Proposal: Compulsory motorcycle insurance issuers must record hotline calls in Vietnam

1. Ministry of Finance responds to petition to abolish compulsory motorcycle insurance

On December 05, 2022, the Insurance Management and Supervision Department received a petition regarding the abolishment of compulsory motorcycle insurance. In response, the Insurance Management and Supervision Department has the following opinions:

Law on Insurance Business 2022 was recently passed by the National Assembly of Vietnam and takes effect from January 01, 2023. During the consultation process, there were some suggestions to reconsider compulsory motorcycle insurance. The Ministry of Finance of Vietnam reported and explained to the National Assembly of Vietnam. The law was passed with 94.18% approval from the National Assembly members, including provisions on compulsory motorcycle insurance. The legal basis, international experience, and practical implementation of compulsory motorcycle insurance are as follows:

- According to Clause 18, Article 3 of the Road Traffic Law:

18. Road motor vehicles (hereinafter referred to as motor vehicles) include automobiles..., two-wheeled motorcycles; three-wheeled motorcycles; mopeds (including electric motorcycles) and similar vehicles.

- According to Clause 2, Article 58 of the Road Traffic Law:

2. The driver must carry the following documents: d) Civil liability insurance certificate for motor vehicle owners.

- According to the Law on Insurance Business 2022:

1. Compulsory insurance means an insurance product or plan serving the purposes of protection of public interest, environment and social safety.

2. Classes of compulsory insurance, including:

a) Compulsory insurance against civil liability of vehicle owner;

...

5. The Government shall impose detailed regulations on conditions binding upon extent of cover, insurance premiums, minimum amounts required for compulsory insurance coverage prescribed in clause 2 of this Article.

- Most countries require compulsory motorcycle insurance. To ensure compliance, many countries such as India, Japan, and Singapore have established regulations making it illegal to participate in traffic without third-party civil liability insurance and may impose imprisonment for repeated violations.

- Compulsory motorcycle insurance has been implemented in Vietnam for over 30 years. Currently, motorbikes remain the primary mode of motorized transport and the leading cause of traffic accidents in Vietnam (accounting for 63.48% of accident causes).

2. Compulsory motorcycle insurance issuers must record hotline calls in Vietnam (Proposal)

At present, the Ministry of Finance of Vietnam is in the process of drafting a Decree on compulsory insurance. Based on practical conditions and suggestions from relevant parties, the Ministry of Finance has proposed that the Government of Vietnam amend some provisions related to compulsory civil liability insurance for motor vehicle owners as follows:

- Add a provision to reduce insurance premiums;

- Increase the humanitarian aid rate from 25% to 30%;

- Narrow the exclusion of insurance liability;- Continue to simplify insurance claim documents;

- Add a provision requiring insurers to record calls to hotlines to ensure the rights of policyholders and insured persons;

- Enhance the application of information technology in resolving compulsory third-party civil liability insurance claims for motorbikes and mopeds.

Diem My

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