Decision No. 23/2003/QD-BTC dated February 25, 2003 of the Ministry of Finance promulgating the regulation, premium table and compulsorily insured liability levels for motorized vehicle owners’ civil liability

DECISION

PROMULGATING THE REGULATION, PREMIUM TABLE AND COMPULSORILY INSURED LIABILITY LEVELS FOR MOTORIZED VEHICLE OWNERS’ CIVIL LIABILITY

THE MINISTER OF FINANCE

Pursuant to the October 28, 1995 Civil Code;

Pursuant to December 9, 2000 Insurance Business Law No. 24/2000/QH10;

Pursuant to the Government’s Decree No. 178/CP of October 28, 1994 defining the functions, tasks, powers and organizational apparatus of the Ministry of Finance;

Pursuant to the Government’s Decree No. 115/1997/ND-CP of December 17, 1997 on the regime of compulsory insurance for motorized vehicle owners’ civil liability;

Pursuant to the Government’s Resolution No. 13/2002/NQ-CP of November 19, 2002 on measures to check the rise in, and proceed to reduce, traffic accidents and congestion;

At the proposal of the director of the Department for Finance of Banks and Financial Institutions,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation, premium table and compulsorily insured liability levels for motorized vehicle owners’ civil liability.

Article 2.- This Decision takes effect 15 days after its publication on the Official Gazette and replaces the Finance Minister’s Decision No. 299/1998/QD-BTC of March 16, 1998 promulgating the Regulation, premium table and compulsorily insured liability levels for motorized vehicle owners’ civil liability. The insurance contracts already entered into before the effective date of this Decision shall continue to be performed according to the law provisions effective at the time of contract entry.

Article 3.- The director of the Department for Finance of Banks and Financial Institutions, the director of the Ministry’s Office and the heads of the concerned units shall have to inspect and supervise the implementation of this Decision.

REGULATION

ON COMPULSORY INSURANCE FOR MOTORIZED VEHICLE OWNERS’ CIVIL LIABILITY
(Promulgated together with Decision No. 23/2003/QD-BTC of February 25, 2003 of the Finance Minister)

Chapter I

GENERAL PROVISIONS

Article 1.- Objects and scope of application:

1. The insurance enterprises and the owners of motorized vehicles, including foreign owners using motorized vehicles on the territory of the Socialist Republic of Vietnam, are obliged to abide by the regime of compulsory insurance for civil liability of the motorized vehicle owners.

2. The regime of compulsory insurance for civil liability of the motorized vehicle owners prescribed in this Regulation covers:

- Insurance for the liability to pay compensation for human and property damage outside the contracts caused by motorized vehicles to a third person;

- Insurance for civil liability of the motorized vehicle owners for property damage or loss of life caused to passengers under the passenger transport contracts.

Article 2.- Interpretation of terms

In this Regulation the following concepts are construed as follows:

1. The third persons are persons suffering from physical and property damage caused by motorized vehicles, excluding the following persons:

- Drivers and driver assistants onboard such vehicles;

- People and passengers on such vehicles;

- Vehicle owners, except where the owners have transferred to other persons the ownership and use of such vehicles.

2. Passengers are persons transported on vehicles under the passenger transport contracts in any forms specified in the Civil Code.

3. The insured liability level is the maximum sum of money an insurance enterprise may have to pay for human and property damage in each accident that occurs within the scope of insured liability.

4. An intentional act of causing damage means the case where a person is fully aware that his/her act shall cause damage to other person(s) but still commits such act and let the damage occur at will or not at will.

Article 3.- Insurance contracts:

The insurance certificates issued by insurance enterprises at the request of the insured constitute the evidence of the signing of contracts between the motorized vehicle owners and the insurance enterprises. The principal contents of an insurance certificate are prescribed in Appendix 1- Contents of insurance certificates, promulgated together with the Finance Minister’s Decision No. 23/2003/QD-BTC (not printed herein).

Article 4.- Insurance premiums and the insured liability levels

The insurance enterprises and the motorized vehicle owners shall have to implement the insurance according to the premium table and the minimum insured liability levels promulgated together with Decision No. 23/2003/QD-BTC of the Finance Minister.

The insurance enterprises may negotiate with the vehicle owners to effect the insurance according to the premium table and a higher liability level or a broader scope of insured risks in compliance with the insurance regulation, premium table and insured liability levels promulgated together with Decision No. 23/2003/QD-BTC of the Finance Minister

Article 5.- Insurance effect:

The insurance effect shall begin and expire under the provisions stated in the insurance certificates. The insurance enterprises shall grant insurance certificates only after the motorized vehicle owners fully pay the insurance premiums (except otherwise agreed upon in writing).

During the effective duration stated in the insurance certificate, if the vehicle ownership is transferred and the motorized vehicle owner does not request the cancellation of the insurance contract, all insurance interests related to the insured vehicle shall remain effective for the new owner of the motorized vehicle.

Article 6.- Contract cancellation:

In cases where a motorized vehicle owner requests the cancellation of the insurance contract, he/she shall have to notify in writing the insurance enterprise thereof 15 days in advance. If, within 15 days from the receipt of the cancellation notice, the concerned insurance enterprise has no opinion, the insurance contract is automatically cancelled and the insurance enterprise shall refund 80% of the insurance premium for the cancelled period except for cases where during the period the insurance contract remains effective occurs the insured incident related to the vehicle for which the insurance is requested to be cancelled.

Article 7.- Responsibilities of the motorized vehicle owners:

1. When requesting insurance, the motorized vehicle owners shall have to declare fully and honestly the contents of the written insurance requests.

2. When traffic accidents occur, the motorized vehicle owners shall have the responsibility:

2.1. To provide rescue and first aid, limiting human and property damage, protect the accident scenes and immediately report thereon to the insurance enterprises for coordinated settlement. Within five days from the occurrence of the accident (unless when they have plausible reasons), the motorized vehicle owners must send the accident notices to the concerned insurance enterprises;

2.2. Not to remove, disassemble or repair the property without the consent of the insurance enterprises, except where it is necessary to do so to ensure the safety for, prevent or limit damage to, people and property, or where it is so demanded by the competent agencies.

2.3. To reserve the right to lodge complaints and transfer to the insurance enterprises the right to ask for compensation within the amount of money the insurance enterprises already indemnified, enclosed with all necessary relevant vouchers.

3. The motorized vehicle owners must be honest in the gathering and provision of documents and vouchers in the compensation-claiming dossiers and create favorable conditions for the insurance enterprises to verify the authenticity of such documents and vouchers.

4. In cases where the purpose of using a vehicle is altered according to the provisions of the premium table and the insured liability levels for the motorized vehicle owners’ civil liability, promulgated together with Decision No. 23/2003/QD-BTC of the Finance Minister, the owner of the motorized vehicle must promptly inform the insurance enterprise thereof for properly readjusting the insurance premium rates.

If the motorized vehicle owner fails to fulfill the above-mentioned responsibilities, the insurance enterprise may refuse part or whole of the indemnities corresponding to the damage caused due to the motorized vehicle owner’s fault.

Article 8.- Responsibilities of insurance enterprises:

1. To guide and create favorable conditions for the motorized vehicle owners to buy the insurance.

2. For accidents, if deeming it necessary, the concerned insurance enterprises must closely coordinate with the involved motorized vehicle owners and functional agencies right from the beginning to settle the cases. If necessary, the insurance enterprises shall have to pay in advance for necessary and reasonable expenses within the scope of insured liability in order to best remedy the consequences of the accidents.

3. The insurance enterprises shall have to coordinate with the police offices in gathering necessary papers related to the accidents within the scope of insured liability in order to determine the cause and extent of damage.

4. When the compensation dossiers are complete and valid, the insurance enterprises shall have to consider and pay the damages within the compensation time limit specified in Article 13 below.

Chapter II

SPECIFIC PROVISIONS

Article 9.- Insured liability:

Within the scope of insured liability levels stated in the insurance certificates, the insurance enterprises shall have to pay the motorized vehicle owners the amounts of money they have paid in compensation under the Civil Code for the damage caused to the third persons and passengers transported on their vehicles under the transport contracts. Specifically:

1. For human damage:

Payment of reasonable expenses for rescue and treatment, health recuperation, incomes actually lost or reduced, feeding up and care of the victims before they die, reasonable funeral costs..., corresponding to the extent of the vehicle owner’s fault.

The vehicle owners and insurance enterprises may agree on the payment modes according to the Table on the payment of compensation for human damage, promulgated together with Decision No. 23/2003/QD-BTC of the Finance Minister.

2. For property damage: To be compensated according to the actual damage and the extent of fault of the motorized vehicle owner.

3. Necessary and reasonable expenses for preventing and limiting the accident-related damage, which the motorized vehicle owners have already paid.

The total of the above-said compensations and expenses must not exceed the total insured liability level stated in the insurance certificates as well as the actual amounts of money the vehicle owners have to pay to the victims under civil conciliation or court decisions.

Where a vehicle owner enters into two or more insurance contracts for the same motorized vehicle, the compensation amount shall be calculated on only one insurance contract. The insurance enterprise which issues the first insurance contract shall have to pay the compensation and recover the compensation amount equally divided to the insurance contracts .

Article 10.- Expertise of damage:

Every property damage within the insured liability shall be expertised by the insurance enterprises (except otherwise agreed upon) to the witness of the motorized vehicle owners, the third persons or the lawful representatives of the involved parties in order to determine the cause and the extent of damage caused by the accidents.

Where the motorized vehicle owner disagrees with the causes and extents of damage determined by the insurance enterprise, the two sides shall agree to choose a professional technical expert to perform the expertise. The conclusion of the professional technical expert shall serve as the basis for determining the damage. If the conclusion of the professional technical expert is different from the conclusion of the insurance enterprise’s expert, the insurance enterprise shall have to bear the expertising cost. If the conclusion of the professional technical expert is the same as the conclusion of the insurance enterprise’s expert, the motorized vehicle owner shall have to bear the expertising cost.

In special cases where the insurance enterprises are unable to make a record on the expertise, they can base on the reports and conclusions of competent functional agencies as well as the gathered material evidences (photos, declarations of the involved parties...) to determine the causes and extent of damage.

Article 11.- Insurance exclusion:

The insurance enterprises shall not be liable to pay indemnities for the damage caused in the following circumstances:

1. Acts of deliberately causing damage by the vehicle owners/drivers or victims;

2. Vehicles having no technical and environmental safety inspection certificates (for types of vehicles required to have such certificates);

3. Drivers having no valid driving licenses (for motorized vehicles that require driving licenses); drivers found with alcoholic strength exceeding the limit currently prescribed by law as concluded in writing by competent State bodies, or other stimulants banned by law from use .

4. Vehicles used for sport race, illegal race, post-repair test run (except otherwise agreed upon);

5. Vehicles running into no-entry roads or restricted areas;

6. Damage that entails indirect consequences such as decrease in commercial values, damage associated with the use and exploitation of damaged property;

7. Damage to property stolen or robbed in accidents;

8. War and causes similar to war;

9. Damage caused to special property including gold, silver and gems, money and papers of monetary value, antiques, precious and rare paintings and photos, human corpses and remains.

Article 12.- Compensation-claming dossiers.

A compensation dossier consists of the following papers:

1. The accident notice and compensation claim.

2. Papers proving the human damage such as the victim’s injury certificate, hospital discharge paper, surgery card and papers related to care and treatment expenses, the victim’s death certificate, hospitalization documents, funeral cost.

3. Papers proving the property damage such as invoices of repair or replacement of property damaged due to the accident; papers proving the necessary and reasonable expenses paid by the vehicle owner to minimize damage or follow the insurance enterprise’s instructions.

4. The written accident inspection conclusion of the police; if this is not available, the compensation shall be based on the insurance enterprise’s expertise report.

Chapter III

DISPUTE SETTLEMENT

Article 13.- Time limits for claiming, paying and/or complaining about compensation:

1. The time limit for the motorized vehicle owners to claim compensation is one year from the date the accident occurs except for cases of delay due to objective reasons or force majeure as prescribed by law.

2. The time limit for the insurance enterprises to pay indemnities is fifteen (15) days after receiving the complete and valid compensation dossiers and shall not be longer than 30 days if the verification of the dossiers must be conducted.

In case of refusal to pay indemnities, the insurance enterprises shall have to notify in writing the motorized vehicle owners of the reasons therefor within 30 days after receiving the insurance compensation-claming dossiers.

3. The statute of limitations for initiating lawsuits regarding the insurance compensation is three (3) years from the date the insurance enterprises pay or refuse to pay the indemnities. Past that time limit, all complaints shall be invalid.

4. In cases where a third person or a passenger under a transport contract, who suffered from physical and property damage caused by the insured vehicle, lodges a complaint, directly demanding the involved insurance enterprise pay the indemnities, the latter shall have to contact the motorized vehicle owner in order to make compensation in strict accordance with the provisions of this Regulation.

Article 14.- Settlement of disputes

All disputes arising from insurance contracts, if impossible to be settled through negotiations between the involved parties, shall be brought to court in Vietnam for settlement.

PREMIUM TABLE AND INSURED LIABILITY LEVELS FOR MOTORIZED VEHICLE OWNERS’ CIVIL LIABILITY
(Promulgated together with Decision No. 23/2003/QD-BTC of February 25, 2003 of the Minister of Finance)

1. The insured liability levels.

1.1. For people: VND 12 million/person (for third persons and passengers under passenger transport contracts)

1.2. For property: VND 30 million /case (for third persons).

2. Insurance premiums (for third persons and passengers under passenger transport contracts).

3. Other stipulations:

3.1. Taxis:

- For those of under 6 seats, to be calculated as being equal to 150% of the premium for automobiles of under 6 seats used for business as specified in Section IV.A.1

- For those of over 6 seats, to be calculated according to the premiums for automobiles of the same numbers of seats used for business as specified in Section IV.A

3.2. Buses: To be calculated according to the insurance premiums for automobiles of the same numbers of seats not used for business specified in Section III.

3.3. Special-use automobiles:

- To be calculated according to the insurance premiums for cargo-transporting automobiles of the same tonnage not used for transport business as specified in Section III.B

* Particularly for frozen goods-transporting automobiles, to be calculated according to the premiums for cargo-transporting automobiles of the same tonnage used for transport business as specified in Section IV.B

3.4. Special-use vehicular machines

To be calculated according to the insurance premiums of cargo-transporting automobiles of under 3 tons not used for transport business as specified in Section III.A.1

3.5. Trailers: To be calculated as being equal to 30% of the insurance premiums of the vehicles pulling such trailers.

3.6. Short-term and long-term premium tables

3.6.1. Short-term premiums:

3.6.2. Long-term premiums:

(The above insurance premiums are exclusive of 10% VAT)