence of fraud in the insurance business), applying to both individuals and insurance companies (legal entities, fined up to VND 7 billion). The starting threshold: appropriating insurance money of VND 20 million or causing damage of VND 50 million.
Can insurance business fraud lead to criminal prosecution?
The answer is yes. The applicable provision is Article 213 of the Penal Code (per consolidated document 135/VBHN-VPQH; amended by point b, Clause 49, Article 1 of Law 12/2017/QH14). Note: Law 86/2025/QH15 (effective 01/7/2025) did not amend Articles 211–215 — the figures below are current as of 14/10/2026.
Critical numbering trap: under the current consolidated document 135, Article 211 = market manipulation of securities; Article 212 = forging documents in offering/listing dossiers — two securities offences unrelated to insurance. Insurance fraud comprises Article 213 (insurance business) + Article 214 (social/unemployment insurance) + Article 215 (health insurance). Never cite Articles 211/212 for insurance fraud.
Four acts of insurance fraud subject to criminal handling
Clause 1 of Article 213 lists four constituent acts:
- (a) Colluding with insurance beneficiaries to settle insurance indemnities or pay insurance money unlawfully;
- (b) Forging documents or deliberately falsifying information to refuse indemnity/payment when the insured event has occurred — i.e., an insurer deliberately falsifying to deny a valid claim also constitutes the offence (the reverse direction, often overlooked);
- (c) Forging documents or deliberately falsifying information in claim dossiers;
- (d) Self-inflicting property or health damage to collect insurance benefits (except where otherwise prescribed by law — a statutory exception exists; do not absolutise).
Monetary thresholds and 3 penalty frames: from fines to 7 years’ imprisonment
| Frame | Conditions | Penalties |
|---|---|---|
| Clause 1 | Appropriating insurance money of VND 20 million to under 100 million, OR causing damage of VND 50 million to under 200 million, and not falling under Article 174 (fraudulent appropriation of property), Article 353 (embezzlement), Article 355 (abuse of position/power to appropriate property) | Fine of VND 30–100 million or non-custodial reform up to 03 years |
| Clause 2 | Organised commission; sophisticated or deceitful tricks; appropriation of VND 100–under 500 million; damage of VND 200 million–under 1 billion; dangerous recidivism | Fine of VND 100–300 million or imprisonment 01–03 years |
| Clause 3 | Appropriation of VND 500 million or more, or damage of VND 1 billion or more | Imprisonment 03–07 years |
| Clause 4 (additional) | — | Fine of VND 10–100 million; ban from holding positions, practising or doing certain jobs for 01–05 years |
The exclusion clause “if not falling under Articles 174, 353 and 355” draws the boundary between insurance fraud and fraudulent appropriation, embezzlement or abuse of position — the same forged dossier may be charged differently depending on the subject and purpose. Do not cite thresholds from the April 2025 draft circulating online (proposing to raise thresholds from 20→40 and 50→100 million) — the proposal was not adopted.
Can an insurance company face criminal prosecution?
Yes. Under Clause 5 of Article 213 combined with Article 76 of the Penal Code, a commercial legal entity committing insurance business fraud faces fines of:
- (a) Clause 1 acts with appropriation of VND 200 million–under 1 billion or damage of VND 400 million–under 2 billion: fine of VND 200 million–1 billion;
- (b) Offences under points a, b and dd of Clause 2, or appropriation of VND 1–under 3 billion, or damage of VND 2–under 5 billion: fine of VND 1–3 billion;
- (c) Clause 3 cases with appropriation of VND 3 billion or more or damage of VND 5 billion or more: fine of VND 3–7 billion;
- (d) Additionally may be banned from doing business, operating in certain sectors or raising capital for 01–03 years.
Note the higher thresholds for legal entities: individuals from VND 20/50 million (appropriation/damage); legal entities from VND 200/400 million.
Distinguishing: insurance business fraud (Art. 213) from related offences
- Article 214 — fraud in social insurance and unemployment insurance;
- Article 215 — fraud in health insurance (both guided by Resolution 05/2019/NQ-HDTP);
- Article 174 — fraudulent appropriation of property: applies when the conduct meets the fraud composition instead of insurance fraud (see the exclusion clause in Clause 1 of Article 213).
Administrative sanctions under Decree 174/2024/ND-CP
Below the criminal threshold, insurance business fraud is administratively sanctioned under Decree 174/2024/ND-CP (effective 15/2/2025; continuing in force from 01/01/2026 per Resolution 32/NQ-CP). Decree 98/2013/ND-CP (as amended by Decree 48/2018) has been replaced. Do not confuse Decree 46/2023 (guiding the Law on Insurance Business) with the sanctioning decree.
| Subject | Fine level |
|---|---|
| Individual committing one of the 4 Clause 1 Article 213 acts but below criminal level | VND 20–40 million (appropriation under 10 million or damage under 20 million); VND 40–60 million (appropriation of 10–under 15 million or damage of 20–under 30 million); VND 80–100 million (appropriation of 15–under 20 million or damage of 30–under 50 million) |
| Legal entity | VND 160–200 million for appropriation under VND 200 million or damage under VND 400 million, or below criminal level |
Remedial measure: mandatory return of appropriated money. Underlying law: the Law on Insurance Business (Law 08/2022/QH15, effective 01/01/2023), as amended by Law 139/2025/QH15.
Prevention: what insurers and policyholders should note
- Insurers: standardise claims-settlement procedures and keep full records of the grounds for denying payment — denying a valid claim without grounds when the insured event has occurred may constitute point b of Clause 1, Article 213;
- Agents and beneficiaries: no collusion, no forged documents in claim dossiers;
- Policyholders: truthfully declare property and health status; do not self-inflict damage to profit;
- In claim disputes, prioritise complaints, mediation and civil lawsuits before considering criminal denunciation — and conversely, when signs of a crime appear, collect evidence and report to competent authorities.
Need a claims-process review for your insurance business? Contact FLAT Law Firm for advice.
The information above is for reference only and does not constitute legal advice.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.