From what sources is motor vehicle insurance fund in Vietnam formed? What is the motor vehicle insurance fund used for?
From what sources is motor vehicle insurance fund in Vietnam formed?
Pursuant to Article 25 of Decree No. 03/2021/ND-CP stipulating as follows:
Sources of motor vehicle insurance fund
1. Contribution of insurance enterprises permitted to implement compulsory civil liability insurance of motor vehicle users.
2. Interests from deposits.
3. Excess of motor vehicle insurance fund of the previous year permitted to be retained for the following year.
4. Contributions and financing of organizations and individuals.
5. Other legal revenues (if any).
Thus, the motor vehicle insurance fund is formed from the following sources:
- Contribution of insurance enterprises permitted to implement compulsory civil liability insurance of motor vehicle users.
- Interests from deposits.
- Excess of motor vehicle insurance fund of the previous year permitted to be retained for the following year.
- Contributions and financing of organizations and individuals.
- Other legal revenues (if any).
From what sources is motor vehicle insurance fund in Vietnam formed? What is the motor vehicle insurance fund used for?
What are the responsibilities of the motor vehicle insurance fund contribution?
Pursuant to Article 26 of Decree No. 03/2021/ND-CP stipulating as follows:
Contribution to motor vehicle insurance fund
1. Insurance enterprises are responsible for extracting up to 1% of total insurance premiums of compulsory civil liability insurance of motor vehicle users collected from principal insurance contracts in the previous financial year to contribute to motor vehicle insurance fund.
2. Before April 30 each year, Ministry of Finance shall declare rate of contribution to motor vehicle insurance fund at request of the IAV.
3. Insurance enterprises implementing compulsory civil liability insurance of motor vehicle users shall contribute to accounts of motor vehicle insurance fund as follows:
a) Before June 30 each year: Submit 50% of the total amount as per the law.
b) Before December 31 each year: Submit the remaining amount as per the law.
4. Insurance enterprises are responsible for preparing and submitting reports on insurance premium revenues of compulsory civil liability insurance of motor vehicles to the IAV (both hard and soft copies) using form under Annex I attached to this Decree within 90 days after the year ends.
Thus, insurance enterprises are responsible for extracting up to 1% of total insurance premiums of compulsory civil liability insurance of motor vehicle users collected from principle insurance contracts in the previous financial year to contribute to motor vehicle insurance fund.
What is the motor vehicle insurance fund used for?
Pursuant to Clause 1, Article 27 of Decree No. 03/2021/ND-CP stipulating as follows:
Expenditure incurred by motor vehicle insurance fund
1. Motor vehicle insurance fund shall be used for:
a) Performing humanitarian purposes, to be specific:
In case vehicles that cause accidents cannot be identified, vehicles are not benefitting from insurance and cases of exclusion of insurance liabilities according to Article 13 of this Decree (other than damage done intentionally by motor vehicle users, operators or accident victims): 30% of insurance liabilities as per the law/person/case in accidents with fatalities; 10% of insurance liabilities as per the law/person/case in case of bodily injuries receiving emergency medical treatment.
Once insurance enterprises have paid advance compensation according to Point b Clause 2 Article 14 of this Decree, Board for operating motor vehicle insurance fund are responsible for reimbursing the advance payment incurred by the insurance enterprises in case accidents are identified to be within insurance liability exclusion or in case the advance payment exceeds insurance claims when the accidents are within scope of compensation.
b) Preventing and remediating traffic accidents.
c) Publicizing and educating on road traffic and compulsory civil liability insurance of motor vehicle users.
d) Assisting police authorities financially in cooperating with the IAV, Council for managing motor vehicle insurance fund and non-life insurance enterprises in preventing, remediating and anti-fraud in insurance business and compulsory civil liability insurance of motor vehicle users.
d) Commending organizations and individuals with merits in implementing compulsory civil liability insurance of motor vehicle users, preventing and remediating damage, traffic accidents and ensuring road traffic safety.
e) Finishing and maintaining operation of database on compulsory civil liability insurance of motor vehicle users.
g) Financing operation of ASEAN Program for compulsory motor insurance and operation of Vietnamese agency implementing Protocol No. 5 on ASEAN Program for compulsory motor insurance.
h) Managing motor vehicle insurance fund: Salary, allowances and salary-based payments (social insurance, health insurance, unemployment insurance, union fees) and commendation for employees of offices of motor vehicle insurance fund; responsibility allowances for individuals holding managerial positions in motor vehicle insurance fund and part-time employees of offices of motor vehicle insurance fund; renting offices, purchasing equipment, spending on banking and post services; hiring auditors; spending on operational costs and organizing meetings of motor vehicle insurance fund.
Thus, the motor vehicle insurance fund is used for the above purposes.
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