Joint Circular No. 214/2013/TTLT-BTC-BCA dated December 31, 2013 of the Ministry of Finance and the Ministry of Public Security detailing the implementation of some articles of the Decree No. 130/2006/ND-CP dated November 08, 2006 of the Government providing for the compulsory fire and explosion insurance regime

THE MINISTRY OF FINANCE
THE MINISTRY OF PUBLIC SECURITY

Joint Circular No.  214/2013/TTLT-BTC-BCA dated December 31, 2013 of the Ministry of Finance and the Ministry of Public Security detailing the implementation of some articles of the Decree No. 130/2006/ND-CP dated November 08, 2006 of the Government providing for the compulsory fire and explosion insurance regime

Pursuant to the Decree No. 35/2003/ND-CP dated April 04, 2003 of the Government detailing implementation of a number of articles of Law on fire prevention and fighting;

Pursuant to the Decree No. 130/2006/ND-CP dated November 08, 2006 of the Government providing for the compulsory fire and explosion insurance regime;

Pursuant to the Decree No. 46/2012/ND-CP dated 22/5/2012 of the Government amending and supplementing a number of Articles of Decree No. 35/2003/ND-CP dated 04/4/2003 detailing implementation of a number of Articles of Law on fire prevention and fighting and Decree No. 130/2006/ND-CP dated 08/11/2006 providing for the compulsory fire and explosion insurance regime;

Pursuant to the Decree No. 118/2008/ND-CP dated November 27, 2008 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Decree No. 77/2009/ND-CP dated September 15, 2009 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Public Security;

The Minister of Finance and the Minister of Public Security issue the Joint Circular No.  214/2013/TTLT-BTC-BCA dated December 31, 2013 of the Ministry of Finance and the Ministry of Public Security detailing the implementation of some articles of the Decree No. 130/2006/ND-CP dated November 08, 2006 of the Government providing for the compulsory fire and explosion insurance regime,

Article 1. Scope of regulation

This Circular guides the implementation of compulsory fire and explosion insurance regime for assets of establishments obliged to buy compulsory fire and explosion insurance; responsibilities of insurance enterprises for deducting funds for fire prevention and fighting activities and mechanisms for management of the allocation, settlement and finalization of these funds; responsibilities of competent state agencies.

Article 2. Subjects of application

This Circular applies to agencies, organizations and individuals that have establishments prone to fire or explosion as defined in Appendix 1 to the Decree No. 35/2003/ND-CP of April 4, 2003 of the Government detailing the implementation of a number of articles of the Law on Fire Prevention and Fighting (below referred to as Decree No. 35/2003/ND-CP), Clause 7 Article 1 of  Decree No. 46/2012/ND-CP dated 22/5/2012  of the Government amending and supplementing a number of Articles of Decree No. 35/2003/ND-CP dated 04/4/2003, detailing the implementation of a number of articles of the Law on Fire Prevention and Fighting and Decree No. 130/2006/ND-CP dated 08/11/2006  providing for compulsory fire and explosion insurance regime (hereinafter referred to as Decree No. 46/2012/ND-CP), insurance enterprises licensed to conduct compulsory fire and explosion insurance business and competent state agencies.  

Article 3. Implementation of the compulsory fire and explosion insurance regime

1. Agencies, organizations and individuals that have establishments prone to fire or explosion as defined in Appendix 1 to the Government s Decree No. 35/2003/ND-CP and Clause 7 Article 1 Decree No. 46/2012/ND-CP are obliged to buy compulsory fire and explosion insurance for assets of their establishments.  

2. Responsibilities to buy compulsory fire and explosion insurance

a) For establishments obliged to buy compulsory fire and explosion insurance, heads of agencies or units or individuals that have those establishments shall buy compulsory fire and explosion insurance.

b) For an establishment containing many households such as dormitories or condominiums, or an establishment leased by many agencies, organizations or individuals, the responsibility to buy compulsory fire and explosion insurance is defined as follows:

- When the owner of such establishment or the person assigned by that owner to act as the establishment s manager or his/her representative (below collectively referred to as representative) is identifiable, such representative shall buy compulsory fire and explosion insurance.  Each household, agency, organization and individual shall pay insurance premiums to that representative.  In this case, the insured include households, agencies, organizations and individuals that have paid insurance premiums to the representative.

- When the representative is unidentifiable, each household, agency, organization and individual within that establishment shall personally buy compulsory fire and explosion insurance.

3. Insurance enterprises, agencies, organizations and individuals shall implement the compulsory fire and explosion insurance regime according to compulsory fire and explosion insurance rules and premiums promulgated by the Ministry of Finance.  In case of damage, competent Public Security agencies shall identify the causes of fire or explosion leading to the damage.

4. The buyers of, and assets subject to, compulsory fire and explosion insurance; the minimum compulsory fire and explosion insurance sum; compulsory fire and explosion insurance contracts, and other issues of the compulsory fire and explosion insurance regime must comply with Chapter II of Decree No. 130/2006/ND-CP and Article 2 of Decree No. 46/2012/ND-CP.

5. The insurance enterprise are not entitled to refuse to sell compulsory fire and explosion insurance to the insurance buyer that has abided by legislations on fire prevention and fighting, except for the following cases:

a) The facility of which the fire prevention and fighting design is not accepted when building, transforming or changing the use purpose;

b) The facility that does not have the inspection records on fire prevention and fighting from the Fire department or it has been over 01 year as from the date of making the inspection record until the time of purchasing the compulsory fire and explosion insurance;

c) The facility of which the operation is suspended or terminated due to serious violations of fire prevention and fighting regulations.

6. The insurers are entitled to terminate the compulsory fire and explosion insurance contract in case where the insurance buyer fails to comply with agreements in insurance contract. The termination of insurance contract shall comply with legislations.

Article 4. Contribution forms to fire prevention and fighting activities

1. Compulsory fire and explosion insurance business enterprises shall deduct and contribute to the funding in serve of fire prevention and fighting activities under guide of the Ministry of Finance.

Within 30 days from 30 of June and 31 of December every year, insurance enterprises shall transfer the amounts contributed to fire prevention and fighting activities into the Police Department for fire prevention and fighting and rescue and salvage s custody account opened at the Central State Treasury, make reports on the compulsory fire and explosion insurance business result and report on deducted amounts from fire and explosion insurance premiums as prescribed at Annexes 4, 5 promulgated together with the Circular No.  220/2010/TT-BTC dated 30/12/2010 of the Ministry of Finance guiding implementing compulsory fire and explosion insurance regime and send them to the Ministry of Finance.

2. For a package insurance contract covering also compulsory fire and explosion insurance, the insurance enterprise shall make a separate annex on compulsory fire and explosion insurance which includes all the contents specified in Article 9 of Decree No. 130/2006/ND-CP.

3. Within 90 days after the end of a fiscal year, insurance enterprises shall make reports on finalization of funds to be contributed to fire prevention and fighting activities according to Annex 6 promulgated together with the Circular No.  220/2010/TT-BTC dated 30/12/2010 of the Ministry of Finance guiding implementing compulsory fire and explosion insurance regime and send them to the Ministry of Finance.

Insurance enterprises shall compare the data on funds already contributed with those on funds to be contributed in the finalization report; if the contributed fund is larger than the fund to be contributed, the surplus shall be included in the fund to be contributed in the subsequent year; if the former is smaller than the latter, the enterprises shall pay the deficit within 05 working days.

Article 5. Management, allocation, payment and finalization of contributions to fire prevention and fighting activities

1. Annually, based on the expenses specified in Clause 2 this Article, the previous year s revenues and the plan year s revenues, the Ministry of Public Security shall make estimates of revenues and expenditures of contributions to fire prevention and fighting activities and send them to the Ministry of Finance.

2. The contributions of insurers from compulsory fire and explosion insurance business shall be used for fire prevention and fighting activities with the following contents:

a) Investment in fire prevention and fighting facilities and equipment of fire prevention and fighting police forces.  This investment must not be lower than 70% of the fund actually spent on fire prevention and fighting activities in the year; the remainder, not exceeding 30% of the actually spent fund, shall be used for activities specified at Points b and c of this Clause.

b) Supports for the propagation, guide, popularization of law knowledge and common knowledge on fire prevention and fighting for entire people. Content and expenditure level for these activities shall apply the Joint Circular No. 73/2010/TTLT-BTC-BTP dated 14/5/2010 of the Ministry of Finance and the Ministry of Justice, guiding the setting up, management, use and finalization of funding for the work of law popularization and education.

c) Supports for the commendation and reward of the following subjects for their achievements in fire prevention and fighting activities:

- Organizations and individuals directly engaged in fire prevention and fighting;

- Organizations and individuals coordinating in fire prevention and fighting.

The reward level must not exceed VND 5 million, for collective, or VND 3 million, for individual.  The Ministry of Public Security shall specify the commendation of, and reward funds for, organizations and individuals that make achievements in fire prevention and fighting.

3. The contributed funding for fire prevention and fighting activities from the compulsory fire and explosion insurance business which is not used all at the ending of year shall be forwarded to next year for further use for contents as guided in this Circular.

Article 6. Relevant agencies’ responsibilities

1. The Public Security Ministry s Police Department for Fire Prevention and Fighting and rescue and salvage shall:

a) Coordinate with the function agencies of the Ministry of Finance (Department of Insurance Management and Supervision) in propagating, popularizing law on compulsory fire and explosion insurance; urging facilities prone to fire or explosion to buy compulsory fire and explosion insurance.

b) Receive, manage, use, make payment and finalization of insurance enterprises contributions to fire prevention and fighting activities as prescribed by law.

c) In 4^thquarter every year, notify the insurers about list of facilities prone to fire or explosion subject to purchase of compulsory fire and explosion insurance nationwide through the Vietnam Insurance Association.

2. Department of Insurance Management and Supervision (the Ministry of Finance) shall:

a) Coordinate with the fire prevention and fighting police agencies in propagating, popularizing law on compulsory fire and explosion insurance; urging facilities prone to fire or explosion to buy compulsory fire and explosion insurance.

b) Inspect and supervise the insurers in implementation of compulsory fire and explosion insurance regime, timely sanction the insurers which refuse to sell compulsory fire and explosion insurance under regulations.

c) Check the accuracy of data in reports on finalization of insurance enterprises contributions to fire prevention and fighting activities and urge the insurers to pay sufficient contributions that must be contributed.

3. The provincial/municipal fire prevention and fighting police agencies shall:

a) Guide facilities subject to buy compulsory fire and explosion insurance in self-checking safety of fire prevention and fighting and implementation of conditions for safety of fire prevention and fighting as prescribed in Article 9 of the Government s Decree No. 35/2003/ND-CP and Clause 1 Article 1 of Decree No. 46/2012/ND-CP.

b) Quarterly, conduct inspection on safety of fire prevention and fighting at facilities prone to fire or explosion; conduct irregular inspection upon having sign of danger and safety loss of fire prevention and fighting or at the special requests.

c) Conduct inspection and supervisions at facilities prone to fire or explosion subject to purchase of compulsory fire and explosion insurance, timely sanction such facilities in case of failing to buy insurance under regulations.

Article 7. Implementation effect

1. This Joint Circular takes effect on 13/02/2014 and replaces the Joint Circular No. 41/2007/TTLT-BTC-BCA dated 24/4/2007 of the Ministry of Finance and the Ministry of Public Security guiding implementation of a number of Articles of the Government’s Decree No. 130/2006/ND-CP dated 08/11/2006, providing for the compulsory fire and explosion insurance regime.

2. Any arising problems in the course of implementation should be reported to the Ministry of Finance, the Ministry of Public Security for timely guide.

For the Ministry of Public Security

Deputy Minister

Lieutenant Pham Quy Ngo

For the Minister of Finance

Deputy Minister

Tran Xuan Ha