Circular No. 103/2009/TT-BTC on the management, use, payment, and settlement of the Motor Vehicle Insurance Fund

CIRCULAR

Regulations on the management, use, payment, and settlement of the Motor Vehicle Insurance Fund

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

Based on Decree No. 103/2008/NĐ-CP dated September 16, 2008, of the Government on mandatory civil liability insurance for motor vehicle owners;

The Ministry of Finance guides the management, use, payment, and settlement of the Motor Vehicle Insurance Fund as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Application

This Circular stipulates the management, use, payment, and settlement of the Motor Vehicle Insurance Fund (referred to as the Fund) according to Article 4 of Decree No. 103/2008/NĐ-CP dated September 16, 2008, of the Government on mandatory civil liability insurance for motor vehicle owners (referred to as Decree No. 103/2008/NĐ-CP).

Article 2. Principles of Fund Management

1. The Fund shall be centrally managed at the Vietnam Insurance Association, with a separate account at a commercial bank and shall use the seal of the Vietnam Insurance Association.

2. The Vietnam Insurance Association shall manage and use the Fund efficiently, economically, and in accordance with its intended purpose as prescribed in this Circular and relevant laws.

3. The Ministry of Finance (Department of Management and Supervision of Insurance) shall supervise the management, use, payment, and settlement of the Fund.

Chapter II

SPECIFIC PROVISIONS

Article 3. Sources of Fund Formation

1. Contributions from insurance companies authorized to implement mandatory civil liability insurance for motor vehicle owners.

2. Income from interest on deposits.

3. The surplus of the Fund from the previous year carried over to the next year for use.

4. Other lawful income (if any).

Article 4. Contribution Rate to the Fund

1. Insurance companies are responsible for deducting a minimum of 2% of their annual revenue from mandatory civil liability insurance premiums for motor vehicle owners to contribute to the Fund. Contributions to the Fund shall be made starting from the 2009 fiscal year.

2. Insurance companies are responsible for reporting their full annual revenue from mandatory civil liability insurance premiums for motor vehicle owners to the Ministry of Finance and the Vietnam Insurance Association before March 31 each year.

3. The specific annual contribution rate shall be announced by the Ministry of Finance (Department of Management and Supervision of Insurance).

Article 5. Periods for Contributing to the Fund

1. Quarter I: Before April 15 each year, 50% of the estimated annual contribution and the remaining amount due from the previous year (if any).

2. Quarter II: Before September 30 each year, the remaining estimated annual contribution.

Article 6. Contents and Levels of Expenditure from the Fund

1. Expenditure to prevent and limit traffic accidents and losses: The expenditure level shall not exceed 35% of the total amount contributed to the Fund annually.

2. Expenditure on publicizing and educating about road safety and mandatory civil liability insurance for motor vehicle owners: The expenditure level shall not exceed 10% of the total amount contributed to the Fund annually.

3. Humanitarian assistance expenditure: The expenditure level shall not exceed 15% of the total amount contributed to the Fund annually, specifically:

Assistance for funeral expenses for third-party casualties and passengers carried on the vehicle caused by motor vehicles when the accident-causing vehicle cannot be identified, the vehicle has not participated in insurance, or is excluded under Article 13 of Decree No. 103/2008/NĐ-CP. The assistance for funeral expenses is VND 5 million per person per incident.

4. Expenditure on rewarding achievements for police forces in controlling, detecting, and handling administrative violations by motor vehicle owners in implementing mandatory civil liability insurance: The expenditure level shall not exceed 20% of the total amount contributed to the Fund annually.

5. Expenditure on building a database on mandatory civil liability insurance for motor vehicle owners: The expenditure level shall not be less than 10% of the total amount contributed to the Fund annually. This will have a separate project, which the Ministry of Finance (Department of Management and Supervision of Insurance) will coordinate with the Vietnam Insurance Association, non-life insurance companies, and related agencies to develop and implement the project.

6. Expenditure for the activities of the National Agency of Vietnam implementing the ASEAN Motor Vehicle Mandatory Insurance Program (referred to as the National Agency for Motor Vehicle Insurance), such as salaries, allowances, management costs (purchase, repair of assets, service costs, etc.), and other expenditures. The expenditure level shall not exceed 5% of the total amount contributed to the Fund annually.

7. Fund management expenditure and other expenditures: The expenditure level shall not exceed 3% of the total amount contributed to the Fund annually.

The Fund Management Board shall cooperate with non-life insurance companies to develop plans and budget estimates for the above expenditure items and submit them to the Fund Management Council for approval before implementation. Implementation must comply strictly with the provisions of this Circular and other relevant laws.

In cases where it is necessary to adjust the expenditure levels to suit actual conditions, the Fund Management Council shall propose the Ministry of Finance (Department of Management and Supervision of Insurance) to provide written comments before implementation.

Article 7. Organization, management, and operation of the Fund

1. The management and operational structure of the Fund includes:

a) The Management Council of the Fund;

b) The Fund Management Board;

c) The Supervisory Board of the Fund.

2. The tasks, powers, and organizational structure of the Management Board of the Fund, the Executive Board of the Fund, and the Supervisory Board of the Fund are regulated in Articles 8, 9, and 10 of this Circular.

Article 8. Management Board of the Fund

1. Tasks and powers of the Management Board of the Fund:

a) Bear responsibility under the law and before the Minister of Finance for managing and operating the Fund;

b) Issue the Rules of Operation of the Management Board of the Fund, the Executive Board of the Fund, and the Supervisory Board of the Fund upon approval by the Ministry of Finance;

c) Issue specific regulations on the management and use of the Fund; approve the budget and final accounts of the Fund; decide on regular or spot inspections and audits of the management and use of the Fund;

d) Issue Decisions to establish the Executive Board of the Fund and the Supervisory Board of the Fund;

đ) Report to the Ministry of Finance the approved budget and final accounts of the Fund.

2. The Management Board of the Fund consists of:

a) Chairman of the Management Board of the Fund: Chairman of the Vietnam Insurance Association;

b) Members:

- Representative of the Department of Insurance Supervision - Ministry of Finance;

- Representative of the Highway Police Corps - Railway Police - Ministry of Public Security;

- Secretary General of the Vietnam Insurance Association;

- Representatives from at least three non-life insurance enterprises authorized to implement compulsory civil liability insurance for motor vehicles with the largest market share in compulsory civil liability insurance for motor vehicle owners.

The Ministry of Finance issues a decision to establish the Management Board of the Fund.

Article 9. Executive Board of the Fund

1. Tasks and powers of the Executive Board of the Fund:

a) Bear responsibility under the law and before the Management Board of the Fund for managing, using, settling, and finalizing the accounts of the Fund;

b) Adhere to regulations on the management and use of the Fund according to the plan approved by the Management Board of the Fund, in accordance with this Circular, and not use the Fund for activities other than its purposes.

2. The Executive Board of the Fund consists of:

a) Head of the Executive Board of the Fund: Secretary General of the Vietnam Insurance Association;

b) Members: Representatives from at least three non-life insurance enterprises authorized to implement compulsory civil liability insurance for motor vehicles with the largest market share in compulsory civil liability insurance for motor vehicle owners.

Article 10. Supervisory Board of the Fund

1. Tasks and powers of the Supervisory Board of the Fund:

a) Monitor the operations of the Fund to ensure compliance with the law and this Circular;

b) Compile evaluations and make recommendations to the Management Board of the Fund regarding the financial situation of the Fund quarterly, semi-annually, and annually;

c) Conduct inspections of the management and use of the Fund upon request of the Management Board of the Fund.

2. The Supervisory Board of the Fund consists of:

a) At least three members representing three non-life insurance enterprises authorized to implement compulsory civil liability insurance for motor vehicles;

b) The Head of the Supervisory Board of the Fund shall be appointed by the Chairman of the Management Board of the Fund from among the members of the Supervisory Board.

Article 11. Budgeting, Accounting, and Finalization of Accounts of the Fund

1. Preparation of the Fund's revenue and expenditure budget:

a) Before December 15 each year, the Executive Board of the Fund prepares the revenue and expenditure budget of the Fund including the following contents:

- Revenue and expenditure situation of the Fund in the current year;

- Plan for revenue and expenditure of the Fund in the next year;

b) The Executive Board of the Fund reports the revenue and expenditure budget of the Fund to the Management Board of the Fund for approval. The revenue and expenditure budget of the Fund must be sent to the Ministry of Finance (Department of Insurance Supervision) and non-life insurance enterprises immediately after approval.

2. Accounting of the Fund:

The Executive Board of the Fund must organize accounting and statistical work in accordance with the Law on Accounting, the Law on Statistics, and guiding documents.

a) Adhere to regulations on accounting vouchers; record all revenues and expenditures of the Fund;

b) Maintain accounting books to record, systematize, and store all transactions related to the Fund;

c) Quarterly and semi-annually, have the responsibility to prepare reports on the revenue and expenditure of the Fund for approval by the Management Board of the Fund and send to the Ministry of Finance.

Quarterly and semi-annual reports: no later than 20 days from the end of the quarter or six months.

3. Finalization of the Fund's Accounts:

a) Annually, the Executive Board of the Fund has the responsibility to prepare the final report on the revenue and expenditure of the Fund for approval by the Management Board of the Fund;

The annual report must be prepared before February 10 of the following year.

b) The annual final report of the Fund must be certified by an independent auditor;

c) The annual final report of the Fund must be sent to the Ministry of Finance (Department of Insurance Supervision) and non-life insurance enterprises before March 31 of the following year.

Article 12. Responsibilities of Insurance Enterprises

1. Appoint representatives to participate in the Management Board of the Fund, the Executive Board of the Fund, the Supervisory Board of the Fund, and cooperate with the Vietnam Insurance Association to manage and utilize the Fund effectively, economically, and in accordance with its intended purpose as stipulated in this Circular and relevant laws.

2. Report fully on compulsory civil liability motor vehicle insurance premiums to the Ministry of Finance, the Vietnam Insurance Association, and contribute to the Fund in accordance with the provisions of this Circular.

3. Prepare and submit to the Ministry of Finance statistical reports and business reports quarterly and annually as specified in Appendices 7 and 8 issued together with Circular No. 126/2008/TT-BTC dated December 22, 2008 of the Ministry of Finance.

a) Quarterly report: At the latest within 30 days from the end of the quarter (including both hard copy and electronic versions);

b) Annual report: At the latest within 90 days from the end of the year (including both hard copy and electronic versions).

Article 13. Responsibilities of the Insurance Management and Supervision Department

1. Guide, direct, inspect, and supervise the Vietnam Insurance Association in managing, utilizing, settling, and finalizing the Fund.

2. Announce the annual contribution levels of non-life insurance enterprises permitted to offer compulsory civil liability motor vehicle insurance.

Chapter III

IMPLEMENTING PROVISIONS

Article 14. Implementation clause

1. This Circular takes effect 45 days from the date of signature.

2. The Motor Vehicle Insurance Fund prescribed in this Circular replaces the Road Traffic Safety Publicity and Assurance Fund stipulated in Article 2 of Decision No. 23/2007/QD-BTC dated April 9, 2007 of the Minister of Finance on the issuance of regulations for compulsory civil liability motor vehicle insurance.

Any difficulties encountered during implementation should be promptly reported to the Ministry of Finance (Insurance Management and Supervision Department) for research and resolution./.