Organizational structure for management and operation of motor vehicle fund in Vietnam

Organizational structure for management and operation of motor vehicle fund in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is motor vehicle insurance fund?

Motor vehicle insurance fund refers to fund established to make humanitarian payments; prevent and limit damage and road traffic accidents; publicize and educate on road traffic safety, compulsory civil liability insurance of motor vehicles and relevant activities to protect public interest and ensure social safety.

(Clause 1, Article 24 of Decree 03/2021/ND-CP)

2. Organizational structure for management and operation of motor vehicle fund in Vietnam

According to Article 6 of Circular 04/2021/TT-BTC, organizational structure for management and operation of motor vehicle fund is as follows:

(1) Council for managing motor vehicle fund consists of:

- Chairperson of Council for managing motor vehicle fund: Chairperson of the IAV.

- Members:

+ Representatives of Agency for Insurance Supervisory and Management - Ministry of Finance.

+ Representatives of Traffic Police Department - Ministry of Public Security.

+ General Secretary of the IAV.

+ General Director or Deputy General Director of at least 3 non-life insurance enterprises permitted to implement compulsory civil liability insurance of motor vehicle users with the majority of market shares leaning towards compulsory civil liability insurance of motor vehicle users. 

(2) Board for operating motor vehicle fund consists of:

- Chairperson of Council for managing motor vehicle fund: General Secretary of the IAV.

- Members: Representatives of at least 3 non-life insurance enterprises permitted to implement compulsory civil liability insurance of motor vehicle users with the majority of market shares leaning towards compulsory civil liability insurance of motor vehicle users. 

(3) Board for supervising motor vehicle fund consists of:

- At least 3 members that are representatives of 3 non-life enterprises permitted to implement compulsory civil liability insurance of motor vehicle users.

- Head of Board for supervising motor vehicle fund assigned by Chairperson of Council for managing motor vehicle fund among members of board for supervision.

- Non-life insurance enterprises whose members participate in Board for supervising motor vehicle fund must be independent of life insurance enterprises whose members participate in Board for operating motor vehicle fund to ensure timely assessment and detection of risks that potentially affect effectiveness and principles of managing and using motor vehicle fund.

3. Tasks and powers of organizations and bodies related to motor vehicle fund in Vietnam

Tasks and powers of organizations and bodies related to motor vehicle fund are prescribed as follows:

- Tasks and powers of Council for managing motor vehicle fund:

+ be legally responsible to Minister of Finance for managing and operating motor vehicle fund.

+ issue Regulations on operation of Council for managing motor vehicle fund, Board for operating motor vehicle fund and Board for supervising motor vehicle fund.

+ issue specific regulations on managing and using motor vehicle fund; approve estimates and statements of motor vehicle fund.

+ issue decisions on establishing Board for operating motor vehicle fund and Board for supervising motor vehicle fund.

+ submit reports on approved estimates and statements of motor vehicle fund to Ministry of Finance.

- Tasks and powers of Board for operating motor vehicle fund:

+ be legally responsible to Council for managing motor vehicle fund for managing, using, paying and settling motor vehicle fund.

+ comply with regulations on managing and using motor vehicle fund according to plan approved by Council for managing motor vehicle fund as specified under this Circular and refrain from using the fund for other purposes.

- Tasks and powers of Board for supervising motor vehicle fund:

+ supervise activities of motor vehicle fund and guarantee compliance with regulations and law and this Circular.

+ consolidate assessment and recommendations for Council for managing motor vehicle fund regarding financial situations of motor vehicle on a quarter and yearly basis.

+ conduct inspections in terms of management and use of motor vehicle fund at request of Council for managing motor vehicle fund.

(Article 7 of Circular 04/2021/TT-BTC)

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE