What is the motor vehicle insurance fund? Expenditure incurred by motor vehicle insurance fund in Vietnam

What is the motor vehicle insurance fund? Expenditure incurred by motor vehicle insurance fund in Vietnam (Internet image)

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

1. What is the motor vehicle insurance fund?

According to Clause 1, Article 24 of Decree No. 03/2021/ND-CP, the 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.

2. Expenditure incurred by motor vehicle insurance fund in Vietnam

Specifically, in Clause 1, Article 27 of Decree 03/2021/ND-CP, the motor vehicle insurance fund in Vietnam shall be used for:

(1) Performing humanitarian purposes, to be specific:

In case vehicles that cause accidents cannot be identified, vehicles are not benefitting from insurance and cases of exclusion of insurance liabilities according to Article 13 of Decree 03/2021/ND-CP (other than damage done intentionally by motor vehicle users, operators or accident victims):

- 30% of insurance liabilities as per the law/person/case in accidents with fatalities;

- 10% of insurance liabilities as per the law/person/case in case of bodily injuries receiving emergency medical treatment.

Once insurance enterprises have paid advance compensation according to Point b Clause 2 Article 14 of Decree 03/2021/ND-CP, Board for operating motor vehicle insurance fund are responsible for reimbursing the advance payment incurred by the insurance enterprises in case accidents are identified to be within insurance liability exclusion or in case the advance payment exceeds insurance claims when the accidents are within scope of compensation.

(2) Preventing and remediating traffic accidents.

(3) Publicizing and educating on road traffic and compulsory civil liability insurance of motor vehicle users.

(4) Assisting police authorities financially in cooperating with the IAV, Council for managing motor vehicle insurance fund and non-life insurance enterprises in preventing, remediating and anti-fraud in insurance business and compulsory civil liability insurance of motor vehicle users.

(5) Commending organizations and individuals with merits in implementing compulsory civil liability insurance of motor vehicle users, preventing and remediating damage, traffic accidents and ensuring road traffic safety.

(6) Finishing and maintaining operation of database on compulsory civil liability insurance of motor vehicle users.

(7) Financing operation of ASEAN Program for compulsory motor insurance and operation of Vietnamese agency implementing Protocol No. 5 on ASEAN Program for compulsory motor insurance.

(8) Managing motor vehicle insurance fund:

- Salary, allowances and salary-based payments (social insurance, health insurance, unemployment insurance, union fees) and commendation for employees of offices of motor vehicle insurance fund;

- Responsibility allowances for individuals holding managerial positions in motor vehicle insurance fund and part-time employees of offices of motor vehicle insurance fund;

- Renting offices, purchasing equipment, spending on banking and post services;

- Hiring auditors;

- Spending on operational costs and organizing meetings of motor vehicle insurance fund.  

3. Sources of motor vehicle insurance fund in Vietnam

Sources of motor vehicle insurance fund include:

- Contribution of insurance enterprises permitted to implement compulsory civil liability insurance of motor vehicle users.

- Interests from deposits.

- Excess of motor vehicle insurance fund of the previous year permitted to be retained for the following year.

- Contributions and financing of organizations and individuals.

- Other legal revenues (if any).

(Article 25 of Decree 03/2021/ND-CP)

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