The content of the Precedent No. 23/2018/AL in Vietnam

The content of the Precedent No. 23/2018/AL in Vietnam (Image from the Internet)

According to Decision No. 269/QD-CA of 2018, the Precedent No. 23/2018/AL on the validity of life insurance contracts when the policyholder fails to pay the insurance premium due to the insurer's fault has the following content:

Source of the Precedent:

Civil Appeal Judgment No. 538/2009/DS-PT dated March 31, 2009 of the People's Court of Ho Chi Minh City on the case of "Insurance contract dispute" between the plaintiff Ms. Pham Thi T and the defendant is P Life Insurance limited liability company; The person with related rights and obligations is Ms. Vu Thi Minh N.

Content location of the Precedent:

Paragraphs 4, 7, 8 of the "Court's Opinions" section.

Overview of the Precedent content:

- Precedent situation:

The life insurance request file shows that the insurance buyer chooses the method of collecting insurance premiums at the insurance buyer's home address. When the insurance premium payment deadline comes and during the premium payment extension period, the insurance company's staff does not come to collect the premium from the insurance buyer.

- Legal solutions:

In this case, it must be determined that the insurance buyer is not at fault for not paying the premium. A life insurance contract does not become invalid because the policyholder does not pay the insurance premium within the agreed period.

Legal provisions related to the Precedent:

Article 23 of the 2000 Law on Insurance Business was amended and supplemented in 2010.

Keywords of the Precedent:

“Life insurance contract”; “Validity of life insurance contract”; “Fee payment period”; “Extension of fee payment”.

CONTENTS OF THE CASE:

Plaintiff Ms. Pham Thi T presented: Her husband, Tran Huu L, registered to buy insurance from P Life Insurance limited liability company. Her husband died in an accident. According to the contract, she is the beneficiary. Now she asks the defendant to pay the insurance amount of 300 million VND and interest at the basic interest rate from August 2005 to present which is 126 million VND, a total of 426 million VND.

The defendant, P Life Insurance limited liability company, with an authorized representative, Mr. Nguyen Quoc T, presented: Mr. L must pay the second insurance premium on June 24, 2005, then it was extended for two more month but still not paid. Mr. L died on August 27, 2005, when the insurance contract had lapsed for 3 days. Therefore, the defendant did not accept to pay as requested by the plaintiff.

The person with related rights and obligations, Ms. Vu Thi Minh N, presented: She is the defendant's agent, sold insurance to Mr. L. She agreed with Mr. L that when the insurance premium collection period came, she would be on duty. collected the fees at Mr. L's house. But when the deadline for collecting the fees came, she had to go to political school in the province so she couldn't collect the fees. The failure to pay was due to objective reasons, so she requested the defendant to pay the plaintiff's insurance.

In the First Instance Civil Judgment No. 38/2008/DS-ST dated August 21, 2008 of the People's Court of District 1, Ho Chi Minh City decided:

1. Do not accept Ms. Pham Thi T's request for P Life Insurance limited liability company to pay insurance premium and interest due to late payment of 426,000,000 VND.

2. Regarding court fees: Ms. Pham Thi T must pay first-instance civil court fees of 7,890,000 VND, but is entitled to deduct the amount of advance paid court fees of 6,000,000 VND according to receipt No. 2185 dated September 9. -June 2006 of Ho Chi Minh City Civil Judgment Enforcement. Ms. T also has to pay 1,890,000 VND.

The first instance judgment also declared the litigants' right to appeal.

On September 1, 2008, Ms. Pham Thi T appealed.

At the appeal court

The plaintiff did not withdraw the lawsuit request and requested an appeal.

The litigants could not reach an agreement on resolving the lawsuit.

Ms. T presented her appeal request asking the Trial Council to accept her request to force P Life Insurance limited liability company to pay insurance and interest due to late payment of 426,000,000 VND. The reason is because the company's people did not come to collect the insurance money, not because she did not pay. The lawyer protecting Ms. T's legal rights and interests requested the Trial Council to accept Ms. T's request.

Mr. Nguyen Quoc T, representative of P Life Insurance limited liability company and a lawyer protecting legal rights and interests, requested the trial panel to affirm the first instance verdict.

COURT'S OPINION:

[1] After studying the documents in the case file and examining the evidence at the trial and based on the results of arguments at the trial, the Trial Council concluded:

[2] Regarding form: Ms. Pham Thi T's appeal was made within the legal limit and is valid.

[3] About content:

[4] Based on the life insurance request dossier (note 15-17), the address for P Life Insurance limited liability company to collect premiums is at house number 231, hamlet 3, commune B, district G, Ben Tre province is Mr. L's home. This is also consistent with the testimony of Ms. N, who is an insurance sales and fee collection agent of P Life Insurance limited liability company.

[5] Considering Ms. T's appeal request that Mr.

[6] Based on the confirmation from Commune B police, Mr. L died on August 27, 2005 due to carelessly falling and hitting his head, causing fatal brain injury.

[7] Considering that Mr. L has signed an insurance contract through the form of a life insurance request with an insurance level of 300,000,000 VND, the fact that Mr. L has not paid the second installment as analyzed above is not possible. It is Mr. L's fault, so Ms. T's appeal request forcing P Life Insurance limited liability company to pay the insurance money when Mr. L dies due to an accident is well-founded to accept.

[8] Considering the request of the representative of P Life Insurance limited liability company that Mr. L did not pay the second installment of insurance premium by August 24, 2005 and that Mr. 2005, so Mr. L's insurance contract had expired and was unfounded. Because as analyzed above, the reason Mr. L did not pay the insurance premium was because the company staff did not come to collect the premium. This is also clearly shown on page 5 of the information customers need to know, clearly stating that collecting fees at home includes collecting fees quarterly, every 6 months, annually, or the same address has 2 or more contracts, consistent with the case of Mr. L who bought 03 contracts of P Life Insurance limited liability company belonging to Mr. L, Ms. representing P Life Insurance limited liability company, as well as the proposal of a lawyer to protect the legal interests of P Life Insurance limited liability company.

[9] Considering Ms. T's request to force P Life Insurance limited liability company to pay late payment interest from August 27, 2005 to the date of trial by the Court, is unfounded. so the Trial Council did not accept this request of Ms. T.

[10] Therefore, the Trial Panel partially accepted Ms. T's appeal request, amending the first instance judgment to force P Life Insurance limited liability company to pay insurance money under the accidental death contract. Mr. L's is 300,000,000 VND and the beneficiary is Mrs. T.

[11] First instance civil court fees must be paid by Ms. T and P Life Insurance limited liability company according to the provisions of Clause 2, Article 7 of Decree 70/CP. Specifically, Ms. T must pay court fees on the unacceptable interest amount of 6,040,000 VND. P Life Insurance Limited Liability Company must pay court fees on the amount paid to Ms. T of VND 12,000,000.

[12] Due to the correction of the first instance judgment, Ms. T does not have to pay the civil appeal court fees as prescribed in Clause 2, Article 132 of the Civil Procedure Code.

Because of the above reasons,

DECISION:

Apply Clause 2, Article 275 of the Civil Procedure Code.

Judgment:

- Partially accept the appeal request of Ms. Pham Thi T.

- Amend First Instance Judgment No. 38/2008/DS-ST dated August 21, 2008 of the People's Court of District 1, Ho Chi Minh City.

1. Accept part of Ms. Pham Thi T's request.

* Force P Life Insurance Limited Liability Company to pay an insurance premium of 300,000,000 VND (Three hundred million VND) to Ms. Pham Thi T immediately after the judgment takes legal effect.

* From the date of the plaintiff's application for judgment enforcement, if the defendant does not execute the above amounts, he/she must pay interest at the basic interest rate prescribed by the State Bank corresponding to the unpaid period. 

2. Regarding first instance civil court fees: Ms. Pham Thi T must pay court fees of 6,040,000 VND (Six million and forty thousand VND), but will be deducted the amount of advance paid court fees of 6,000,000 VND. (Six million VND) according to collection receipt No. 002185 dated June 9, 2006 of Ho Chi Minh City Civil Judgment Enforcement. Ms. T also has to pay 40,000 VND (Forty thousand VND).

P Life Insurance Limited Liability Company must pay a court fee of 12,000,000 VND (Twelve million VND).

3. Ms. T does not have to pay the appeal civil court fees. She will refund to Ms. T 50,000 VND (Fifty thousand VND) of the court fee advance according to receipt number 004852 dated September 9, 2008 of Civil Judgment Enforcement District 1, Ho Chi Minh City.

The appellate judgment takes legal effect from the date of pronouncement.

CONTENTS OF THE PRECEDENT

“[4] Based on the life insurance request dossier (note 15-17), it shows that the address for P Life Insurance limited liability company to collect premiums is at house number 231, hamlet 3, commune B, District G, Ben Tre province is Mr. L's home. This is also consistent with the testimony of Ms. N, who is an insurance sales and fee collection agent of P Life Insurance limited liability company.

[7] Considering that Mr. L has signed an insurance contract through the form of a life insurance request with an insurance level of 300,000,000 VND, the fact that Mr. L has not paid the second installment as analyzed above is not possible. It is Mr. L's fault, so Ms. T's appeal request forcing P Life Insurance limited liability company to pay the insurance money when Mr. L dies due to an accident is well-founded to accept.

[8] Considering the request of the representative of P Life Insurance limited liability company that Mr. L did not pay the second installment of insurance premium by August 24, 2005 and Mr. L died on August 27, 2005, so Mr. L's insurance contract had expired and was unfounded. Because as analyzed above, the reason Mr. L did not pay the insurance premium was because the company staff did not come to collect the premium. This is also clearly shown on page 5 of the information customers need to know, clearly stating that collecting fees at home includes collecting fees quarterly, every 6 months, annually, or the same address has 2 or more contracts, consistent with the case of Mr. L who bought 03 contracts of P Life Insurance limited liability company belonging to Mr. L, Mrs. T, Mrs. H. Therefore, the Trial Council did not accept the request of the representative of P Life Insurance limited liability company, as well as the proposal of the lawyer to protect the legal rights and interests of the P Life Insurance limited liability company.”

Above is the content of Precedent No. 23/2018/AL on the validity of a life insurance contract when the insurance buyer does not pay the insurance premium due to the insurance company's fault.

In addition, you can refer to the comprehensive list of 39 Precedents published and applied in Vietnam (The latest) here.

Best regards!