Circular No. 105-TC/ĐT guiding insurance for construction projects

CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 105-TC/ĐT ON DECEMBER 8, 1994

GUIDELINES FOR INSURING CONSTRUCTION PROJECTS

BASED ON THE REGULATIONS ON "INVESTMENT MANAGEMENT AND CONSTRUCTION" ISSUED TOGETHER WITH DECREE NO. 177/CP OF OCTOBER 20, 1994 BY THE GOVERNMENT;

Pursuant to Decree No. 100/CP dated December 18, 1993 of the Government on insurance business and guiding circulars issued by the Ministry of Finance;

The Ministry of Finance hereby provides guidelines for implementing construction project insurance as follows:

 This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. The investors of state-owned investment projects must purchase construction project insurance.

Direct investment projects funded by foreign capital shall be implemented according to the provisions of the Law on Foreign Investment in Vietnam.

2. Investors must purchase insurance for the project at an insurance company permitted to operate in Vietnam. Insurance premiums are part of the project's investment capital calculated as a percentage of the project's value.

3. Organizations undertaking construction contracts, consulting organizations must purchase insurance for materials, equipment, workshops serving construction, personal accident insurance, third-party liability insurance, and insurance for survey and design products during the implementation of the project. Insurance premiums are included in production costs.

4. Construction project insurance must be reflected in the tender documents or total budget estimate of the project.

II. SPECIFIC PROVISIONS

1. Insured parties (insurance participants):

- Investors of state-owned projects.

- Organizations related to state-owned investment and construction projects such as: Consulting organizations for surveys and designs, suppliers of materials and equipment, and construction organizations...

2. Types of insurance:

2. 1. For investors of state-owned projects:

When investing and constructing, investors must purchase the following types of insurance:

+ Insurance for materials and construction equipment under the management responsibility of the investor during transportation from the place of purchase to the site of the project (for materials and equipment purchased at CIF prices, only from the point of receipt within the country) and while being stored in warehouses. Insurance premiums are included in the price of materials and equipment.

+ Construction project insurance during the installation process to cope with unexpected losses such as fire, floods, earthquakes, etc. Insurance premiums are part of the estimated cost of the construction project and are calculated as a percentage of the project estimate and settled in the other expenses category.

2. 2. For organizations related to state-owned investment and construction projects:

It is necessary to purchase the following types of insurance:

+ Insurance for assets under management responsibility such as construction machinery and equipment.

+ Liability insurance including liability for bodily injury (death or injury) and property damage of third parties during construction, personal accident insurance (liability insurance for employees of the organization during the insurance period), and professional liability insurance for consulting organizations. Insurance premiums are included in production and business costs in the product cost or organizational costs.

3. Methods of purchasing insurance, paying insurance premiums, and compensation:

3. 1. The place to purchase insurance is insurance companies legally permitted to operate in Vietnam.

3. 2. Procedures for purchasing insurance: In the absence of any agreement between the policyholder and the insured party, the procedures for purchasing insurance will be applied as follows:

a) For investors: Investors directly or authorize construction organizations to purchase insurance.

The policyholder must submit the following complete documents:

- Purchase contracts for materials and equipment.

- Site plan of the project.

- Summary document on the structure and construction methods of the project.

- Documents related to the climate, weather, geology, and hydrology of the project.

- Extract of the insurance clause in the construction contract.

- Approved total project budget estimate, or winning bid price.

- Other necessary documents as required by the insurance rules.

Based on the above documents, the insurance company will review, evaluate, determine the insurance premium, and issue an insurance certificate attached to the insurance application for the investor.

b) Other organizations related to construction contracts: The policyholder must submit the following documents:

- List of quantities and values of construction machinery and equipment on-site.

- List of workers participating in insurance.

- List of investment projects completed in the last five years.

- Estimated value of surrounding assets that may be damaged during construction.

The insurance company will review, evaluate, set the insurance premium, and issue an insurance certificate attached to the insurance application.

3. 3. Payment of insurance premiums:

- For goods, material, and equipment insurance: Insurance premiums must be fully and timely paid according to the terms of the insurance contract.

- For construction project insurance: Insurance premiums can be paid once or multiple times according to the approved plan for the year. For other types of insurance, premiums are paid once.

3. 4. Compensation:

- When an incident occurs within the scope of insurance responsibility, the insured party must immediately notify the insurance company and provide detailed written notification to the insurance company within seven days.

- The insurance company must dispatch staff or invite specialists (if necessary) to assess the cause and extent of the loss.

- The insurance company must compensate according to the conditions and terms of the insurance contract.

III. IMPLEMENTATION PROVISIONS.

- For investment projects funded by state budget and state credit funds, priority should be given to purchasing insurance from state-owned insurance enterprises in Vietnam.

- Insurance companies wishing to conduct the types of insurance specified in this Circular must submit their insurance rules and premiums for approval by the Ministry of Finance.

This Circular takes effect from the date of issuance. During implementation, if there are difficulties, please report to the Ministry of Finance for research and resolution.