Decree No. 119/2015/ND-CP dated November 13, 2015 of the Government prescribing compulsory insurance in construction investment activities

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ATTRIBUTE

Decree No. 119/2015/ND-CP dated November 13, 2015 of the Government prescribing compulsory insurance in construction investment activities
Issuing body: GovernmentEffective date:
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Official number:119/2015/ND-CPSigner:Nguyen Tan Dung
Type:DecreeExpiry date:
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Issuing date:13/11/2015Effect status:
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Fields:Construction , Insurance

SUMMARY

The minimum insurance sum is VND 100 million/ workers/case

 

In accordance with the Decree No. 119/2015/ND-CP dated November 13, 2015 of the Government prescribing compulsory insurance in construction investment activities, for insurance for workers on construction sites: The minimum insurance sum is VND 100 million/person/case. The specific indemnities for workers who are injured or die due to labor accidents or occupational diseases must comply with the guidance of the Ministry of Finance.

Similarly, except for works related to national defense, security and state secrets, project owners or contractors, if work insurance premiums are already included in contractual prices, shall buy underway work insurance for works and work items which affect the community safety; construction investment works which greatly affect the environment and are on the list of projects subject to environmental impact assessment; and amending, supplementing or replacing documents (if any); works with special technical requirements and complicated construction conditions as prescribed by the law on construction and relevant laws. Consultancy contractors shall buy construction investment consultancy professional liability insurance for jobs of construction survey and construction design of construction works of grade II or higher grade. Within that, for underway work insurance: The minimum insurance sum is the full value of a completed work which, however, must not be lower than the total value of the construction contract, including the adjusted or added value (if any). For construction investment consultancy professional liability insurance: The minimum insurance sum equals the value of the consultancy or design contract.

Besides, the Decree also prescribes that in order to ensure the financial safety of insurance enterprises and reinsurance enterprises and guarantee the interests of insurance buyers, based on their respective financial capacity and risk appraisal results, insurance enterprises and reinsurance enterprises shall decide to provide compulsory insurance or inward reinsurance in construction investment activities as the compulsory level of retention on each risk or each separate loss does not exceed 10% of the equity.  If insurance enterprises provide outward reinsurance as designated by the insured (fronting), the designated reinsurance rate must not exceed 90% of the insured liability level.

This Decree takes effect on February 10, 2016.
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Effect status: Known

 

THE GOVERNMENT

 
No. 119/2015/ND-CP
THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
 
Hanoi, November 13, 2015
 
DECREE
Prescribing compulsory insurance in construction investment activities[1]
 
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the December 9, 2000 Law on Insurance Business;
Pursuant to the November 24, 2010 Law Amending and Supplementing a Number of Articles of the Law on Insurance Business;
Pursuant to the June 18, 2014 Law on Construction;
At the proposal of the Minister of Finance,
The Government promulgates the Decree prescribing compulsory insurance in construction investment activities.
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Decree provides the responsibility to participate in compulsory insurance, conditions for implementation of compulsory insurance, minimum insurance sums, principles for determination of insurance premium levels, and state management of compulsory insurance in construction investment activities.
Article 2. Subjects of application
This Decree 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, 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. Principles for participation in compulsory insurance in construction investment activities
1. Insurance enterprises, reinsurance enterprises, and foreign inward reinsurance enterprises and organizations must satisfy the conditions for implementation of compulsory insurance in construction investment activities as prescribed in Section 2, Chapter II of this Decree.
2. Insurance enterprises shall provide compulsory insurance in construction investment activities when insurance buyers fully meet the construction capacity conditions specified in the Law on Construction and relevant provisions of law.
3. Project owners, consultancy contractors, and construction contractors (below referred to as insurance buyers), and insurance enterprises shall implement compulsory insurance in construction investment activities according to responsibility, insurance premium levels and minimum insurance sums prescribed in this Decree and guided by the Ministry of Finance.
4. Expenses for purchase of compulsory insurance in construction investment activities must comply with the following regulations:
a/ For underway work insurance: The insurance charges shall be included in the total construction investment amount;
b/ For construction investment consultancy professional liability insurance: The insurance charges shall be included in consultancy product costs;
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ENGLISH DOCUMENTS

Official Gazette
Decree 119/2015/NĐ-CP PDF

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