Rates of collection and payment from mandatory fire and explosion insurance for fire safety and prevention activities in Vietnam

Rates of collection and payment from mandatory fire and explosion insurance for fire safety and prevention activities in Vietnam​ (Image from the Internet)

1. Rates of collection and payment from mandatory fire and explosion insurance for fire safety and prevention activities in Vietnam

According to Article 30 of Decree 67/2023/ND-CP, the collection and payment from mandatory fire and explosion insurance for fire prevention and fighting activities in Vietnam are as follows:

- The revenue collected from insurers implementing mandatory fire and explosion insurance in the fiscal year is 1% of the total actual premium collected from original insurance contracts in the preceding fiscal year.

- Annually, insurers are responsible for depositing the amount stipulated in Clause 1, Article 30 of Decree 67/2023/ND-CP into the account of the Fire Prevention, Fighting and Rescue Police Department, opened by the Ministry of Public Security at the Central State Treasury, by the following deadlines:

+ By June 30 each year: Deposit 50% of the total amount stipulated in Clause 1, Article 30 of Decree 67/2023/ND-CP.

+ By December 31 each year: Deposit the remaining amount stipulated in Clause 1, Article 30 of Decree 67/2023/ND-CP.

2. Management and utilization of revenue from mandatory fire and explosion insurance in Vietnam

The regime for management and utilization of revenue from mandatory fire and explosion insurance in Vietnam according to Article 31 of Decree 67/2023/ND-CP is as follows:

- The management and utilization of revenue from mandatory fire and explosion insurance must ensure transparency and be in accordance with the purposes as stipulated by Decree 67/2023/ND-CP and relevant legal regulations.

- Revenue from mandatory fire and explosion insurance for fire prevention and fighting activities is utilized as follows:

+ Expenditure to support the procurement of equipment and devices for fire prevention and fighting for the Fire Prevention and Fighting Police: Maximum of 65% of the actual revenue collected from mandatory fire and explosion insurance by insurers in the fiscal year. The procurement of equipment and devices for fire prevention and fighting is carried out according to the legal regulations on bidding.

+ Expenditure to support propaganda, dissemination of legal knowledge on fire prevention, fighting, and mandatory fire and explosion insurance: Maximum of 15% of the actual revenue collected from mandatory fire and explosion insurance by insurers in the fiscal year. Content and levels of expenditure for propaganda and dissemination are carried out according to the legal regulations on the management, utilization, and settlement of funds ensuring legal education and dissemination.

+ Expenditure to support the Fire Prevention and Fighting Police in activities such as investigating fire causes; professional training, safety inspection on fire prevention and fighting; supervising the participation in mandatory fire and explosion insurance by facilities with fire and explosion hazards: Maximum of 15% of the actual revenue collected from mandatory fire and explosion insurance by insurers in the fiscal year. Expenditure content and levels follow the current financial spending policies.

+ Expenditure to support rewards for achievements of organizations and individuals directly participating and coordinating in fire prevention and fighting work: Maximum of 5% of the actual revenue collected from mandatory fire and explosion insurance by insurers in the fiscal year. In which:

Regular  reward  expenses:  Implemented  according  to  the  legal  regulations  on  emulation  and  reward.

Extraordinary  reward  expenses  for  organizations  and  individuals  directly  participating  in  fire  prevention  and  fighting:  The  Minister  of  Public  Security  decides  on  specific  cases  and  levels  of  extraordinary  rewards  based  on  the  achievements  of  organizations,  individuals,  and  revenue  from  mandatory  fire  and  explosion  insurance.

- Annually, concurrently with the preparation of the annual state budget estimate, the Ministry of Public Security prepares an estimate of revenue from mandatory fire and explosion insurance fees and incorporates it into the Ministry’s budget estimate, submitting it to the Ministry of Finance according to the regulations of the 2015 State Budget Law and guiding documents for aggregation and monitoring.

- The management and utilization of funds comply with the current policies, norms, and standards. The Ministry of Public Security is responsible for approving and verifying the annual financial settlement for the funds collected from mandatory fire and explosion insurance for affiliated units; aggregating and preparing annual settlement reports for other retained funds, submitting them to the Ministry of Finance concurrently with the submission of the state budget settlement report for aggregation and monitoring.

- The actual revenue collected from mandatory fire and explosion insurance for fire prevention and fighting activities that is not fully used by the end of the year for each item stipulated in Clause 2, Article 31 of Decree 67/2023/ND-CP is carried over to the following year to continue being used according to legal regulations. After 5 years, if the funds collected from mandatory fire and explosion insurance are not fully utilized, the Ministry of Public Security shall lead, in cooperation with the Ministry of Finance, to review and assess the revenue from mandatory fire and explosion insurance and report to the Government of Vietnam for adjustments to the deduction and payment rates as appropriate.

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