07:47 | 18/04/2023

If the policyholder deliberately provides inadequate information, does the insurer have the right to nullify the insurance contract in Vietnam?

I would like to ask if the policyholder deliberately provides inadequate information, does the insurer have the right to nullify the insurance contract in Vietnam? - Question from Ms. Tran (Long An)

If the policyholder deliberately provides inadequate information, does the insurer have the right to nullify the insurance contract in Vietnam?

Pursuant to Article 22 of the 2022 Law on Insurance Business in Vietnam stipulating as follows:

Responsibilities and legal consequences for breach of information disclosure obligations
1. When entering into insurance contracts, insurers and foreign non-life insurers’ branches shall have the burden of providing full and accurate information related to insurance contracts; give explanations about contractual terms and conditions to policyholders. Meanwhile, policyholders shall have the burden of providing full and accurate information related to subject matters of insurance for insurers and foreign non-life insurers’ branches.
2. Where any policyholder deliberately provides inadequate or untrue information with the aim of concluding an insurance contract to receive insurance indemnity or coverage, the insurer or foreign non-life insurer’s branch may nullify the insurance contract. To such extent, the insurer or the foreign non-life insurer’s branch shall not be obliged to pay insurance indemnity or coverage and must reimburse insurance premiums that the policyholder pays after deducting reasonable expenses (if any) under contractual terms and conditions. The policyholder is bound to compensate for any possible loss that the insurer or the foreign non-life insurer's branch incurs due to such act.
3. Where the insurer or the foreign non-life insurer’s branch deliberately fails to discharge its information disclosure obligations or provides untrue information with the intention of obtaining the insurance contract, the policyholder can terminate the insurance contract and be repaid insurance premiums. The insurer or the foreign non-life insurer’s branch is bound to compensate for any loss that the policyholder may suffer due to such act.

Thus, when entering into insurance contracts, where any policyholder deliberately provides inadequate with the aim of concluding an insurance contract to receive insurance indemnity or coverage, the insurer or foreign non-life insurer’s branch may nullify the insurance contract.

At the same time, if there is damage, the policyholder must compensate the damage incurred to the insurer.

If the policyholder deliberately provides inadequate information, does the insurer have the right to nullify the insurance contract in Vietnam?

If the policyholder deliberately provides inadequate information, does the insurer have the right to nullify the insurance contract in Vietnam?

If the policyholder defaults on insurance premiums by the agreed due date, can the insurer unilaterally terminate the insurance contract in Vietnam?

Pursuant to the provisions of Article 26 of the 2022 Law on Insurance Business in Vietnam stipulating as follows:

Unilateral termination of insurance contracts
The insurer, the foreign non-life insurer’s branch or the policyholder may unilaterally terminate the insurance contract in the following cases:
1. The policyholder defaults on insurance premiums or does not pay insurance premiums in full by the agreed due date or after the extended due date;
2. The insurer, the foreign non-life insurer’s branch or the policyholder does not accept the request for change in the level of insurable risk under Article 23 herein;
3. The insured fails to apply safety measures to protect subject matters insured as provided in clause 3 of Article 55 herein;
4. The policyholder disagrees to transfer the portfolio of insurance contracts prescribed in clause 4 of Article 92 herein.

According to the above provisions, in case the policyholder defaults on insurance premiums by the agreed due date, the insurer has the right to unilaterally terminate the insurance contract.

When is the insurance contract made null and void?

Pursuant to the provisions of Article 25 of the 2022 Law on Insurance Business in Vietnam stipulating as follows:

Null and void insurance contracts
1. An insurance contract shall be made null and void in the following cases:
a) The policyholder has no insurable interest at the time of conclusion of an insurance contract;
b) No subject matter of insurance exists at the time of conclusion of an insurance contract;
c) At the time of conclusion of the insurance contract, the policyholder has the knowledge of the policy event that occurs;
d) Objectives and contents of an insurance contract are in contravention of prohibition clauses and social ethics;
dd) The insurer, the foreign non-life insurer’s branch and the policyholder enter into the fraudulent insurance policy;
e) The policyholder is a minor; the person who is incapable of civil acts; the person who have cognitive and behavioral difficulties; the person whose capacity to perform civil acts is restricted;
g) When being entered into, an insurance contract contains any confusion that causes one or more parties to fail to achieve the purposes of entering into that contract, unless the contractual purposes of the contracting parties have been achieved, or the contracting parties can take immediate remedial actions against such confusion to make the purposes of entering into the contract successfully achieved;
h) The insurance contract is concluded by fraud, except as provided in Article 22 herein;
i) The insurance contract is concluded under threat or pressure;
k) The policyholder lives with health condition related to cognitive disability and impulse control disorder when entering into the insurance contract;
l) The insurance contract is in contravention of regulations on presentation of insurance contracts laid down in Article 18 herein.
2. When an insurance contract is null and void, it is no longer in effect from the date of conclusion. The insurer or the foreign non-life insurer’s branch and the policyholder shall be obliged to return what they have received to each other. The party at fault must be liable to pay compensation.

Thus, the insurance contract shall be made null and void in one of the above cases.

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