Regulations on the estimation, accounting, and final settlement of motor vehicle insurance fund in Vietnam

Regulations on the estimation, accounting, and final settlement of motor vehicle insurance fund in Vietnam (Image from the Internet)

1. Principles for managing and using the motor vehicle insurance fund in Vietnam

Article 14 of Decree 67/2023/ND-CP stipulates the principles for managing and using the motor vehicle insurance fund in Vietnam as follows:

- The motor vehicle insurance fund is established to undertake activities in humanitarian support; prevention and limitation of road traffic losses and accidents; propaganda, education on road traffic safety, compulsory civil liability insurance of motor vehicle owners, and other related activities to contribute to protecting public interests and ensuring social safety.

- The motor vehicle insurance fund is contributed by insurers authorized to implement compulsory civil liability insurance for motor vehicle owners, managed centrally by the Vietnam Insurance Association, with a separate bank account at a commercial bank operating in Vietnam, and uses the seal of the Vietnam Insurance Association.

- The motor vehicle insurance fund is managed and used transparently, efficiently, and correctly according to the purposes prescribed in Decree 67/2023/ND-CP.

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

Article 19 of Decree 67/2023/ND-CP regulates the organizational structure and management operation of the motor vehicle insurance fund as follows:

* The Management Council of the motor vehicle insurance fund includes:

- Chairman of the Management Council of the motor vehicle insurance fund: Chairman of the Vietnam Insurance Association.

- Members:

Representative of the Ministry of Finance.

Representative of the Ministry of Public Security.

Secretary General of the Vietnam Insurance Association.

General Director or Deputy General Director of at least 3 insurers authorized to implement compulsory civil liability insurance of motor vehicle owners, having the largest market share in compulsory civil liability insurance of motor vehicle owners.

* The Executive Board of the motor vehicle insurance fund includes:

- Head of the Executive Board of the motor vehicle insurance fund: Secretary General of the Vietnam Insurance Association.

- Members: Representatives of at least 3 insurers authorized to implement compulsory civil liability insurance of motor vehicle owners, having the largest market share in compulsory civil liability insurance of motor vehicle owners.

* The Supervisory Board of the motor vehicle insurance fund includes:

- At least 3 members are representatives of 3 insurers authorized to implement compulsory civil liability insurance of motor vehicle owners.

- Head of the Supervisory Board of the motor vehicle insurance fund is appointed by the Chairman of the Management Council of the motor vehicle insurance fund from among the members of the Supervisory Board.

- The insurers with members participating in the Supervisory Board of the motor vehicle insurance fund must be independent of the insurers with members participating in the Executive Board of the motor vehicle insurance fund to ensure prompt assessment and detection of risks that may affect the efficiency and principles of management, and use of the motor vehicle insurance fund.

3. Latest regulations on the preparation of estimates, accounting, and final settlement of the motor vehicle insurance fund in Vietnam

* Preparation of estimates:

- By December 15 each year, the Executive Board of the motor vehicle insurance fund prepares estimated revenues and expenditures of the motor vehicle insurance fund, including:

Current year's revenue and expenditure status of the motor vehicle insurance fund.

Revenue and expenditure plan of the motor vehicle insurance fund for the following year.

- The Executive Board reports the estimated revenues and expenditures of the motor vehicle insurance fund for the Management Council’s approval. The estimated revenues and expenditures must be communicated to the Ministry of Finance and insurers immediately after approval.

- Expenditure plans under the annual estimates, except for the contents in points e, g, h, clause 1, Article 17 of Decree 67/2023/ND-CP, can be continued into the next year if not executed or fully disbursed by December 31.

- If necessary, the Management Council of the motor vehicle insurance fund may adjust the approved revenue and expenditure estimates at the beginning of the year and notify the Ministry of Finance and insurers.

* Accounting of the motor vehicle insurance fund:*

The Executive Board of the motor vehicle insurance fund must:

- Organize accounting and statistical work in conformance with the Accounting Law 2015, Statistics Law 2015, and related guiding documents.

- Comply with regulations on accounting documents; fully record all revenues and expenditures of the motor vehicle insurance fund.

- Open accounting books to record, systematize, and store all arising transactions related to the motor vehicle insurance fund.

- Quarterly, prepare revenue and expenditure reports of the motor vehicle insurance fund to report to the Management Council for approval and notify the Ministry of Finance either directly, via postal service, or via email.

Quarterly report: The cutoff date is from the 1st day of the first month to the 30th or 31st of the last month of the reporting period. The deadline for submitting the report is within 30 days from the end of the quarter.

* final settlement of the motor vehicle insurance fund:*

Annually, the Executive Board of the motor vehicle insurance fund must prepare a final settlement report of the motor vehicle insurance fund, verified by an independent auditor, to report to the Management Council for approval.

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