Decision No. 23/2007/QD-BTC dated April 09, 2007 of the Ministry of Finance promulgating the Regulation on compulsory insurance for civil liability of motor vehicles' owners

DECISION

PROMULGATING THE REGULATION ON COMPULSORY INSURANCE FOR CIVIL LIABILITY OF MOTOR VEHICLES' OWNERS

THE MINISTER OF FINANCE

Pursuant to the June 4, 2005 Civil Code;
Pursuant to December 9, 2000 Insurance Business Law No. 24/2000/QH10;
Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Government's Decree No. 115/1997/ND-CP of December 17, 1997, on the compulsory insurance for civil liability of motor vehicles' owners;
Pursuant to the Government's Resolution No. 13/2002/ND-CP of November 19, 2002, on measures to check the rise in, and proceed to gradually reduce, traffic accidents and congestion;
At the proposal of the director of the Insurance Department,

DECIDES:

Article 1.- To promulgate together with this Decision the rule, the table of premium rates and the levels of compulsory insurance for civil liability of motor vehicles' owners.

Article 2.- Insurance enterprises licensed to deal in compulsory insurance for civil liability of motor vehicles' owners shall deduct at least 2% of collected premiums of compulsory insurance for civil liability of motor vehicles' owners to contribute to the Fund for Road Traffic Safety Propaganda and Assurance managed and used by the Vietnam Insurance Association. The Fund is used for the following purposes:

a/ Organizing propaganda and education about road traffic safety and compulsory insurance for civil liability of motor vehicles' owners;

b/ Financing and supplying means and facilities in support of the prevention and limitation of road traffic accidents;

c/ Coordinating with competent agencies in placing road signs, building byroads and works for the purpose of preventing accidents and reducing risks for the insured.

d/ Supporting the payment of humanitarian compensations for damage caused to third parties and passengers onboard vehicles when it is impossible to identify accident-causing vehicles or the vehicles are not covered by insurance.

e/ Other activities to ensure road traffic order and safety.

Specific levels of contributions to, and the mechanism of management, use and settlement of the Fund for Road Traffic Safety Propaganda and Assurance shall be agreed in advance by the Vietnam Insurance Association and enterprises dealing in compulsory insurance for civil liability of motor vehicles' owners.

Article 3.- Insurance enterprises may not conduct sales promotion in any form for compulsory insurance for civil liability of motor vehicles' owners.

Article 4.- This Decision takes effect 15 days after its publication in "CONG BAO" and replaces the Minister of Finance's Decision No. 23/2003/QD-BTC of February 25, 2003, promulgating the rules, table of premium rates and levels of compulsory insurance for civil liability of motor vehicles' owners. Insurance contracts entered into before the effective date of this Decision continue to be performed according to the provisions of law effective at the time of their entry.

Article 5.- The director of the Insurance Department and heads of concerned units shall inspect and supervise the implementation of this Decision.

RULE

FOR COMPULSORY INSURANCE FOR CIVIL LIABILITY OF MOTOR VEHICLES' OWNERS
(Promulgated together with the Minister of Finance's Decision No. 23/2007/QD-BTC of April 9, 2007)

Chapter I

GENERAL PROVISIONS

Article 1.- Subjects and scope of application

1. Insurance enterprises and owners of motor vehicles (including foreigners) that use motor vehicles in the territory of the Socialist Republic of Vietnam are obliged and responsible to observe the regulation on compulsory insurance for civil liability for motor vehicles' owners.

2. The compulsory insurance for civil liability of motor vehicles' owners under this Rule covers:

- Insurance for liability to pay compensations for human and/or property damage outside contract caused by motor vehicles to a third party;

- Insurance for civil liability of motor vehicles' owners for injuries and death of passengers under passenger transport contracts.

Article 2.- Interpretation of terms

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

1. Third party means persons suffering from injuries and/or property damage caused by the use of a motor vehicle, excluding the following persons:

- Driver and driver assistant onboard that vehicle;

- Persons and passengers onboard that vehicle;

- The vehicle's owner, except when he/she has transferred the possession or use of that vehicle to another person.

2. Passengers means persons transported on a vehicle under a passenger transport contract in any form specified in the Civil Code.

3. Insurance liability level means the maximum sum of money an insurance enterprise might have to pay for human and/or property damage in an insured accident.

4. Intentional act of causing damage means an act taken by a person who is fully aware that his/her act will cause damage to other persons but still takes it and lets the damage occur at will or against will.

Article 3.- Insurance policies

An insurance certificate issued by an insurance enterprise to an insured party constitutes an evidence of the entry into a civil liability insurance contract between a motor vehicle's owner and that insurance enterprise. The principal contents of an insurance certificate are specified in Appendix 1 ' Contents of insurance certificates, to the Minister of Finance's Decision No. 23/2007/QD-BTC.

Article 4.- Insurance premiums and insurance liability levels

Insurance enterprises and motor vehicles' owners shall provide insurance according to the table of premium rates and levels of liability to insure the civil liability of motor vehicles' owners promulgated together with the Minister of Finance's Decision No. 23/2007/QD-BTC.

Insurance enterprises may negotiate with motor vehicles' owners on insurance according to a table of premium rates and liability levels higher or on a scope of insured risks wider than the insurance rule, table of premium rates and insurance liability levels promulgated together with the Minister of Finance's Decision No. 23/2007/QD-BTC.

Article 5.- Insurance duration and validity

1. The duration of compulsory insurance for civil liability of motor vehicles' owners is at least one (1) year.

2. Insurance validity shall begin and expire according to the provisions of insurance certificates. Insurance enterprises shall issue insurance certificates only after motor vehicles' owners fully pay insurance premiums (unless otherwise agreed upon in writing).

3. During the validity duration stated in an insurance certificate, if the ownership of the motor vehicle is transferred and the motor vehicle's owner does not request revocation of the insurance policy, all insurance benefits related to the civil liability of the vehicle's owner remain effective for the new owner of the motor vehicle.

Article 6.- Revocation of insurance policies

In case of request for revocation of an insurance policy, a motor vehicle's owner shall notify in writing the insurance enterprise thereof fifteen (15) days in advance. Within fifteen (15) days after being notified of the revocation, if the insurance enterprise gives no opinion, the insurance policy is automatically revoked, and the insurance enterprise shall refund 80% of the insurance premium paid for the revocation period to the vehicle's owner. The insurance enterprise is not required to refund the insurance premium in case an insured event related to the vehicle for which the insurance is requested to be revoked occurs in the validity duration of the insurance policy.

Article 7.- Responsibilities of motor vehicles' owners and drivers

1. When requesting insurance, motor vehicles' owners shall declare fully and honestly the contents of their insurance certificates as specified in the Minister of Finance's Decision No. 23/2007/QD-BTC.

2. When a traffic accident occurs, motor vehicles' owners or drivers shall:

2.1. Actively rescue and render first aid to victims, thereby limiting human and property damage, protect the accident scene and promptly report the accident to the insurance enterprise for coordinated solution and to the nearest local police office or administration.

2.2. Within five days after the occurrence of the accident (unless there exists a justifiable reason) the motor vehicle's owner shall send to the insurance enterprise an accident notice as defined in Appendix 2 ' Notification of accidents and request for compensations, to the Minister of Finance's Decision No. 23/2007/QD-BTC;

2.3. Not remove, disassemble or repair the damaged property without the consent of the insurance enterprise, except when it is necessary to do so to ensure the safety for, prevent and limit damage to, humans and property, or it is so requested by a competent agency;

2.4. Reserve the right to lodge complaints and transfer to the insurance enterprise the right to claim compensations within the sum of money the insurance enterprise has indemnified, enclosed with all necessary relevant documents.

3. Motor vehicles' owners or drivers shall honestly collect and supply documents and papers in the compensation claim dossiers and create favorable conditions for the insurance enterprise to verify the authenticity of those documents and papers.

4. In case of change in the use purpose of a motor vehicle as defined in the table of premium rates and the levels of liability to insure the civil liability of motor vehicles' owners promulgated together with the Minister of Finance's Decision No. 23/2007/QD-BTC, the motor vehicle's owner shall promptly notify the change to the insurance enterprise for adjustment of insurance premium as appropriate.

If motor vehicles' owners and/or drivers fail to fulfill the above responsibilities, the insurance enterprise may refuse to pay part or the whole of the indemnity corresponding to the damage caused due to the fault of the motor vehicles' owners and/or drivers.

Article 8.- Responsibilities of insurance enterprises

1. To guide and create favorable conditions for motor vehicles' owners to buy insurance.

2. To fully supply information on insurance policies and clearly explain the rule for compulsory insurance for civil liability of motor vehicles' owners, promulgated together with the Minister of Finance's Decision No. 23/2007/QD-BTC, to motor vehicles' owners.

3. Upon the occurrence of an accident, to closely coordinate with involved motor vehicles' owners or drivers and functional agencies right from the beginning to remedy the accident. In case of necessity, the insurance enterprise shall promptly pay in advance necessary and reasonable expenses within the scope of its insurance liability in order to remedy consequences of the accident.

4. To coordinate with local police offices and administrations as well as involved parties in gathering necessary relevant papers in order to identify the cause of the accident and the extent of damage caused by the accident within the scope of the insurance liability.

5. If accident-causing motor vehicles are insured and their owners are dead, to pay compensations directly to third parties on behalf of motor vehicles' owners within the scope of the insurance liability defined in this insurance rule.

6. To consider and pay compensations within the time limit specified in Article 13 below upon receiving complete and valid compensation claim dossiers.

Chapter II

SPECIFIC PROVISIONS

Article 9.- Insurance liability

Within the scope of insurance liability level stated in an insurance certificate, an insurance enterprise shall pay to a motor vehicle's owner the sum of money that owner has paid as compensation to the third party and passengers for damage caused by the use of the motor vehicle. Specific compensation levels are as follows:

1. For human damage:

1.1. The compensation level shall be determined based on a court ruling.

1.2. If no court ruling is available, the compensation level shall be determined based on the table of compensation levels for human damage specified in Appendix 3 to the Minister of Finance's Decision No. 23/2007/QD-BTC.

1.3. If a motor vehicle's owner enters into many insurance policies for the same motor vehicle, the level of compensation shall be the total of human damage compensation levels of those insurance policies. The total compensation level of policies must not exceed the sum of money actually paid by the vehicle's owner to the victim and shall be equally divided to those insurance policies.

2. For property damage:

2.1. The compensation level shall be determined according to actual damage and the degree of fault of the motor vehicle's owner.

2.2. If a motor vehicle's owner enters into many insurance policies for the same motor vehicle, the compensation amount shall be calculated on only one insurance policy. The insurance enterprise that issues the first insurance policy shall pay the compensation and recover the compensation amount equally divided to the insurance policies.

3. Necessary and reasonable expenses already paid by the vehicle's owner for preventing and limiting the accident-related damage.

Article 10.- Assessment of damage

All property damage covered by the insurance liability shall be assessed by insurance enterprises or assessment companies hired by insurance enterprises (unless otherwise agreed) to the witness of motor vehicles' owners, third parties or lawful representatives of involved parties in order to determine the causes of accidents and the extent of the damage.

If a motor vehicle's owner disagrees with the cause of the accident and the extent of the damage determined by an insurance enterprise, the two parties shall agree to choose a professional technical assessor to conduct the assessment. Conclusions made by the professional technical assessor will serve as a basis for determination of damage. If these conclusions are different from those made by the insurance assessor, the insurance enterprise shall bear assessment expenses. If these conclusions are similar to those made by the insurance assessor, the motor vehicle's owner shall bear assessment expenses.

In special cases where the insurance enterprise is unable to make to a written record of assessment, it may base itself on reports or conclusions of competent functional agencies and gathered material evidence (photos, declarations of involved parties) to determine the cause of the accident and the extent of damage.

Article 11.- Insurance exemption

An insurance enterprise is not liable to pay compensations for damage caused in the following cases:

1. Acts of deliberately causing damage by vehicles' owners or drivers or victims;

2. Drivers of accident-causing vehicles deliberately escape and shirk civil liability of motor vehicles' owners or drivers;

3. Drivers have no valid driver licenses for types of motor vehicles that require driver licenses;

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

5. Properties are stolen or robbed in accidents;

6. War and warlike circumstances occur;

7. Damage is caused to special properties, including gold, silver, gems, money, papers of monetary value, antiques, precious and rare paintings and pictures, human corpses and remains.

Article 12.- Compensation claim dossiers

A compensation claim dossier comprises the following documents:

1. Documents to be collected and supplied by the motor vehicle's owner:

1.1. The accident report and compensation claim specified in Appendix 2 promulgated together with the Minister of Finance's Decision No. 23/2007/QD-BTC;

1.2. Documents related to the vehicle and driver;

1.3. Papers proving human damage, such as the victim's injury certification, hospital discharge paper, surgery certification or death certificate;

1.4. Papers proving property damage, such as invoices of repair or replacement of property damaged; papers proving the necessary and reasonable expenses paid by the vehicle owner to minimize damage or comply with the insurance enterprise's instructions.

2. Documents to be collected by the insurance enterprise:

2.1. The written record of the accident scene investigation, the accident scene plan and photos;

2.2. The written record of the inspection of vehicles related to the accident;

2.3. The preliminary report on initial results of investigation of the accident;

2.4. When it is impossible to collect all above documents, the payable compensation shall be based on the written record of assessment of the insurance enterprise or conclusions of the specialized technical assessors defined in Article 10 of this Rule.

3. Documents specified in Clauses 1 and 2 of this Article must be originals. If it is possible to keep the originals, the insurance enterprise shall verify copies against their originals.

Chapter III

DISPUTE SETTLEMENT

Article 13.- Time limit for claiming, paying and complaining about compensation

1. The time limit for a motor vehicle's owner to claim compensation is one (1) year from the date of occurrence of the accident, except for delay due to objective reasons and force majeure circumstances specified by law.

2. The time limit for an insurance enterprise to pay a compensation is fifteen (15) days from the date of receipt of a complete and valid compensation claim dossier, and thirty days (30) days in case of necessity to verify the dossier.

In case of refusal to pay a compensation, the insurance enterprise shall notify in writing the motor vehicle's owner of the reason therefor within thirty days (30) days from the date of receipt of the compensation claim dossier.

3. The statute of limitations for instituting a lawsuit about insurance compensation is three (3) years from the date the insurance enterprise pays or refuses to pay the compensation. After the expiration of that time limit, all complaints are invalid.

4. If a third party or a passenger transported under a transport contract, who suffers injuries and property damage caused by an insured vehicle, lodges a complaint directly demanding the involved insurance enterprise pay the compensation, that insurance enterprise shall contact the motor vehicle's owner in order to pay the compensation according to the provisions of this Rule.

Article 14.- Settlement of disputes

Any dispute arising from an insurance policy which cannot be settled through negotiation between involved parties may be brought to a court in Vietnam for settlement.