Circular 50/2022/TT-BTC on compulsory insurance in construction investment activities

CIRCULAR

Guiding the implementation of a number of articles of the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities and Decree No. 20/2022/ND-CP dated March 10, 2022, amending and supplementing a number of Articles of the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities

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Pursuant to the Law on Insurance Business dated December 09, 2000; Law on Amending and Supplementing a Number of Articles of the Law on Insurance Business dated November 24, 2010;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business and the Law on Intellectual Property dated June 14, 2019;

Pursuant to the Construction Law dated June 18, 2014 and the Law Amending a Number of Articles of the Construction Law dated June 17, 2020;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities;

Pursuant to the Government’s Decree No. 20/2022/ND-CP date March 10, 2022, amending and supplementing a number of articles of the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities;

At proposal of the Director of the Insurance Supervisory Authority;

The Minister of Finance hereby promulgates the Circular guiding the implementation of a number of articles of the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities and Decree No. 20/2022/ND-CP dated March 10, 2022, amending and supplementing a number of Articles of the Government’s Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities,

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the insurance rules, terms, premium rates, financial and reporting regimes for compulsory insurance in construction investment activities, including compulsory insurance for underway works; compulsory insurance for construction investment consultancy professional liability; compulsory insurance for workers on construction sites; compulsory civil liability insurance for third parties.

Article 2. Subjects of application

This Circular applies to:

1. Project owners and contractors (in case work insurance premiums are already included in contractual prices).

2. Consultancy contractors.

3. Construction contractors.

4. Non-life insurance enterprises and branches of foreign non-life insurance enterprises (below referred to as insurance enterprises) and reinsurance enterprises.

5. Other agencies, organizations and individuals involved in compulsory insurance in construction investment activities.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Insurance buyer means any of the following organizations and individuals:

a) Project owners or contractors in case work insurance premiums are already included in contractual prices (for compulsory insurance for underway works).

b) Consultancy contractors (for compulsory insurance for construction investment consultancy professional liability).

c) Construction contractors (for compulsory insurance for workers on construction sites and civil liability insurance for third parties).

2. Consultancy contractor means a consultancy contractor providing construction survey or construction design for construction works of grade II or higher grade.

3. Third party means the party suffering health, loss of life or property damage and other lawful rights and interests caused by construction design or survey (for compulsory insurance for construction investment consultancy professional liability), or during the construction process (for compulsory civil liability insurance for third parties), excluding insurance enterprises, insurance buyers and the insured.

4. Deduction means a fixed amount or a percentage (%) of an indemnity that the insurance buyer shall bear in each insured event, specifically as follows:

a) For compulsory insurance for underway works, the deduction level specified at Point b Clause 1 Section I and Point b Clause 1 Section II of Appendix I to this Circular shall apply.

b) For compulsory insurance for construction investment consultancy professional liability, the deduction level specified at Point b Clause 1 of Appendix II to this Circular shall apply.

5. Putting into use means the putting of a construction work or work item into operation.

6. The insured means any of the following organizations and individuals:

a) Project owners, contractors, and other organizations and individuals with rights or interests related to works during the construction period (for compulsory insurance for underway works).

b) Consultancy contractors and other organizations and individuals participating in construction survey and design activities of consultancy contractors (for compulsory insurance for construction investment consultancy professional liability);

c) Construction contractors (for compulsory insurance for workers on construction sites and compulsory civil liability insurance for third party).

7. Occupational disease means a disease defined in Clause 9 Article 3 of the Law on Occupational Safety and Health.

8. Employees defined in Clause 1 Article 3 of the Labor Code.

9. Occupational accident defined in Clause 8 Article 3 of the Law on Occupational Safety and Health.

Article 4. Compulsory insurance certificates in construction investment activities (hereinafter referred to as “insurance certificates”)

1. Insurance certificate is an evidence of entering into compulsory insurance contract in construction investment activities between the insurance buyer and the insurance enterprise.

2. An insurance enterprise must separately issue an insurance certificate to the insurance buyer. Insurance certificates shall be actively designed by the insurance enterprises and contain the following information:

a) Name and address of the insurance enterprise, the insurance buyer, the insured, hotline number of the insurance enterprise.

b) Name and site of the construction work.

c) Insurance sum.

d) Total value of the construction work (if any).

dd) Number of the consultancy contract; the consultancy contract value, in which the construction survey value is separate from the construction and design consultancy value (for compulsory occupational liability insurance in construction investment activities).

e) Total number of insured workers (for compulsory insurance for workers on construction sites).

g) Insurance period, premium rate, premium and deduction (if any).

h) Date of issuance of the insurance certificate.

3. In case of issuing e-insurance certificates, insurance enterprises must comply with the Law on E-Transactions and guiding documents. An e-insurance certificate must fully comply with current regulations and contain sufficient information prescribed in Clause 2 of this Article.

Article 5. Exclusion of general insurance liability

An insurance enterprise is not liable to indemnify for the following losses:

1. Loss caused by war, riots, strikes and acts of hostile forces, rebellion, malicious acts on behalf of or in connection with political organizations, confiscation, expropriation, requisition, confiscation or destruction or damage caused by order of a competent state agencies.

2. Loss caused by terrorism.

3. Loss caused by nuclear reaction, nuclear radiation or radioactive contamination.

4. Loss arising from intentional violations committed by the insurance buyer or the insured (this provision does not apply to compulsory insurance for workers on construction sites in case such workers take any self-defense act or save people or assets or use stimulants under doctor’s prescriptions).

5. Loss arising in case an insurance buyer has no insurable interests as prescribed in Clause 9, Article 3 of the Law on Insurance Business.

6. Loss arising from cessation of construction work or consequential loss of construction work (whether partial or complete cessation of construction work).

7. Loss to data, software and computer programs.

Article 6. Termination of insurance contracts

1. An insurance contract shall terminate in the following cases:

a) The insurance buyer and insurance enterprise have agreed in the insurance contract that the insurance contract shall terminate in case the job stated in the construction contract is suspended or the construction contract terminates in accordance with law.

Within five (5) working days from the date on which the project owner decides on the suspension of the job stated in the construction contract or of the termination of the construction contract in accordance with law, the insurance buyer shall notify such in writing to the insurance enterprise. The insurance contract shall terminate at the time when the job stated in the construction contract is suspended or when the construction contract terminates in accordance with law.

b) Other cases as prescribed by law.

2. Legal consequences of the termination of an insurance contract

a) If an insurance contract terminates under Point a Clause 1 of this Article, within fifteen (15) days from the date of termination, the insurance enterprise shall, after deducting reasonable expenses related to the insurance contract as agreed in the insurance contract (if any), refund to the insurance buyer the premium amount (if any) corresponding to the remaining period of the insurance contract. If the insurance buyer has not yet fully paid the premium for the insurance period counting to the date of termination of the insurance contract, the insurance buyer shall additionally pay the unpaid premium amount.

b) The legal consequences of termination of an insurance contract under Point b Clause 1 of this Article must comply with the insurance contract and relevant laws.

Chapter II

SPECIFIC PROVISIONS

Section 1

COMPULSORY INSURANCE FOR UNDERWAY WORKS

Article 7. The insured object and minimum insurance sum

1. The objects of insurance for underway works are works and work items specified in Clause 1 Article 4 of the Government's Decree No. 119/2015/ND-CP dated November 13, 2015, prescribing compulsory insurance in construction investment activities and Clause 2 Article 1 of the Government's Decree No. 20/2022/ND-CP dated March 10, 2022, amending and supplementing a number of Articles of Decree No. 119/2015/ND-CP.

2. The minimum insurance sum for a compulsory insurance for underway works as prescribed in Clause 1 of this Article is the sufficient value of the completed work, including all materials, worker costs, equipment installed in the work, transportation charge, other taxes and charges, and other items provided by the project owners or contractors. The minimum insurance sum for an underway work must not be lower than the total value of the construction contract, including adjusted and additional values (if any).

Article 8. Scope of insurance and exclusion of insurance liability

1. Scope of insurance

An insurance enterprise shall indemnify for losses occurring to underway works caused by any risks, except cases of exclusion of insurance liability prescribed in Article 2 of this Circular.

2. Exclusion of insurance liability

Cases of exclusion of insurance liability for compulsory insurance for underway works include:

a) Exclusion of general insurance liability prescribed in Article 5 of this Circular.

b) Loss arising due to the consultancy contractors’ errors in design for underway works.

c) Loss due to corrosion, abrasion, oxidation.

d) Loss due to decay and occurring under in the normal pressure and temperature (this provision only applies to construction works specified at Point a Clause 1 Article 10 of this Circular).

dd) Loss due to hardening such as rust, scaling and the like (this provision only applies to construction works specified at Point b Clause 1 Article 10 of this Circular).

e) Expenses for repairing, replacing or correcting material defects or workmanship errors. This exclusion shall only apply to loss of directly-affected items, not apply to loss of other items that is indirect consequence due to material defects or workmanship errors.

g) Loss or damage only detected at the time of inventory.

Article 9. Insurance period

The compulsory insurance period for an underway work must comply with Clause 1 Article 5 of Decree No. 119/2015/ND-CP, specifically as follows:

1. For a construction work specified at Point a Clause 1 Article 10 of this Circular, the insurance period shall be specified in the insurance contract, counting from the date of commencement to the date of completion of construction as stated in the investment-deciding authority’s document (including adjusted and added time (if any)). The insurance period of components and work items shall end at the time such components and work items are handed over or put into use.

2. For a construction work specified at Point b Clause 1 Article 10 of this Circular, the insurance period shall be specified in the insurance contract, counting from the date of commencement of construction stated in the investment-deciding authority’s document (including adjusted and added time (if any)) to the date of handover or after completion of the first test run of the work, whichever comes first, but must be within twenty-eight (28) days from the first date of the test run. The insurance period of an used equipment installed into a work shall end at the starting time of its test run.

Article 10. Premiums and payment of premiums

1. Premium of compulsory insurance for an underway work shall be determined as follows:

a) If the insured work is valued at less than VND one thousand (1,000) billion, whether or not including the installation job the cost of which accounts for less than fifty percent (50%) of the total value of the insured work items, the premium shall be determined according to Point a Clause 1 Section I Appendix 1 to this Circular.

b) If the insured work is valued at less than VND one thousand (1,000) billion, including the installation job the cost of which accounts for fifty percent (50%) or more of the total value of the insured work items, the premium shall be determined according to Point a Clause 1 Section II Appendix I to this Circular.

c) For a work not yet listed at Point a Clause 1 Section I and Point a Clause 1 Section II Appendix I to this Circular or valued at VND one thousand (1,000) billion or more, the insurance enterprise and insurance buyer may reach agreement on the insurance rules, terms, premium and deduction level based on the evidence proving that the leading reinsurance enterprise confirms reinsurance under the same insurance rules, terms, premium and deduction level as those applied by the insurance enterprise to the insurance buyer. Foreign reinsurance assumption enterprises or organizations must be those ranked at least “BBB” by the Standard & Poor’s or “B++” by A.M.Best or ranked equivalently by a qualified and experienced rating organization in the fiscal year nearest to the year of reinsurance assumption.

2. On the basis of level of risks of the insured object, an insurance enterprise may increase or reduce the premium level up to twenty-five percent (25%) of the premium determined at Item a, Point 1, Clause I, Appendix 1 to this Circular (for construction works specified at Point a, Clause 1 of this Article) or of the premium determined at Point a Clause 1 Section II Appendix I to this Circular (for construction works specified at Point b Clause 1 of this Article).

3. In case the construction period is prolonged compared to that stated in the investment-deciding authority’s document upon entry into the insurance contract, the insurance enterprise and insurance buyer may agree on an additional premium for the prolonged time. The additional premium (if any) shall be calculated based on the premium prescribed in Appendix I to this Circular, the proportion of the prolonged time to the total construction period stated in the investment-deciding authority’s document, and other risks.

4. Time limits for payment of premiums for underway works shall comply with the Ministry of Finance’s Circular No. 50/2017/TT-BTC dated May 15, 2017, guiding the Government's Decree No. 73/2016/ND-CP dated July 01, 2016, detailing the implementation of the Law on Insurance Business and the Law Amending and Supplementing a Number of Articles of the Law on Insurance Business.

For insurance contracts for construction works of construction investment projects specified in the Government's Decree No. 50/2021/ND-CP dated April 01, 2021, amending and supplementing a number of articles the Government’s Decree No. 37/2015/ND-CP of April 22, 2015, prescribing in detail construction contracts, insurance enterprises and insurance buyers shall reach an agreement on time limits for premium payments which are not later than the payment schedule of the construction contracts and include them in the insurance contracts. In any cases, the date of premium payment must not be beyond the insurance period.

5. The finalization of premiums shall be based on the finalized value of the construction contract (parts subject to compulsory insurance), specifically as follows:

a) In case the finalized value of the construction contract (parts subject to compulsory insurance) is higher than the approved cost estimate upon entry into the insurance contract, the premium shall be increased accordingly. The insurance buyer shall pay the additional premium to the insurance enterprise within thirty (30) days from the date the finalized construction contract value is approved in writing by a competent authority;

b) In case the finalized value of the construction contract (parts subject to compulsory insurance) is lower than the approved cost estimate, the premium shall be decreased accordingly. The insurance enterprise shall refund the excessive amount of premium to the insurance buyer within thirty (30) days from the date of receiving a competent authority’s written approval of the finalized construction contract value from the insurance buyer. The insurance buyer shall recover this refund from the insurance enterprise. If the insurance buyer is also the construction contractor and the premium of the work is included in the price of the construction contract, the construction contractor shall transfer such refund to the project owner.

Article 11. Liability to buy insurance

A project owner or contractor (in case work insurance premiums are already included in contractual prices) shall buy insurance for the whole work or for each work item during the construction period. Below are specific cases:

1. In case of buying insurance for the whole work, a project owner or contractor (in case work insurance premiums are already included in contractual prices) shall buy insurance with the minimum insurance sum specified in Clause 2 Article 7 of this Circular.

2. In case of buying insurance for each work item, a project owneror contractor (in case work insurance premiums are already included in contractual prices) shall buy insurance with the insurance sum for each work item not lower than the full value of the work item after it is completed, and with the total insurance sum of these work items not lower than the minimum insurance sum prescribed in Clause 2 Article 7 of this Circular.

Article 12. Principles of indemnification

1. When an incident occurs to the construction work, the insurance buyer and insurance enterprise shall coordinate in settling indemnification as follows:

a) The insurance buyer shall:

- Immediately notify the insurance enterprise of the incident via means of communication, then send a written notice within 14 days from the date of occurrence of the incident.

- After sending the written notice to the insurance enterprise, repair or replace damaged components whose value does not exceed the relevant deduction level prescribed at Point b Clause 1 Section I Appendix I to this Circular (for works specified at Point a Clause 1 Article 10 of this Circular) or Point b Clause 1 Section II Appendix I to this Circular (for works specified at Point b Clause 1 Article 10 of this Circular).

In other cases, the insurance enterprise shall carry out loss assessment before the insurance buyer can perform repair or replacement of damaged work items. If the insurance enterprise cannot carry out loss assessment within five (5) working days after receiving a notice of an incident occurring to a work, the insured is entitled to perform repair or replacement of damaged work items, except for the force majeure events or external obstacles. The insurance enterprise shall pay expenses for the repair or replacement of damaged work items falling within its insurance liability under the condition that the insurance buyer performs repair or replacement in a timely manner.

- Keep intact the damaged components and make them available for loss assessment by the insurance enterprise’s representative or assessor.

- Promptly notify the public security agency in case of theft or burglary.

- Take all measures within its capacity to minimize the loss.

- Provide the insurance enterprise with documents required in an indemnification dossier as prescribed in Clauses 1, 2, 3, 4 and 6 Article 13 of this Circular and facilitate verification of such documents by the insurance enterprise.

- Take, or coordinate with or permit the insurance enterprise to, take all actions and measures which may be necessary or required by the insurance enterprise to protect the insurance enterprise’s interests after indemnifying for losses within its insurance liability prescribed in this Circular.

b) The insurance enterprise shall:

- Conduct loss assessment as prescribed by law and make a written record of assessment of the causes and extent of damage in accordance with Clause 5 Article 13 of this Circular.

- Guide and coordinate with the insurance buyer and related agencies, organizations and individuals in collecting sufficient documents for preparation of an indemnification dossier.

- In case of accepting to pay indemnity, issue a written notice of indemnification.

- In case of refusing to pay indemnity, issue a written notice stating the reason.

2. The insurance enterprise shall indemnify only material losses actually incurred by the insured which have been included in the insurance sum.

3. The level of indemnity for each property item specified in the insurance contract must not exceed such item’s insurance sum. The total indemnity must not exceed the total insurance sum specified in the insurance contract, specifically as follows:

a) In case of repairable damage, such damage shall be repaired. The indemnity is equal to the necessary cost of repair to restore the damaged item to its original condition before the occurrence of the damage less the salvage value (in case the insurance buyer retains the damaged item) and the deduction level.

b) In case of total loss, the indemnity is the actual market value of the item concerned at the time and place of occurrence of the loss less the deduction level. In case the insurance buyer retains the damaged item, the indemnity is the actual value of that item at the time and place of occurrence of the loss less the salvage value and the deduction level.

4. The cost of provisional repair shall be borne by the insurance enterprise if such repair constitutes part of the official repair and does not increase the total repair expense as stated in the final repair plan.

5. The insurance enterprise is not liable to pay indemnity for any expense aiming at renovation, addition and/or upgrade of any insured work item.

6. If the insurance buyer enters into compulsory insurance contracts for an underway work with two (2) or more insurance enterprises to insure the same object under the same condition and in the same insured event, when occurring an insured event, each insurance enterprise is only liable to pay indemnity according to the proportion of its agreed insurance sum to the total insurance sum of all the insurance contracts already entered into by the insurance buyer. The total indemnity paid by all the insurance enterprises must not exceed the actual loss of property.

7. The insurance enterprise is not liable to pay indemnity for any amount of money which arises or increases from an act of insurance fraud as prescribed in the Penal Code.

Article 13. Indemnification dossier

An insurance enterprise shall coordinate with the insurance buyer, the insured and related agencies and organizations in collecting relevant documents for preparing an indemnification dossier. A compulsory indemnification dossier for an underway work must comprise:

1. The insurance buyer’s written claim.

2. Documents relating to the insured object, including the insurance contract and certificate of insurance.

3. Documents proving loss of or damage to property, including:

a) Construction incident records (notarized copies or copies certified by the party making such records) as prescribed in Article 47 of the Government’s Decree No. 06/2021/ND-CP dated January 26, 2021, detailing a number of provisions on quality management, construction and maintenance of construction works.

b) Valid invoices and documents in case of property repair or replacement.

4. Documents proving necessary and reasonable expenses incurred by the insurance buyer to minimize the loss or follow the insurance enterprise’s instructions.

5. A written record of assessment of causes and extent of loss, prepared by the insurance enterprise or its authorized person.

6. Other relevant documents (if any).

Section 2

COMPULSORY INSURANCE FOR CONSTRUCTION INVESTMENT CONSULTANCY PROFESSIONAL LIABILITY

Article 14. The insured object and minimum insurance sum

1. The object of compulsory insurance for construction investment consultancy professional liability is the civil liability of construction consultancy contractors to a third party arising from survey and design of construction works of grade II or higher grade.

2. The minimum insurance sum must be equal to the value of the construction survey consultancy contract or construction design consultancy contract.

Article 15. Scope of insurance and exclusion of insurance liability

1. Scope of insurance

An insurance enterprise shall indemnify a consultancy contractor amounts of money which the latter shall indemnify a third party for losses incurred by the third party arising from the performance of construction consultancy jobs and related costs as prescribed by law, except for the cases prescribed in Clause 2 of this Article.

2. Exclusion of insurance liability

Cases of exclusion of insurance liability for compulsory insurance for construction investment consultancy professional liability include:

a) Exclusion of general insurance liability prescribed in Article 5 of this Circular.

b) Loss arising from consultancy contractors’ intentional selection of untested methods of construction, measurement, calculation and design, and use of untested materials.

c) Expenses for redesigning or correcting drawings, plans, technical manuals or catalogs of technical documentation.

d) Loss caused by mold.

dd) Loss caused by construction survey and design advice that leads to environmental pollution or contamination and affects a third party.

e) Loss related to use asbestos or any materials containing asbestos.

g) Loss arising from the infringement of the intellectual property right.

Article 16. Insurance period

The period of compulsory professional liability insurance for construction consultants starts on the commencement date of performance of consultancy jobs and ends on the expiry date of the warranty period of the concerned work as prescribed by law.

Article 17. Premiums and payment of premiums

1. The premiums of compulsory professional liability insurance for construction survey or design consultants are prescribed as follows:

a) For a construction work which is valued at less than VND one (1) trillion and is other than dikes, dams, ports, harbors, piers, wharves, breakwaters and irrigation works; airports, airplanes, satellites and aerospace; ship building and repair works; offshore and underwater energy construction works; railway, tram, express train and underground projects, and mines, the premium and deduction level are prescribed in Clause 1 Appendix II to this Circular.

b) For construction works other than those specified at Point a Clause 1 of this Article, the insurance enterprise and insurance buyer may reach an agreement on insurance rules and terms, premiums and deduction level based on the evidence proving that the leading reinsurance enterprise confirms its assumption of reinsurance under the same insurance rules and terms, premiums and deduction level as those applied by the insurance enterprise to the insurance buyer. Foreign reinsurance assumption enterprises or organizations must be those ranked at least “BBB” by the Standard & Poor’s or “B++” by A.M.Best or ranked equivalently by a qualified and experienced rating organization in the fiscal year nearest to the year of reinsurance assumption.

2. According to the level of risk of the insured object, the insurance enterprise may increase or reduce the premium up to twenty-five percent (25%) of the premium specified at Point a Clause 1 Appendix II to this Circular.

3. In case the construction period is prolonged compared to that stated in the investment-deciding authority’s document upon entry into the insurance contract, the insurance buyer and insurance enterprise shall agree on an additional premium for the prolonged time. The additional premium shall be calculated based on the premium prescribed at Point a Clause 1 Appendix II to this Circular and in proportion to the prolonged time.

4. The payment of construction investment consultancy professional liability insurance premium shall comply with Circular No. 50/2017/TT-BTC.

5. The finalization of premiums shall be based on the finalized value of the consultancy contract for construction survey or design, specifically as follows:

a) In case the finalized value of the consultancy contract is higher than the estimated value approved by a competent authority upon entry into the insurance contract, the premium shall be increased accordingly. The insurance buyer shall pay the additional premium to the insurance enterprise within thirty (30) days from the date the finalized value is approved in writing by a competent authority;

b) In case the finalized value of the consultancy contract is lower than the estimated value approved by a competent authority upon entry into the insurance contract, the premium shall be decreased accordingly. The insurance enterprise shall refund the excessive amount of premium to the insurance buyer within thirty (30) days from the date of receiving a competent authority’s written approval of the finalized value from the insurance buyer.

Article 18. Liability to buy insurance

The consultancy contractors are obliged to buy the compulsory professional liability insurance for construction consultants when performing the consultancy jobs.

Article 19. Principles of indemnification

1. An insurance enterprise shall pay indemnity to a consultancy contractor amounts of money the latter is liable to indemnify a third party for losses incurred by the third party, and all related expenses as prescribed by law, specifically as follows:

a) Losses incurred by the third party and related expenses arising due to mistakes or negligence of the insured which are the consequences of performing construction survey or design jobs insured;

b) The third party’s first claim made against the insured (arising from an insured event) and notified by the insurance buyer to the insurance enterprise during the insurance period, including expenses for a lawyer appointed by the insurance enterprise or the insured (with the insurance enterprise’s written consent), fees and other expenses for the investigations, revisions and defense related to the insured event, but excluding salaries paid to the worker or manager who has a labor contract with the insured.

c) Other related expenses as prescribed by law.

2. The aggregate liability of the insurance enterprise for all claims arising in the insurance period must not exceed the insurance sum as agreed upon in the insurance contract.

3. If the insurance buyer enters into contracts on compulsory professional liability insurance for construction consultancy with two (2) or more insurance enterprises covering the same object under the same condition and insured event, then, when an insured event occurs, each insurance enterprise is only liable to pay indemnity according to the proportion of its agreed insurance sum stated in the insurance contract to the total insurance sum of all the insurance contracts already entered into by the insurance buyer.

4. The insurance enterprise is not liable to pay indemnity for any amount of money which arises or increases from an act of insurance fraud as prescribed in the Penal Code.

5. Upon receiving a third party’s claim, the insurance buyer and insurance enterprise shall coordinate with each other in the settlement of such claim as follows:

a) The insurance buyer shall:

- Immediately notify it to the insurance enterprise via proper means of communication, then send a written notice within fourteen (14) days after receiving a third party’s claim.

- Take all measures within its capacity to minimize the loss.

- Provide documents in an indemnification dossier as required in Clauses 1, 2, 3, 4, 5 and 7 Article 20 of this Circular, and facilitate verification of those documents by the insurance enterprise.

- Take, or coordinate with or permit the insurance enterprise to, take all actions and measures which may be necessary or required by the insurance enterprise to protect the insurance enterprise’s interests after indemnifying for losses within its insurance liability prescribed in this Circular.

b) The insurance enterprise shall:

- Conduct loss assessment as prescribed by law and make a written record of assessment of the causes and extent of loss in accordance with Clause 6 Article 20 of this Circular.

- Provide guidance for the insurance buyer and coordinate with the insurance buyer and related agencies, organizations and individuals in the collection of sufficient documents for making an indemnification dossier.

- Coordinate with the insurance buyer in settling the third party’s claim request within the insurance liability when an insured event occurs.

- In case of accepting to pay indemnity, issue a written notice of indemnification.

- In case of refusing to pay indemnity, issue a written notice stating the reason.

Article 20. Indemnification dossier

An insurance enterprise shall coordinate with the insurance buyer, the insured and related agencies and organizations in collecting relevant documents for preparing an indemnification dossier. An indemnification dossier for compulsory professional insurance liability for construction consultants must comprise:

1. The insurance buyer’s written claim.

2. Documents relating to the insured object, including the insurance contract and certificate of insurance.

3. The third party’s written claim against the insured.

4. Documents proving bodily injury (copies certified by a health establishment, or by the insurance enterprise after comparing with the originals) provided by the insurance buyer. Depending on the extent of injury, one or some of the following documents is/are required:

a) Injury certificate.

b) Hospital discharge paper.

c) Documents certifying surgery.

d) Medical records.

dd) Death certificate extract or death certificate or written certification of public security agency or examination result of forensic examination agency.

e) Valid invoices and receipts of medical expenses.

5. Documents proving loss of or damage to property, including:

a) Construction incident records (notarized copies or copies made by the party making such records) as prescribed in Article 47 of Decree No. 06/2021/ND-CP.

b) Valid invoices and documents in case of property repair or replacement.

c) Papers, invoices and documents related to expenses incurred by the insurance buyer to minimize the loss or follow the insurance enterprise’s instructions.

6. A written record of assessment of the causes and extent of loss, prepared by the insurance enterprise on the basis of an agreement between the insurance enterprise and the insurance buyer, the insured.

7. Other relevant documents (if any).

Section 3

COMPULSORY INSURANCE FOR WORKERS ON CONSTRUCTION SITES

Article 21. The insured object and minimum insurance sum

1. The compulsory insured object for workers on construction sites is the civil liability of construction contractors for their workers on construction sites as prescribed by law.

2. The minimum (compulsory) insurance sum for workers on construction sites is VND one hundred (100) million/person/incident.

Article 22. Scope of insurance and exclusion of insurance liability

1. Scope of insurance

An insurance enterprise shall pay indemnity to a construction contractor for amounts of money the latter is liable to pay to workers for injury or death caused by occupational accidents or diseases due to their work on a construction site, except the cases specified in Clause 2 of this Article.

2. Exclusion of insurance liability

a) Exclusion of general insurance liability prescribed in Article 5 of this Circular.

b) Loss related to use asbestos or any materials containing asbestos.

Article 23. Insurance period

1. The compulsory insurance period for a worker on a construction site starts from the commencement date of working on a construction site until the end of the work’s warranty period as prescribed by law.

2. The exact insurance period for a worker on a construction site shall be determined based on his/her labor contract and the written certification of his/her actual working time on a construction site issued by the construction contractor.

Article 24. Premiums and payment of premiums

1. The compulsory insurance premiums for workers on construction sites are specified in Appendix III to this Circular.

2. According to the level of risk of the insured object, the insurance enterprise may increase or reduce the premium up to twenty-five percent (25%) of the premium specified in Appendix III to this Circular.

3. The payment of premium of compulsory insurance for workers on construction sites shall comply with Circular No. 50/2017/TT-BTC.

4. In case of any change in the number of workers or their jobs, the following guidance shall be followed:

a) Before the 15^th of the month following the month of change, the construction contractor shall send to the insurance enterprise a written notice of such change enclosed with a list of the workers increased or decreased (in case of change in the number of workers), or changed jobs of workers (in case of change in workers’ jobs).

b) In case an increase in the number of workers or a change in their jobs results in an increase in insured risks, the construction contractor shall pay an additional premium before the 15^th of the month following the month of notification.

c) In case a decrease in the number of workers or a change in their jobs results in a decrease in insured risks, the insurance enterprise shall refund to the construction contractor an amount of the premium in proportion to the remaining period of the insurance contract that the insurance buyer overpaid before the 15^th of the month following the month of notification.

d) If the construction contractor properly performs the obligation of notification as prescribed at Point a of this Clause and pays the premium as prescribed at Point b of this Clause, the insurance contract shall automatically be valid with respect to the increased number of workers or terminate with respect to the decreased number of workers; or automatically be valid with respect to the change of jobs of workers from the date on which the change occurs as notified in writing by the insured.

Article 25. Liability to buy insurance

A construction contractor is obliged to buy compulsory insurance for workers on construction sites when the workers perform their jobs on construction sites.

Article 26. Principles of indemnification

1. When an occupational accident or disease occurs to a worker on a construction site, the insurance buyer and insurance enterprise shall coordinate with each other in settling the payment of indemnity as follows:

a) The insurance buyer shall:

- Immediately notify the occurrence to the insurance enterprise via proper means of communication, then send a written notice within fourteen (14) days after the date of occurrence.

- Take all measures within its capacity to minimize the loss.

- Provide documents in an indemnification dossier as required in Article 27 of this Circular, and facilitate verification of those documents by the insurance enterprise.

- Take, or permit the insurance enterprise to, take all actions and measures which may be necessary or required by the insurance enterprise to protect the insurance enterprise’s interests after indemnifying for losses within its insurance liability prescribed in this Circular.

b) The insurance enterprise shall:

- Provide guidance for the insurance buyer and coordinate with the insurance buyer and related agencies, organizations and individuals in the collection of sufficient documents for making an indemnification dossier; and identify causes and level of damage and injury.

- In case of accepting to pay indemnity, issue a written notice of indemnification.

- In case of refusing to pay indemnity, issue a written notice stating the reason.

2. If a worker is injured or dead due to an occupational disease or accident occurring while performing construction jobs on a construction site within the scope of insurance liability, the insurance enterprise shall pay expenses as agreed between the construction contractor and the insured worker or insured worker’s lawful representative (in case of death). Such expenses include:

a) Allowance during the period of medical treatment as prescribed by doctors, which shall be calculated based on the worker’s salary stated in the labor contract but must not exceed six (6) months’ salary per insured event.

b) Actual medical expenses, including necessary and reasonable expenses for emergency aid and outpatient and inpatient treatment not exceeding VND one hundred (100) million/worker/case.

c) If a worker loses less than eighty-one percent (81%) of his/her working capacity, the specific indemnity for each type of bodily injury shall be determined according to the Schedule of compulsory Indemnities for Workers on Construction Sites in Appendix iv to this Circular.

d) If a worker dies or permanently loses eighty-one percent (81%) or more of his/her working capacity, the insurance enterprise shall pay an indemnity of VND one hundred (100) million/person/case.

The total indemnity must not exceed the total insurance sum specified in the insurance contract.

3. In case a worker’s injury caused by any occupational accident or disease is exacerbated by a preexisting injury or illness, the insurance enterprise is not liable for the exacerbation of injury.

4. Particularly for indemnification prescribed at Point b Clause 2 of this Article, if the insurance buyer enters into insurance contracts for workers on construction sites with two (2) or more insurance enterprises covering the same object under the same condition and insured event, then, when the insured event occurs, each insurance enterprise is only liable to pay indemnity according to the proportion of its agreed insurance sum stated in the insurance contract to the total insurance sum of all the insurance contracts already entered into by the insurance buyer.

Article 27. Indemnification dossier

An insurance enterprise shall coordinate with the insurance buyer, the insured and related agencies and organizations in collecting relevant documents for preparing an indemnification dossier. An indemnification dossier for a worker on a construction site must comprise:

1. The insurance buyer’s written claim.

2. Documents relating to the insured object, including

a) The insurance contract, certificate of insurance, labor contract signed by the insured and worker suffering from the occupational disease or accident.

b) The worker’s written claim for indemnification for the occupational accident or disease (if any).

3. Documents proving the worker’s injury or death due to the occupational accident (copies certified by a health establishment, or by the insurance enterprise after comparing with the originals), including:

a) An occupational accident investigation record (if any) made by a competent agency under law. In case a traffic accident is determined as an occupational accident, a traffic accident record or scene investigation record and the plan of the traffic accident scene prepared by competent authorities are required.

b) Depending on the severity of bodily injury, one or some of the following documents may be included: Injury certificate; Hospital discharge paper; Documents certifying surgery; Medical records; Death certificate extract or death certificate or written certification of public security agency or examination result of forensic examination agency.

c) A working capacity loss assessment record issued by the Medical Assessment Council, for workers who lose five percent (5%) or more of their working capacity (if any).

d) Valid invoices and documents certifying treatment of injuries caused by the occupational accident, issued by health establishments.

4. Documents proving a worker’s injury or death due to an occupational disease include:

a) A record of environmental hazard measurement in a prescribed period issued by a competent agency. If this record is made for many workers, an extract copy shall be required for each dossier.

b) A hospital discharge paper (or an occupational disease examination record if the worker did not receive treatment at a hospital), or certificate of association with occupational disease; medical record; extract of death certificate or death certificate (in case the worker dies).

c) A working capacity loss assessment record issued by the Medical Assessment Council, for workers who lose five percent (5%) or more of their working capacity (if any).

d) Valid invoices and documents certifying treatment of injuries caused by the occupational disease, issued by health establishments.

5. Documents proving amounts of money paid by the construction contractor for the worker’s injury or death caused by the occupational accident or occupation within the scope of insurance (if any).

6. Other relevant documents (if any).

Section 4

COMPULSORY CIVIL LIABILITY INSURANCE FOR THIRD PARTY

Article 28. The insured object and minimum insurance sum

1. The object of the compulsory civil liability insurance for third party is the civil liability of the contractor for a third party during the construction period as prescribed by law.

2. The minimum premium of compulsory civil liability insurance for third party shall comply with Clause 7 Article 1 of Decree No. 20/2022/ND-CP.

Article 29. Scope of insurance and exclusion of insurance liability

1. Scope of insurance

Insurance enterprises shall pay as indemnities the construction contractors the money amounts to be indemnified by the construction contractors to third parties for non-contractual damages to health, life, and property directly arising during the construction process and related legal costs (if any) within the scope of insurance liability as agreed in the insurance contracts, except for the cases specified in Clause 2 of this Article.

2. Exclusion of insurance liability

Cases of exclusion of insurance liability for compulsory civil liability insurance for third party include:

a) Exclusion of general insurance liability prescribed in Article 5 of this Circular.

b) Loss arising from environmental pollution or contamination. This exclusion does not apply to damage to health, life and property arising from environmental pollution or contamination or unforeseen risks.

c) Damage to property on the ground or to health or life caused by displacement or weakening of load-bearing parts and structural geology.

d) Damage being the result of an accident caused by a motor vehicle or a vessel, barge or aircraft covered by the vehicle owner’s civil liability insurance against a third party.

dd) Liability as a result of injury or illness caused to workers of the project owner or contractor in connection with the insured work.

e) Loss or damage to property owned or under the lawful management and use of the project owner or contractor or the worker of one of the above persons.

g) Loss related to use asbestos or any materials containing asbestos.

Article 30. Insurance period

Duration of compulsory civil liability insurance for third party is a specific span, counting from the date of starting to the date of finishing the construction, based on the construction contract and written in the insurance contract.

Article 31. Premiums and payment of premiums

1. The premium of the compulsory civil liability insurance for third party shall be equal to 5% of the compulsory insurance premium for a corresponding underway work specified at Points a and b Clause 1 Article 10 of this Circular. According to the level of risk of the insured object, the insurance enterprise may increase or reduce the premium up to twenty-five percent (25%) of the premium.

2. Time limits for payment of premium of compulsory civil liability insurance for third party shall comply with Circular No. 50/2017/TT-BTC.

For insurance contracts for third-party civil liability of construction works of construction investment projects specified in the Government's Decree No. 50/2021/ND-CP dated April 01, 2021, amending and supplementing a number of articles the Government’s Decree No. 34/2015/ND-CP, prescribing in detail construction contracts, insurance enterprises and insurance buyers shall reach an agreement on time limits for premium payments which are not later than the payment schedule of the construction contracts and include them in the insurance contracts. In any cases, the date of premium payment must not be beyond the insurance period.

3. Premiums shall be finalized under Clause 5 Article 10 of this Circular.

Article 32. Liability to buy insurance

Construction contractors must by compulsory civil liability insurance for third party when performing the construction.

Article 33. Principles of indemnification

1. When a third party suffers an out-of-contract damage to health, life, or property directly arising during the construction process within the insurance responsibility, the insurer will be responsible for paying the insurance buyer according to the following compensation levels:

a) The specific level of compensation for health and life shall be determined according to each type of injury according to the Table of payment of compensation for damage to health and life as prescribed in Appendix V to this Circular or according to the agreement (if any) between the insured and the damage sufferer or the heirs of the damage sufferer (in case the damage sufferer is dead) or the representative of the damage sufferer (in case the damage suffer loses his/her civil act capacity under a court decision or is under six years old) but must not exceed the compensation level specified in Appendix V to this Circular. In case the court decision is available, the compensation level shall be determined based on the court decision but must not exceed the one specified in Appendix V to this Circular.

b) The specific level of compensation for property/an accident shall be determined according to the actual damage and fault level, but must not exceed the level of insurance liability as agreed in the insurance contract.

c) Relevant legal costs (if any).

The total insurance sum paid by insurance enterprises specified in this Clause must not exceed the one prescribed in Clause 7 Article 1 of Decree No. 20/2022/ND-CP.

2. Upon receiving a third party’s claim, the insurance buyer and insurance enterprise shall coordinate with each other in the settlement of such claim as follows:

a) The insurance buyer shall:

- Immediately notify it to the insurance enterprise via proper means of communication, then send a written notice within fourteen (14) days after receiving a third party’s claim.

- Take all measures within its capacity to minimize the loss.

- Provide documents in an indemnification dossier as required in Clauses 1, 2, 3, 4, 5 and 7 Article 34 of this Circular, and facilitate verification of those documents by the insurance enterprise.

- Take, or coordinate with or permit the insurance enterprise to, take all actions and measures which may be necessary or required by the insurance enterprise to protect the insurance enterprise’s interests after indemnifying for losses within its insurance liability prescribed in this Circular.

b) The insurance enterprise shall:

- Conduct loss assessment as prescribed by law and make a written record of assessment of the causes and extent of damage in accordance with Clause 6 Article 34 of this Circular.

- Provide guidance for the insurance buyer and coordinate with the insurance buyer and related agencies, organizations and individuals in the collection of sufficient documents for making an indemnification dossier.

- Coordinate with the insurance buyer in settling the third party’s claim request within the insurance liability when an insured event occurs.

- In case of accepting to pay indemnity, issue a written notice of indemnification.

- In case of refusing to pay indemnity, issue a written notice stating the reason.

Article 34. Indemnification dossier

An insurance enterprise shall coordinate with the insurance buyer, the insured and related agencies and organizations in collecting relevant documents for preparing an indemnification dossier. An indemnification dossier for compulsory civil liability insurance for third party must comprise:

1. The insurance buyer’s written claim.

2. Documents relating to the insured object, including the insurance contract and certificate of insurance.

3. The third party’s written claim against the insured.

4. Documents proving damage to health and life of the third party (copies certified by a health establishment, or by the insurance enterprise after comparing with the originals) provided by the insurance buyer and the insured. Depending on the extent of injury, one or some of the following documents is/are required:

a) Injury certificate.

b) Hospital discharge paper.

c) Documents certifying surgery.

d) Medical records.

dd) Death certificate extract or death certificate or written certification of public security agency or examination result of forensic examination agency.

5. Documents proving loss of or damage to property, including:

a) Construction incident records (notarized copies or copies made by the party making such records) as prescribed in Article 47 of Decree No. 06/2021/ND-CP (if any).

b) Valid invoices and documents in case of property repair or replacement.

6. A written record of assessment of causes and extent of loss, prepared by the insurance enterprise or its authorized person.

7. Other relevant documents (if any).

Section 5

FINANCIAL REGIME AND REPORTING REGIME

Article 35. Financial regime

Insurance enterprises providing compulsory insurance in construction investment activities shall:

1. Comply with the financial regime prescribed in the law on insurance business and relevant laws.

2. Separately account premium revenues, insurance commissions, indemnities and other expenses related to compulsory insurance in construction investment activities.

Article 36. Reporting regime

Insurance enterprises shall make and send to the Ministry of Finance reports on compulsory insurance in construction investment activities as follows:

1. Reports: Insurance enterprises shall make quarterly and annual reports according to the forms in Appendices VI, VII and VIII to this Circular and send them to the Ministry of Finance as follows:

a) Quarterly reports: The period for closing data starts from the first day of the beginning month of a reporting period to the 30^th or 31^th of the last month of the quarter of the reporting period. The time limit for sending a quarterly report is within thirty (30) days after the last day of a quarter.

b) Annual reports: The period for closing data starts from January 01 of a reporting period to December 31 of the reporting period. The time limit for sending an annual report is ninety (90) days after the last day of a year.

Method of reporting: To send reports directly or by emails or by post or via the reporting system of the Ministry of Finance (in case where the Ministry of Finance's reporting system is launched).

2. In addition to reports prescribed in Clause 1 of this Article, insurance enterprises shall make and send irregular reports upon request of the Ministry of Finance in the following cases: Reports as requested by the National Assembly, the National Assembly Standing Committee, the Government, and the Prime Minister; synthesis and assessment reports to formulate the mechanisms and policies; reports when there is information about violations of regulations on compulsory insurance in construction investment activities, and other irregular reports to meet the requirements for information about abnormal issues.

Chapter III

IMPLEMENTATION PROVISIONS

Article 37. Effect

1. This Circular takes effect on October 01, 2022 and replaces Circular No. 329/2016/TT-BTC.

2. Compulsory insurance contracts in construction investment activities, civil liability insurance contracts for third parties signed before the effective date of this Circular shall continue to be performed in accordance with the law at the time of entering into insurance contracts. In case of amending or supplementing insurance contracts with the amendments and supplements specified in this Circular, the provisions of this Circular shall prevail.

3. If legal normative documents mentioned in this Circular are amended, supplemented or replaced, such amendments, supplements or replacements shall be applied.

4. Any problem arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and settlement./.

* All Appendices are not translated herein.