What are the regulations on premiums and deductibles of compulsory fire and explosion insurance in Vietnam under Decree 67/2023/ND-CP?
- What are the regulations on premiums and deductibles of compulsory fire and explosion insurance in Vietnam under Decree 67/2023/ND-CP?
- What are the cases where insurers shall not provide indemnities for compulsory fire and explosion insurance in Vietnam?
- What are the insured entities of compulsory fire and explosion insurance in Vietnam according to the provisions of Decree 67/2023/ND-CP?
What are the regulations on premiums and deductibles of compulsory fire and explosion insurance in Vietnam under Decree 67/2023/ND-CP?
Pursuant to the provisions in Article 26 of Decree 67/2023/ND-CP as follows:
Insurance premiums and deductibles
1. If the total sum insured of property 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 may increase or decrease the insurance premiums by up to 25% according to the risk level of the insured.
In case the insured is the direct cause of higher indemnities 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 actuaries of the insurers and independent audit organizations, upon renewal of insurance policies, the insurers and policyholders may negotiate insurance premiums and deductibles to ensure the solvency of the insurers.
2. If the total sum insured of property 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 negotiate insurance premiums and deductibles on the basis of evidence proving approval by the major foreign reinsurers. Major foreign reinsurers and foreign reinsurers assuming 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 premiums prescribed in Clause 1 Section I Annex II enclosed herewith.
3. For nuclear facilities: Insurers and policyholders may negotiate rules, terms, insurance premiums and deductibles on the basis of evidences proving that the major foreign reinsurers accept reinsurance in accordance with rules, terms, insurance premiums and deductibles provided by insurers to policyholders. The major foreign reinsurers and foreign reinsurers assuming from 10% of total insurance coverage of each reinsurance policy shall satisfy the regulations in Clause 9 Article 4 hereof.
Thus, the premiums and deductibles of compulsory fire and explosion insurance are divided into 03 cases and implemented according to the above regulations.
What are the regulations on premiums and deductibles of compulsory fire and explosion insurance in Vietnam under Decree 67/2023/ND-CP? (Image from the Internet)
What are the cases where insurers shall not provide indemnities for compulsory fire and explosion insurance in Vietnam?
Pursuant to the provisions of Article 25 of Decree 67/2023/ND-CP, insurers shall not provide indemnities in the following cases:
(1) For facilities facing fire and explosion hazards
- Earthquakes, volcanic eruptions or other convulsions of nature.
- Damage caused by political convulsions, social safety, security and order events.
- Property that is burned and exploded according to decisions of competent regulatory agencies.
- Self-fermenting and self-heating products; property subjected to a heat treatment.
- Damage caused by 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) Insurance exclusions for nuclear facilities:
Insurers and policyholders shall negotiate insurance exclusions on the basis of approvals of reinsurers.
What are the insured entities of compulsory fire and explosion insurance in Vietnam according to the provisions of Decree 67/2023/ND-CP?
Pursuant to Article 23 of Decree 67/2023/ND-CP, there are regulations on insured entities 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, construction works and property attached thereto; machinery and equipment.
b) Goods and supplies (including raw materials, semifinished products and finished products).
2. The insured and locations of the insured must be specified in insurance policies and insurance certificates.
Thus, according to the above regulations, the subject of compulsory fire and explosion insurance is all assets of the facility that are at risk of fire and explosion.
Specifically, including:
- Houses, buildings and assets attached to houses and buildings; devices.
- All types of goods and supplies (including raw materials, semi-finished products, and finished products).
The insured object and its location must be clearly stated in the insurance contract and Insurance Certificate.
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