Vietnam: What are the compulsory fire and explosion insurance transfer rates for fire prevention and fighting purposes?
- What are the compulsory fire and explosion insurance transfer rates for fire prevention and fighting purposes in Vietnam?
- What are the regulations on the management and use of revenues from compulsory fire and explosion insurance in Vietnam?
- What are the principles of compulsory fire and explosion insurance indemnification in Vietnam?
What are the compulsory fire and explosion insurance transfer rates for fire prevention and fighting purposes in Vietnam?
Pursuant to the provisions in Article 30 of Decree 67/2023/ND-CP as follows:
Compulsory fire and explosion insurance transfer rates for fire prevention and fighting purposes
1. In a fiscal year, an insurer that provides compulsory fire and explosion insurance shall transfer 1% of the total premium for compulsory fire and explosion insurance that is collected from its principal insurance policy in the immediately preceding fiscal year.
2. The insurer shall annually submit the amount specified in Clause 1 of this Article to the Fire and Rescue Police Department’s account opened at the State Treasury by the Ministry of Public Security. To be specific:
a) Before June 30 of each year: Transfer 50% of the total amount prescribed in Clause 1 of this Article.
b) Before December 31 of each year: Transfer the remaining amounts prescribed in Clause 1 of this Article.
Thus, under the above regulations, in a fiscal year, an insurer that provides compulsory fire and explosion insurance shall transfer 1% of the total premium for compulsory fire and explosion insurance that is collected from its principal insurance policy in the immediately preceding fiscal year.
Accordingly, the insurer shall annually submit the collected amount to the Fire and Rescue Police Department’s account opened at the State Treasury by the Ministry of Public Security.
What are the regulations on the management and use of revenues from compulsory fire and explosion insurance in Vietnam?
Pursuant to the provisions in Article 31 of Decree 67/2023/ND-CP as follows:
Regulations on management and use of revenues from compulsory fire and explosion insurance
1. Revenues from compulsory fire and explosion insurance must be managed and used in a transparent manner and for the right purposes according to regulations herein and regulations of relevant law.
2. Revenues from compulsory fire and explosion insurance for fire prevention and fighting purposes shall be used as follows:
a) Providing assistance in purchase of fire prevention and fighting equipment for fire police forces: Up to 65% of the premiums collected by the insurer from compulsory fire and explosion insurance in the fiscal year. The purchase of fire prevention and fighting equipment shall comply with regulations of law on procurement.
b) Providing assistance in dissemination of law and knowledge about fire prevention and fighting and compulsory fire and explosion insurance: Up to 15% of the premiums collected by the insurer from compulsory fire and explosion insurance in the fiscal year. Items and rates of expenditure for dissemination of law and knowledge shall comply with regulations of law on management, use and statement of guarantees for law dissemination and education work.
c) Providing assistance for fire police forces in fire investigation; provision of professional training and inspection of fire safety; supervision of participation in compulsory fire and explosion insurance by facilities facing fire and explosion hazards: up to 15% of the premiums collected by the insurer from compulsory fire and explosion insurance in the fiscal year. Expenditure items and rates shall comply with applicable expenditure regulations.
d) Providing assistance in rewarding organizations and individuals directly engaging and cooperating in fire prevention and fighting: Up to 5% of the premiums collected by the insurer from compulsory fire and explosion insurance in the fiscal year. Where:
Regular expenditures for commendation shall comply with regulations of law on emulation and commendation.
In case of irregular expenditures for organizations and individuals directly engaging in fire prevention and fighting, the Minister of Public Security shall decide specific cases eligible for irregular commendation and commendation amounts based on achievements of organizations and individuals and revenues from compulsory fire and explosion insurance.
3. At the same time with the time when annual state budget estimates are made, the Ministry of Public Security shall made an estimate of revenues from compulsory fire and explosion insurance, consolidate it into the estimate of the Ministry of Public Security, then submit it to the Ministry of Finance according to regulations of the Law on State Budget and guiding documents for consolidation and monitoring.
4. The management and use of collected premiums shall comply with applicable regulations, norms and standards. The Ministry of Public Security shall consider, approve and verify annual statements of premiums collected from compulsory fire and explosion insurance for affiliated units; consolidate them into other revenues that are remained and prepare annually final accounts, and submit them to the Ministry of Finance together with final accounts of state budget for consolidation and monitoring.
5. The amount collected from compulsory fire and explosion insurance for fire prevention and fighting purposes that remain after completing the tasks specified in Clause 2 of this Article at the end of the year shall be carried over the succeeding year. After 5 years, if premiums collected from compulsory fire and explosion insurance are not expended all, the Ministry of Public Security shall take charge and cooperate with the Ministry of Finance in reviewing and assessing revenues from compulsory fire and explosion insurance, reporting the Government for adjusting transfer ratios accordingly.
Thus, revenues from compulsory fire and explosion insurance in Vietnam must be managed and used in a transparent manner and for the right purposes according to the above contents.
What are the principles of compulsory fire and explosion insurance indemnification in Vietnam?
Pursuant to the provisions in Article 28 of Decree 67/2023/ND-CP as follows:
Principles of indemnification
Insurers shall consider and settle insurance claims according to regulations of law on insurance business and the following principles:
1. When losses to facilities facing fire and explosion hazards are incurred, policyholders shall immediately notify insurers via contract information means, then submit written notifications to insurers within 14 days from the date on which such losses are incurred.
2. Insurance indemnities for damaged property shall not exceed the sums insured of such property (agreed and specified in insurance policies and insurance certificates) minus the deductibles prescribed in Clause 3 of this Article.
3. A deductible of up to 20% of insurance indemnities shall be provided if facilities facing fire and explosion hazards fail to fully comply with proposals on records on fire safety inspection issued by competent public security authorities within the prescribed period, thereby leading to an increase in damages caused by fire and explosion.
Thus, insurers in Vietnam shall consider and settle insurance claims according to regulations of law on the insurance business and the above principles.
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