Vietnam: Agricultural insurance and regulations to know

“Agricultural co-insurance” means two or multiple insurers signing an agricultural insurance policy with the policyholder in order to insure an insured agricultural product according to the same policy wording and premiums.

Contents of the agricultural insurance policy

In addition to the contents specified in the Law on Insurance Business, the policyholder and the insurer shall agree upon and specify the following contents in the agricultural insurance policy:

- Name and address of the individual and affiliated entity of the insurer that is responsible for addressing the issues concerning execution of the agricultural insurance policy.

- Methods for determining the sum insured.

- Cases in which deductible and deduction of the indemnity (if any) are applied.

- Loss survey; loss surveyor; loss survey costs.

- Determination of insured event, grounds for providing indemnity; cases in which indemnity is provided according to the notice or confirmation of disasters or diseases given by a competent authority; cases in which index-based insurance is provided/purchased, specific agreement on the indexes directly related to loss of the subject matter insured; the authority that determines the difference between the actual index and the index insured; methods for determining the indemnity.

- Methods for providing indemnity; indemnity claim (specifying agreement on responsibility of the policyholder or the insured documents for providing necessary documents for the insurer); time limit for providing indemnity.

- Responsibilities of parties for risk management and loss prevention and minimization, and prevention and fight against insurance fraud in accordance with regulations of this Decree.

- Responsibilities of the insurer and the insured for complying with all technical procedures and standards in agricultural production (if any).

The insurance policy signed between the entity eligible for assistance in the agricultural insurance premium and the insurer shall be executed as prescribed in Decree No. 58/2018/NĐ-CP of Vietnam’s Government.

Agricultural reinsurance indemnity

According to Decree No. 58/2018/NĐ-CP of Vietnam’s Government, upon occurrence of an insured event, the insurer shall provide indemnity under the agricultural insurance policy and regulations of law. In which:

The indemnity paid by the insurer to the insured shall be determined according to the market value of the subject matter insured at the time and place where the loss is incurred and the degree of actual loss, unless otherwise provided in the insurance policy. In the case of index-based insurance, the insurer shall provide indemnity to the insured according to the change in the actual index compared to the index specified in the insurance policy and regulations of law.

The indemnity paid by the insurer to the insured must not exceed the sum insured, unless otherwise provided in the insurance policy.

Dispute settlement

Any dispute that arises during execution of the agricultural insurance policy shall be initially settled under the insurance policy, regulations of the Law on Insurance Business and relevant regulations of law.

In case of failure to settle the dispute by negotiation, relevant parties may bring the case to a Vietnamese competent Court.

Decree No. 58/2018/NĐ-CP of Vietnam’s Government takes effect from June 05, 2018.

-Thao Uyen-

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