Vietnam: What is the insured of compulsory fire and explosion insurance under Decree 67/2023/ND-CP?
- What is the insured of compulsory fire and explosion insurance in Vietnam under Decree 67/2023/ND-CP?
- What are the regulations on compulsory fire and explosion insurance premiums and deductibles in Vietnam?
- What are the liability insurance exclusions of compulsory fire and explosion insurance in Vietnam?
What is the insured of compulsory fire and explosion insurance in Vietnam under Decree 67/2023/ND-CP?
Pursuant to Decree 67/2023/ND-CP dated September 6, 2023 on compulsory civil liability insurance of motor vehicle users, compulsory fire and explosion insurance, and compulsory insurance for construction investment activities as follows:
Pursuant to Article 23 of Decree 67/2023/ND-CP on the insured of compulsory fire and explosion insurance as follows:
Insured entities
1. The insured of compulsory fire and explosion insurance is the entire property of facilities facing fire and explosion hazards, including:
a) Houses, works and assets attached to houses, works; machinery and equipment.
b) Goods and supplies (including raw materials, semi-finished products and finished products).
2. The insured and locations of the insured must be specified in insurance policies and insurance certificates.
Thus, the insured of compulsory fire and explosion insurance is the entire property of facilities facing fire and explosion hazards, including:
- Houses, works and assets attached to houses, works; machinery and equipment.
- Goods and supplies (including raw materials, semi-finished products and finished products).
The insured and locations of the insured must be specified in insurance policies and insurance certificates.
What are the regulations on compulsory fire and explosion insurance premiums and deductibles in Vietnam?
Pursuant to the provisions of Article 26 of Decree 67/2023/ND-CP as follows:
Insurance premiums and deductibles
If the total sum insured of assets situated in a location of a single facility facing fire and explosion hazards (excluding nuclear facilities) is less than VND 1.000 billion, insurance premiums and deductibles are provided for in Clause 1 Section I Annex II and Clause 1 Section II Annex II enclosed herewith.
Insurers and policyholders may increase or decrease by up to 25% of insurance premiums applied to the insured according to its risk level.
In case the insured is the direct cause of a difference in expenditures for insurance coverage higher than principal insurance premiums collected from compulsory insurance for compulsory fire and explosion insurance in the immediately preceding fiscal year, on the basis of data verified by professional calculators of insurers and independent audit organizations, upon renewal of insurance policies, insurers and policyholders may reach agreements on insurance premiums and deductibles that ensures underwriting capacity of insurers.
2.If the total sum insured of assets situated in a location of a single facility facing fire and explosion hazards (excluding nuclear facilities) is VND 1.000 billion or more:
Insurers and policyholders may reach agreements on insurance premiums and deductibles on the basis of evidence proving that foreign insurers holding the first rank in assuming reinsurance verify the assumption of reinsurance. Foreign insurers holding the first rank in assuming reinsurance and foreign insurers assuming reinsurance of from 10% of total insurance coverage of each reinsurance policy shall satisfy the regulations in Clause 9 Article 4 hereof. In any case, insurance premiums shall not be lower than the amounts equal VND 1.000 billion multiplied (x) by 75% of insurance rates prescribed in Clause 1 Section I Annex II enclosed herewith.
3. For nuclear facilities: Insurers and policyholders may reach agreements on rules, terms, insurance premiums and deductibles on the basis of evidences proving that foreign insurers holding the first rank in assuming reinsurance verify the assumption of reinsurance in accordance with rules, terms, insurance premiums and deductibles provided by insurers to policyholders. Foreign insurers holding the first rank in assuming reinsurance and foreign insurers assuming reinsurance of from 10% of total insurance coverage of each reinsurance policy shall satisfy the regulations in Clause 9 Article 4 hereof.
Thus, compulsory fire and explosion insurance premiums and deductibles in Vietnam are divided into 03 cases and comply with the above regulations.
What are the liability insurance exclusions of compulsory fire and explosion insurance in Vietnam?
Pursuant to the provisions of Article 25 of Decree 67/2023/ND-CP, the liability insurance exclusions of compulsory fire and explosion insurance in Vietnam are prescribed as follows:
(1) Liability insurance exclusions for facilities facing fire and explosion hazards in accordance with regulations of law on fire prevention and fighting (excluding nuclear facilities):
Insurers shall not provide coverage in the following cases:
- Earthquakes, volcanic eruptions or other convulsions of nature.
- Damage caused by political convulsions, social safety, security and order events.
- Assets that are burned and exploded according to decisions of competent regulatory agencies.
- Self-fermenting and self-heating products; assets subjected to a heat treatment.
- Damage caused by a direct hit of lightning strike without causing fire or explosion.
- Fire and explosion caused by weapons-grade nuclear materials.
- Damage to electrical machinery and equipment or components of electrical equipment caused by direct impact of over-running, excessive pressure, short-circuiting, self-heating, arcing or leakage of electricity arising from whatever cause, lightning included.
- Damage caused by arson attack of the insured or by deliberate violation against fire safety regulations causing fire or explosion.
- Damage to data, software and computer programs.
- Damage caused by acts of burning forests, bushes, prairies or clearing lands by fire.
(2) Liability insurance exclusions for nuclear facilities:
Insurers and policyholders shall agree on insurance exclusions on the basis of approvals of insurers assuming reinsurance.
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