What are regulations on payment and final settlement of premiums of compulsory insurance for professional liabilities for investment consultancy services in Vietnam?

What are regulations on payment and final settlement of premiums of compulsory insurance for professional liabilities for investment consultancy services in Vietnam?

Pursuant to Clause 4 and 5, Article 17 of the Circular 50/2022/TT-BTC stipulating as follows:

4. The payment of premiums of compulsory insurance for professional liabilities for construction and investment consultancy services shall follow Circular No. 50/2017/TT-BTC.

5. The final settlement of insurance premiums shall be based on the value of the final settlement of the construction survey and construction design consultancy contract, specifically:

a) If the value of the final settlement of the construction survey and construction design consultancy contract increases compared to the value of the estimate approved by competent authorities when concluding the insurance policy, the insurance premium shall increase correspondingly. The policyholder shall pay the missing insurance premium to the insurer within 30 days after receiving documents on approval of the value of the final settlement of the construction contract issued by competent authorities.

b) If the value of the final settlement of the construction survey and construction design consultancy contract decreases compared to the value of the estimate approved by competent authorities when concluding the insurance policy, the insurance premium shall decrease correspondingly. The insurer shall pay the overpaid insurance premium to the policyholder within 30 days after the date the insurer receives documents on approval of the value of the final settlement of the construction work issued by competent authorities from the policyholder.

Which entities shall have responsibilities to purchase compulsory insurance for professional liabilities for professional liabilities for investment consultancy services in Vietnam?

Pursuant to Article 18 of the Circular 50/2022/TT-BTC stipulating as follows:

Advisory contractors shall purchase compulsory insurance for professional liabilities for construction and investment consultancy services when providing such services.

What are indemnification principles regarding compulsory insurance for professional liabilities for professional liabilities for investment consultancy services in Vietnam?

Pursuant to Article 19 of the Circular 50/2022/TT-BTC stipulating as follows:

1. Insurers shall indemnify advisory contractors for the amounts that such advisory contractors are responsible for indemnifying for losses of third parties and relevant costs according to regulations of the law, specifically:

a) Losses of third parties and related costs generated by negligent actions of the insured as a result of the implementation of construction surveys and construction design within the scope of insurance.

b) Indemnification request of third parties (from an insurance event) regarding the insured and have been notified to insurers by policyholders within the insurance duration, including expenses to be paid to lawyers appointed by insurers or the insured (with the written consent of insurers), other fees and charges generated from the investigation, correction, and defense related to insurance events but not including the salary to be paid to workers or managers concluding labor contracts with the insured.

c) Other relevant costs according to regulations of the law.

2. The total liability of insurers for all indemnification requests during the insurance duration shall not exceed the insurance payout agreed on in insurance policies.

3. If policyholders conclude compulsory insurance policies for professional liabilities for construction and investment consultancy services during construction time with 2 or more insurers to insure the same subject, with the same conditions and insurance events, when insurance events occur, each insurer is only responsible for indemnification according to the ratio between the agreed insurance payout to the total insurance payout of all insurance policies concluded by policyholders.

4. Insurers are not responsible for indemnifying the amounts that occurred or increased due to acts of insurance fraud according to regulations of the Criminal Code.

5. When there are indemnification requests from third parties, policyholders and insurers shall cooperate in settling the indemnification as follows:

a) Policyholders shall:

- Immediately notify insurers via means of communication and notify insurers in writing of such matters within 14 days after receiving indemnification requests from third parties.

- Adopt every measure within their capacity to minimize losses.

- Provide documents in indemnification documents according to regulations prescribed in Clauses 1, 2, 3, 4, 5, and 7 of Article 20 of this Circular and facilitate insurers during the process of verifying such documents.

- Implement, cooperate, and permit insurers to perform actions and measures that are necessary or requested by insurers to protect the rights of insurers after the indemnification of losses subject to indemnification responsibilities according to regulations of this Circular.

b) Insurers shall:

- Conduct loss assessment according to regulations of the law and prepare records of the assessment of causes and the extent of damage according to regulations prescribed in Clause 6 Article 20 of this Circular.

- Guide and cooperate with policyholders and relevant agencies, organizations, and individuals in sufficiently collecting documents to prepare indemnification documents.

- Cooperate with policyholders in settling requests for loss indemnification of third parties subject to insurance responsibilities when insurance events occur.

- In case of accepting the indemnification, insurers shall prepare written notifications on the indemnification.

- In case of refusing the indemnification, insurers shall provide explanations in writing.

Best regards!