Circular No. 121/2011/TT-BTC guiding certain provisions of Decision No. 315/QĐ-TTg dated March 1, 2011 of the Prime Minister on piloting agricultural insurance for the period 2011-2013.

CIRCULAR

Guidelines for certain provisions of Decision No. 315/QD-TTg dated March 1, 2011 of the Prime Minister

on piloting agricultural insurance during the period 2011-2013

_____________________________

 

Pursuant to the Insurance Business Law 2000, the Law Amending and Supplementing Certain Provisions of the Insurance Business Law, and guiding documents for implementation;

The Minister of Finance hereby promulgates this Circular amending and supplementing some articles of Circular No. 124/2012/TT-BTC dated July 30, 2012 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 45/2007/NĐ-CP dated March 27, 2007 of the Government detailing the implementation of certain provisions of the Insurance Business Law and Decree No. 123/2011/NĐ-CP dated December 28, 2011 of the Government detailing the implementation of certain provisions of the Law amending and supplementing some articles of the Insurance Business Law (hereinafter referred to as "Circular No. 124/2012/TT-BTC") and Circular No. 125/2012/TT-BTC dated July 30, 2012 of the Ministry of Finance guiding the financial regime for insurance companies, reinsurance companies, insurance brokerage companies and branches of foreign non-life insurance companies (hereinafter referred to as "Circular No. 125/2012/TT-BTC").

Pursuant to Decree No. 46/2007/NĐ-CP dated March 27, 2007 of the Government stipulating financial regimes for insurance enterprises;

Pursuant to the 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;

Pursuant to Decision No. 315/QD-TTg dated March 1, 2011 of the Prime Minister on piloting agricultural insurance during the period 2011-2013;

The Ministry of Finance issues guidelines for implementing certain provisions of Decision No. 315/QD-TTg dated March 1, 2011 of the Prime Minister on piloting agricultural insurance during the period 2011-2013 as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular provides guidelines for certain provisions of Decision No. 315/QD-TTg dated March 1, 2011 of the Prime Minister on piloting agricultural insurance during the period 2011-2013 (hereinafter referred to as Decision 315) regarding the following contents:

1. Registration and decision on insurance enterprises to pilot agricultural insurance;

2. Approval of insurance rules, terms, premium rates, commission rates, and liability limits;

3. Financial mechanisms and support policies for insurance enterprises implementing the pilot of agricultural insurance and the implementation of such support;

4. Documents, procedures, and processes for supporting the implementation of the pilot of agricultural insurance;

5. Allocation of funds for support under the responsibility of the central budget and guidance to provincial People's Committees and municipal People's Committees directly under the Central Government to implement the support policy for the pilot of agricultural insurance;

6. Implementation, inspection, supervision, summary, evaluation, and other related contents in the implementation of the pilot of agricultural insurance.

Article 2. Applicability

Insurance enterprises that meet the conditions specified in Clause 8, Article 1 of Decision 315 (hereinafter referred to as insurance enterprises), reinsurance enterprises, insurance agents, and other organizations and individuals related to the implementation of the pilot of agricultural insurance according to Decision 315 shall comply with the provisions of this Circular and relevant laws.

Chapter II

SPECIFIC PROVISIONS

Section 1

Documents and procedures for registration and decision on insurance enterprises to pilot agricultural insurance

Article 3. Conditions for piloting

Insurance enterprises that fully meet the conditions stipulated in Clause 8, Article 1 of Decision 315 may pilot agricultural insurance. Specifically:

1. Having been granted a license for establishment and operation of non-life insurance business. Among them, the Chairman of the Board of Directors (Board Members) or General Director (Director) or Deputy General Director (Deputy Director) has experience in implementing agricultural insurance;

2. Meeting the solvency margin as prescribed by the Law on Insurance Business;

3. Having a system of branches, trading offices, headquarters, affiliated companies (referred to as branches), representative offices in the area where the pilot of agricultural insurance will be implemented;

4. Having a plan to arrange a team of staff to handle agricultural insurance.

Article 4. Documents and procedures for registration to pilot agricultural insurance

The documents for registration to pilot agricultural insurance submitted directly or through postal service to the Ministry of Finance include:

1. A request letter to pilot agricultural insurance according to the form prescribed in Appendix 1 issued together with this Circular.

2. Documentation proving compliance with the conditions stipulated in this Circular.

3. A business plan for three years of piloting agricultural insurance, including:

a) Proposed insurance products, along with their rules, terms, premium rates, exploitation, appraisal, compensation procedures; internal control procedures; risk management procedures, reinsurance program management procedures; formulas, methods, and explanations of the basis for calculating premiums, reserve expenses for proposed insurance products; specific liability limits and compensation amounts for insurance products;

b) Related documents including: insurance application forms, product introduction materials, service materials of the insurance enterprise, sales illustration materials, insurance contract declaration and signature forms when purchasing insurance. These documents are part of the insurance contract;

c) The proposed pilot area, including a detailed explanation of the planned exploitation network: branch system, trading offices, headquarters, affiliated companies (referred to as branches), representative offices, business locations, distribution channels, personnel meeting the requirements for implementing insurance down to the commune level in the registered pilot area for agricultural insurance;

d) Projected revenue and costs of proposed insurance products for insured objects.

4. Reinsurance program in accordance with current laws.

Article 5. Decision on Insurance Enterprises Implementing Agricultural Insurance Pilot Programs

Within thirty days from the date of receiving complete and valid documents as stipulated in Article 4 of this Circular from insurance enterprises, the Ministry of Finance shall issue a document approving or rejecting the enterprise's proposal. In case of approval, the Ministry of Finance shall issue a Decision approving the insurance enterprise to implement the pilot program according to the model specified in Appendix 2 attached to this Circular, while simultaneously notifying the Ministry of Agriculture and Rural Development, People's Committees of provinces and centrally-run cities where the agricultural insurance pilot program is expected to be implemented about the insurance enterprise and the products expected to be piloted in that area. In case of rejection, the Ministry of Finance shall issue a document specifying the reasons.

Article 6. Publicizing Information on Agricultural Insurance Pilot Program Activities

1. Within seven days from the date of receiving the approval document from the Ministry of Finance, the insurance enterprise must publish information in five consecutive issues of central newspapers and local newspapers in the areas where the agricultural insurance pilot program will be implemented regarding the contents prescribed in Clause 2 of this Article.

2. The contents for publicizing information include:

a) Name, main office address, branch office addresses, trading offices, headquarters, affiliated companies (referred to as branches), representative offices in the areas where the pilot program is expected to be implemented;

b) Areas implementing the agricultural insurance pilot program, insured objects, and proposed insurance products;

c) Full name of the legal representative of the enterprise;

d) Product distribution system of the insurance enterprise.

Article 7. Changes Requiring Written Approval from the Ministry of Finance

1. When changing the registered area for implementing the agricultural insurance pilot program, the insurance enterprise must obtain written approval from the Ministry of Finance.

a) Documents requesting changes submitted directly or via postal service to the Ministry of Finance include:

- A document requesting a change in the registered area for implementing the agricultural insurance pilot program;

- An approval document from the competent authority as stipulated in the Enterprise Charter regarding the change in the registered area for implementing the agricultural insurance pilot program;

- A detailed explanation document regarding the planned network deployment: branch system, trading offices, headquarters, affiliated companies (referred to as branches), representative offices, business locations, distribution channels, personnel meeting the requirements for implementing the agricultural insurance pilot program down to the commune level in the registered area for implementing the agricultural insurance pilot program.

b) Within thirty days from the date of receiving complete and valid documents as stipulated in Point a, Clause 1 of Article 7 of this Circular from the insurance enterprise, the Ministry of Finance shall issue a document approving or rejecting the enterprise's request. In case of rejection, the Ministry of Finance shall issue a document specifying the reasons.

2. When changing agricultural insurance products (including insured objects), the insurance enterprise must obtain written approval from the Ministry of Finance.

a) Documents requesting changes in agricultural insurance products submitted directly or via postal service to the Ministry of Finance include documents as prescribed in Clause 2 of Article 8 of this Circular.

b) The time limit for reviewing documents requesting changes in agricultural insurance products shall be carried out according to the provisions of Clauses 3, 4, and 5 of Article 8 of this Circular.

Section 2

Exploitation of Insurance and Reinsurance

Article 8. Approval of insurance rules, terms, and premium schedules

1. Insurance rules, terms, and premium schedules established by insurance enterprises must ensure:

a) Compliance with laws;

b) The language used in insurance rules and terms must be accurate, with simple and clear expressions. For specialized terms, their contents must be clearly defined and explicitly defined within the insurance rules and terms;

c) Clearly and transparently demonstrate insurable benefits, insured objects, scope, and risks covered, rights and obligations of the policyholder and insured party, responsibilities of the insurance enterprise, exclusion clauses, methods of insurance payment, and dispute resolution provisions;

d) Premiums must be based on statistical data, ensuring the insurance enterprise's ability to pay, and must correspond to the conditions and responsibilities of the insurance;

đ) Clearly define the unit of insurance for each insured object (rice implemented according to the county unit; livestock and aquaculture implemented according to the commune, farmer household, individual, or agricultural production organization meeting the scale criteria as guided by the Ministry of Agriculture and Rural Development); deductible amount; method of issuing insurance policies; method of determining loss value and insurance compensation for each type of insurance according to index and traditional insurance;

e) Have confirmation from a premium calculation specialist.

2. Documents for requesting approval of insurance products:

Before implementing an insurance product, the insurance enterprise must obtain approval from the Ministry of Finance for the insurance product. The documents for requesting approval of an insurance product include:

a) A document requesting approval of the insurance product, in which the insurance enterprise commits to being responsible for the content and legality of the insurance rules and terms;

b) Insurance rules, terms, and premium schedules of the proposed insurance product;

c) Formulas, methods, and explanations of technical bases used for calculating premiums and setting aside reserves for the proposed insurance product;

d) Related documents including: insurance claim request forms, product and service introduction materials of the insurance enterprise, sales illustration materials, and various application forms that customers fill out and sign when purchasing insurance. These documents are part of the insurance contract. An insurance agency contract (which clearly stipulates the responsibilities of the insurance agent in collecting insurance premiums, assessing losses, and arranging insurance compensation settlements).

3. Within ten days from the date of receiving complete valid documents as stipulated in Clause 2 of this Article, the Ministry of Finance shall send a letter seeking opinions from the Ministry of Agriculture and Rural Development and People's Committees of provinces and centrally-administered cities related to approving the insurance product.

4. Within fifteen days from the date of receiving complete documents for seeking opinions, the Ministry of Agriculture and Rural Development and People's Committees of provinces and centrally-administered cities related to approving the insurance product shall provide written opinions on approval or disapproval. In case of disapproval, the reasons must be clearly explained.

5. Within ten days from the date of receiving full opinions from the Ministry of Agriculture and Rural Development and People's Committees of provinces and centrally-administered cities related to approving the insurance product, the Ministry of Finance shall issue a document approving or rejecting approval. In case of rejection, the Ministry of Finance shall issue a document explaining the reasons.

Article 9. Insurance Distribution System and Insurance Agent Training

1. The insurance distribution system of an insurance business includes:

a) Direct sale of insurance;

b) Sale of insurance through insurance agents;

c) Sale of insurance through insurance brokers.

2. Agricultural insurance agents must be trained for at least eight hours. The organization of training, examination, and issuance of agent training certificates shall be carried out in accordance with current laws.

3. Contents of insurance agency activities:

An insurance agent may be authorized by an insurance business to carry out the following activities:

a) Introducing and offering insurance;

b) Arranging the conclusion of insurance contracts;

c) Collecting insurance premiums;

d) Arranging the settlement of compensation and payment of insurance proceeds when an insured event occurs;

e) Performing other related activities to implement insurance contracts.

Article 10. Insurance Commission

1. An insurance business may only pay insurance commissions to the following entities:

a) Insurance brokerage businesses;

b) Insurance agents.

2. The rate of insurance commission shall be implemented in accordance with current laws.

Article 11. Conclusion of Insurance Contracts

1. An insurance business shall conclude an insurance contract with the insured party when the following conditions are met:

a) A document from the People's Committee of the province registering participation in insurance according to the model prescribed in Appendix 11 issued together with this Circular;

b) Confirmation from the People's Committee of the commune regarding the insured parties (poor and near-poor farming households; non-poor and non-near-poor farming households; agricultural production organizations) and the insured objects (rice crops, livestock, aquatic products) within the commune area according to the models prescribed in Appendices 12, 19, and 26 issued together with this Circular.

2. Time of occurrence of insurance liability:

a) In cases where the insured party receives partial premium support from the State:

Insurance liability arises if one of the following situations occurs:

- The insurance contract has been concluded and the insured party has paid the full portion of the premium not supported by the State as stipulated in the insurance contract, and there is confirmation from the competent authority regarding the insured party being eligible for State premium support (near-poor farming households; non-poor and non-near-poor farming households; agricultural production organizations) as provided in Clause 2, Article 1 of Decision 315.

- The insurance contract has been concluded, with a written agreement between the insurance business and the insured party regarding the insured party's debt on the premium, and there is confirmation from the competent authority regarding the insured party being eligible for State premium support (near-poor farming households; non-poor and non-near-poor farming households; agricultural production organizations) as provided in Clause 2, Article 1 of Decision 315.

- There is evidence that the insurance contract has been concluded and the insured party has paid the full portion of the premium not supported by the State as stipulated in the insurance contract, and there is confirmation from the competent authority regarding the insured party being eligible for State premium support (near-poor farming households; non-poor and non-near-poor farming households; agricultural production organizations) as provided in Clause 2, Article 1 of Decision 315.

b) In cases where the insured party receives 100% premium support from the State:

Insurance liability arises when the insurance contract has been concluded and there is confirmation from the competent authority regarding the insured party being eligible for 100% State premium support as provided in Point a, Clause 2, Article 1 of Decision 315.

3. An insurance business shall be entitled to have the competent authority settle the portion of the premium supported by the State for the insured party upon meeting the following conditions:

a) A document from the People's Committee of the province registering participation in insurance according to the model prescribed in Appendix 11 issued together with this Circular;

b) Confirmation from the People's Committee of the commune regarding the insured parties (poor and near-poor farming households; non-poor and non-near-poor farming households; agricultural production organizations) and the insured objects (rice crops, livestock, aquatic products) within the commune area according to the models prescribed in Appendix 12 (rice crops), Appendix 19 (livestock), and Appendix 26 (aquatic products) issued together with this Circular.

c) The insurance contract is concluded based on rules, terms, and premium rates for agricultural insurance approved by the Ministry of Finance.

d) The insured party has paid the full portion of the premium not supported by the State as stipulated in the insurance contract (in cases where the insured party does not receive 100% premium support from the State).

The procedures and formalities for settlement shall be carried out in accordance with Point b, Clause 1, Article 20 of this Circular.

Article 12. Reinsurance Activities

1. The reinsurance program of insurance enterprises shall be implemented in accordance with the current laws.

2. The Vietnam National Reinsurance Joint Stock Corporation shall be responsible for accepting reinsurance and ceding reinsurance to domestic insurance enterprises. In cases where domestic insurance enterprises do not accept all the insured liabilities, the Vietnam National Reinsurance Joint Stock Corporation shall cede reinsurance to foreign reinsurers on the principle of ensuring national interests.

3. In cases where foreign reinsurers do not accept all the liabilities, the Vietnam National Reinsurance Joint Stock Corporation shall be responsible for compiling, statistics, proposing solutions, and reporting to the Ministry of Finance for consideration and resolution.

Section 3

Financial regime for insurance and reinsurance enterprises implementing pilot agricultural insurance

Article 13. Principles of Pilot Implementation

Insurance enterprises and the Vietnam National Reinsurance Joint Stock Corporation shall implement pilot agricultural insurance according to the principle of not pursuing profit objectives.

Article 14. Revenue and Expense Accounting

1. Expenses

a) For sales expenses, management expenses, insurance commission expenses; support expenses, remuneration expenses for local authorities at various levels to implement agricultural insurance, insurance enterprises are permitted to use up to 35% of the agricultural insurance premium revenue (including both premiums supported by the State and premiums paid by the policyholder).

b) For reserve expenses: Insurance enterprises are responsible for establishing premium reserves, indemnity reserves, and large fluctuation indemnity reserves in accordance with the current laws.

Large fluctuation indemnity reserves must be established at a minimum of 10% of the retained agricultural insurance premiums. The portion of retained premiums in the following year, after deducting the specified expenses, may be used to supplement the large fluctuation indemnity reserves.

The use of large fluctuation indemnity reserves shall be carried out in accordance with the current laws and guidelines issued by the Ministry of Finance upon completion of the pilot implementation phase.

2. Revenue and Expense Accounting of Insurance Enterprises

Insurance enterprises are responsible for separately accounting for revenues and expenses from the pilot agricultural insurance activities from other activities and agricultural insurance activities (if any) currently being implemented.

By December 31, 2013, based on the results of the pilot implementation of agricultural insurance, if insurance enterprises and the Vietnam National Reinsurance Joint Stock Corporation incur losses exceeding 10% of their capital from the pilot agricultural insurance business, the Ministry of Finance shall have mechanisms to guide within its authority or report to the Prime Minister for consideration and support.

3. Other provisions regarding revenues and expenses of insurance enterprises shall be implemented in accordance with the current laws.

Article 15. Reporting System

1. Insurance enterprises shall prepare and submit to the Ministry of Finance quarterly and annual business reports along with electronic versions according to the forms prescribed in Appendices 3, 4, 5, 6, 7, and 8 attached to this Circular.

2. Insurance enterprises shall prepare and submit to the People's Committees of provinces and cities reports related to the results of the pilot agricultural insurance activities in the pilot areas quarterly and annually along with electronic versions according to the forms prescribed in Appendices 3, 4, 5, and 6 attached to this Circular.

3. The Vietnam National Reinsurance Joint Stock Corporation shall be responsible for preparing and submitting the following reports:

a) Quarterly and annual reinsurance revenue reports according to the form prescribed in Appendix 9 attached to this Circular;

b) Quarterly and annual reinsurance indemnity reports according to the form prescribed in Appendix 10 attached to this Circular.

4. Deadline for submitting reports:

a) Quarterly Report: Insurance enterprises and the Vietnam National Reinsurance Joint Stock Corporation shall prepare and submit to the Ministry of Finance no later than 30 days after the end of each quarter.

b) Annual Report: Insurance enterprises and the Vietnam National Reinsurance Joint Stock Corporation shall prepare and submit to the Ministry of Finance no later than 90 days after the end of the fiscal year.

5. In addition to the business reports stipulated in Clause 1 and Clause 2 of this Article, the Ministry of Finance may request insurance enterprises and the Vietnam National Reinsurance Joint Stock Corporation to provide additional reports on the operational situation and financial status of the enterprises to serve statistical work and evaluation of the pilot agricultural insurance implementation.

6. Insurance enterprises and the Vietnam National Reinsurance Joint Stock Corporation shall be responsible for the accuracy and honesty of their reports.

Section 4

Support and Expenditure for Implementing Pilot Agricultural Insurance

Article 16. The level of State support, beneficiaries, funding sources, and support mechanisms

1. The level of State support and beneficiaries according to Decision 315, specifically as follows:

a) Support 100% of insurance premiums for farming households and individuals living in poverty who participate in the pilot agricultural insurance program.

b) Support 80% of insurance premiums for farming households and individuals living near the poverty line who participate in the pilot agricultural insurance program.

c) Support 60% of insurance premiums for farming households and individuals not classified as poor or near-poor who participate in the pilot agricultural insurance program.

d) Support 20% of insurance premiums for organizations engaged in agricultural production participating in the pilot agricultural insurance program.

2. Farming households classified as poor or near-poor are those defined in Decision No. 09/2011/QĐ-TTg dated January 30, 2011, issued by the Prime Minister on the issuance of poverty standards applicable from 2011 to 2015. The State encourages localities to use local budgets to support farming households that are not classified as poor or near-poor under Decision No. 09/2011/QĐ-TTg dated January 30, 2011, but are considered poor according to local poverty standards (if any).

3. Funding for beneficiaries: Ensured from central and local government budgets and allocated within the state budget for economic affairs, specifically as follows:

a) The central government budget supports 100% for provinces receiving supplementary balance from the central government budget.

b) The central government budget supports 50% for provinces and cities with a redistribution rate to the central government budget below 50%, while the local government budget covers the remaining 50%.

c) Local governments ensure their own funding for areas not covered by points a and b of this Article.

Article 17. Expenditure for implementing the pilot agricultural insurance program

Expenditure for implementing the pilot agricultural insurance program includes expenses for activities outside the premium support mentioned in Clause 1, Article 16 of this Circular, including:

1. Activities related to "Research, approval of rules, terms, and premium schedules for agricultural insurance", including the following expenditures:

a) Consulting fees:

- Research and development of agricultural insurance rules and terms;

- Research and development of agricultural insurance premium schedules;

- Design of agricultural insurance products: request forms, insurance contracts;

- Development of risk management, exploitation, and claim assessment procedures;

- Review and provide feedback on reinsurance programs;

- Development of regulations and reserve ratios;

- Establishment of product distribution systems;

- Development of financial mechanisms for insurance companies.

b) Expenditures for building databases to serve premium calculation purposes;

c) Expenditures for organizing conferences and seminars to serve the development of rules, terms, and premium schedules for agricultural insurance;

d) Other direct expenditures serving the development and issuance of rules, terms, and premium schedules for agricultural insurance.

2. Activities related to "Organizing the implementation of the pilot agricultural insurance program", including the following expenditures:

a) Training, seminar, and workshop organization costs;

b) Publicity costs.

3. Activities related to "Monitoring and supervising the implementation of the pilot agricultural insurance program", including the following expenditures:

a) Travel and other work-related expenses;

b) Other expenses related to monitoring and supervising the implementation of the pilot agricultural insurance program.

4. Activities related to "Summarizing and evaluating the results of the pilot agricultural insurance program", including the following expenditures:

a) Costs for organizing conferences, seminars, interim summaries, and final evaluations;

b) Building databases to serve summarization and evaluation of the results of the pilot agricultural insurance program;

c) Travel expenses;

d) Other direct expenditures serving the summarization and evaluation of the results of the pilot agricultural insurance program.

5. Funding for implementing the pilot agricultural insurance program is ensured from the central government budget and included in the administrative management budget allocated to the Insurance Management and Supervision Department (Ministry of Finance) and other legitimate sources of funding (if any).

Article 18. Implementation Period

1. Support funds and operational costs for implementing the pilot agricultural insurance program shall be allocated within the budget estimate from July 1, 2011 to December 31, 2013, as stipulated in Clause 1, Article 3 of Decision No. 315.

2. In cases where the 2011 budget allocation is insufficient to cover the aforementioned expenses, the 2012 budget estimate may be advanced.

Article 19. Methods of Support

1. Insurance companies shall be reimbursed by the state budget for agricultural insurance premiums (the portion that the state budget must support according to regulations) upon issuance of agricultural insurance policies and collection of insurance premiums from households, individuals, and organizations (the portion that households, individuals, and organizations must pay according to insurance contracts), based on complete documentation and procedures as specified in Article 20 of this Circular.

2. Expenses for activities implementing the pilot agricultural insurance program shall be reimbursed by the state budget when there is a budget estimate and valid expenditure vouchers as prescribed by current laws.

Article 20. Documentation, Procedures, and Formalities for Reimbursement

1. Reimbursements for Insurance Companies

a) Documents:

- A request for reimbursement of agricultural insurance premiums, prepared by the insurance company and sent to the Department of Finance and the Department of Agriculture and Rural Development according to the form specified in Appendix 36 attached to this Circular.

- A detailed table of agricultural insurance contracts for households, individuals, and organizations in each commune, prepared by the insurance company and confirmed by the People's Committee of the commune according to the form specified in Appendix 37 attached to this Circular, sent to the Department of Finance and the Department of Agriculture and Rural Development.

- An aggregate table of agricultural insurance contracts for households, individuals, and organizations in each district, prepared by the insurance company according to the form specified in Appendix 38 attached to this Circular, sent to the Department of Finance and the Department of Agriculture and Rural Development.

- An aggregate table of agricultural insurance contracts for households, individuals, and organizations throughout the province, prepared by the insurance company according to the form specified in Appendix 39 attached to this Circular, sent to the Department of Finance and the Department of Agriculture and Rural Development.

b) Process and formalities for reimbursing the state budget portion of insurance premiums to insurance companies that have signed agricultural insurance contracts with households, individuals, and organizations.

- By the 15th day of the last month of each quarter at the latest, the insurance company shall prepare a request for reimbursement of insurance premiums for agricultural insurance contracts signed with participating households, individuals, and organizations according to the provisions of point a, Clause 1 of this Article, and send it to the Department of Finance and the Department of Agriculture and Rural Development.

- Within seven days from receiving the complete application as stipulated in point a, Clause 1 of this Article, the Department of Finance, in collaboration with the Department of Agriculture and Rural Development, shall review and report to the Provincial People's Committee to implement:

+ For localities not eligible for central government financial support, reimburse insurance companies from the local government budget.

+ For localities receiving 100% or 50% central government financial support, report to the Ministry of Finance the portion of central government support according to the provisions of Clause 1, Article 22 of this Circular.

- Within ten days from receiving the review report from the Department of Finance, based on the amount of central government support and the local government portion required under the regulations, the Provincial People's Committee shall proceed with payment of the state-supported insurance premium portion to the insurance companies.

2. Expenditures for Implementing the Pilot Agricultural Insurance Program

a) Principles and Authority for Expenditure:

- Ensure separation from management and supervision activities related to insurance under the jurisdiction of the Insurance Management and Supervision Bureau, avoiding overlap in funding recipients and content.

- For expenditures requiring tendering, apply the provisions of the Law on Bidding and guiding documents.

- The Director of the Insurance Management and Supervision Bureau is responsible for managing and using funds efficiently, economically, and in accordance with legal regulations.

b) Expenditure Regulations and Levels:

- Expenditure regulations and levels for items listed in Article 17 of this Circular shall comply with current standards and expenditure limits and the provisions of this Circular.

- In cases where expenditure regulations are not established, based on actual, reasonable, and valid expenditure vouchers according to legal provisions, the Director of the Insurance Management and Supervision Bureau shall report to the Ministry of Finance for consideration and decision-making, and the Director of the Insurance Management and Supervision Bureau shall be responsible for ensuring compliance with economic and efficient expenditure regulations.

Section 5. Procedures for preparing budgets, implementing budgets, and finalizing expenditures for piloting agricultural insurance

Article 21. Budget Preparation

The preparation and implementation of the budget according to Decision 315 shall be carried out in accordance with the provisions of the State Budget Law, guiding documents, and specific regulations set forth in this Circular.

1. For expenditure on support:

a) In conjunction with the annual budget preparation period, based on the number of households, individuals, and organizations eligible and interested in participating in agricultural insurance, the Department of Agriculture and Rural Development shall estimate the funds required to implement Decision 315 and submit them to the Department of Finance for consolidation and determination of the central government's share of support according to the prescribed regime, which will then be reported to the People's Committee at the provincial level, city-level People's Committees to be submitted to the Ministry of Finance together with the local budget proposal as stipulated by the State Budget Law.

b) The Ministry of Finance shall take the lead and coordinate with relevant ministries and sectors to determine the central government's financial needs based on the financial requirements of each locality to ensure the implementation of Decision 315, which will be consolidated into the central economic affairs budget and reported to the Government for submission to the National Assembly for consideration and decision.

c) For the year 2011, the People's Committee at the provincial level shall direct relevant agencies to consolidate the central government's support funds required to implement Decision 315 according to the prescribed regime, report to the Ministry of Finance, and the Ministry of Agriculture and Rural Development for consolidation and submission to the Prime Minister for consideration and decision on supporting localities in implementation.

2. For expenditure on activities piloting agricultural insurance:

Based on annual tasks, in conjunction with the annual budget preparation period, the Ministry of Finance (Insurance Management and Supervision Department) shall prepare a pilot agricultural insurance implementation budget and submit it to the Ministry of Finance (Financial Planning Department) for consolidation into the Ministry of Finance's administrative management budget within the annual budget plan to be reported to the Government for submission to the National Assembly for approval.

Article 22. Implementation of Budgets and Finalization of Expenditures

1. For expenditure on support:

a) Based on signed agricultural insurance contracts, no later than the 15th day of the last month of each quarter, insurance companies shall compile the expenditure for each commune, district, and province according to the annexes specified in point a, Clause 1, Article 20, and submit them to the Department of Finance and the Department of Agriculture and Rural Development.

Within ten days from receiving complete documentation requesting payment of insurance premiums from insurance companies, the Department of Finance shall coordinate with the Department of Agriculture and Rural Development to review and report to the People's Committee at the provincial level with a document (including a summary report on the participation results of households, individuals, and organizations in agricultural insurance according to the model attached as Annex 40 to this Circular) to the Ministry of Finance requesting support for the central government's share of funding according to the prescribed regime.

b) Based on the amount of funds decided by the National Assembly and the request for support from localities, within ten days, the Ministry of Finance shall review and supplement the targeted funds from the central government's budget to the local budget to implement Decision 315.

c) The payment from the state budget to insurance companies shall be carried out in accordance with the provisions of Article 20 of this Circular.

d) Support funds for implementing policies under Decision 315 shall be recorded and consolidated into the finalization of the state budget in accordance with the provisions of the State Budget Law.

2. For expenditure on activities piloting agricultural insurance

Based on the allocated budget and the volume of work to be performed, the Ministry of Finance (Insurance Management and Supervision Department) shall carry out budget withdrawals and payments to units and organizations in accordance with current regulations.

The State Treasury shall control expenditures in accordance with the Ministry of Finance's regulations on the management, issuance, and settlement of state budget expenditures through the State Treasury in accordance with current regulations.

The Ministry of Finance (Insurance Management and Supervision Department) shall record and finalize the state budget expenditures for piloting agricultural insurance under Decision 315 in accordance with current laws.

Chapter III

RESPONSIBILITIES OF MINISTRIES, PEOPLE'S COMMITTEES OF PROVINCES AND CITIES WITH RELEVANT INTERESTS, INSURANCE COMPANIES, AND THE NATIONAL INSURANCE CORPORATION OF VIETNAM JOINT STOCK COMPANY

Article 23. The Ministry of Finance shall be responsible for:

1. Deciding on insurance companies to pilot according to the model prescribed in Appendix 2 attached to this Circular.

2. Approving rules, terms, premium rates, and liability limits of insurance, confirming the registration area of insurance companies in accordance with this Circular.

3. Guiding financial mechanisms and support policies for insurance companies piloting agricultural insurance and implementing support (if any) within its authority.

4. Guiding the documentation, procedures, and process for supporting the implementation of pilot agricultural insurance, ensuring compliance with the scope, target groups, and areas eligible for support.

5. Providing funding support in accordance with this Circular.

6. Preparing and allocating the budget for funding support, publicity, and advisory services for the implementation of Decision 315 in accordance with this Circular.

7. Conducting inspections and supervision of insurance companies implementing pilot agricultural insurance; inspecting and supervising the provision of funding support, advisory services, and publicity.

8. Annually reporting to the Prime Minister on the situation and results of the pilot implementation of agricultural insurance.

9. Summarizing and evaluating the completion of the pilot implementation phase of agricultural insurance and submitting it to the Prime Minister.

10. Coordinating with the Ministry of Agriculture and Rural Development and People's Committees of provinces and cities in disaster prevention and loss reduction work.

Article 24. The Ministry of Agriculture and Rural Development shall be responsible for:

1. Directing and announcing types of natural disasters (typhoons, floods, droughts, severe cold, frost damage, frostbite, freezing, and other types of natural disasters); diseases (avian flu, blue tongue disease, foot-and-mouth disease, aquatic animal diseases, brown planthopper disease, rice stunt, leaf curl disease, and other diseases) covered by insurance; guiding criteria for the scale of rice cultivation, livestock breeding, and aquaculture participating in the pilot agricultural insurance; guiding standards for rice cultivation, livestock breeding, and aquaculture participating in the pilot agricultural insurance.

2. Coordinating with the Ministry of Finance to approve rules, terms, premium rates, and liability limits of insurance in accordance with this Circular.

3. Announcing and providing information about diseases at the request of insurance companies to serve as a basis for establishing rules, terms, premium rates, risk assessment, loss appraisal, and insurance compensation.

4. Coordinating with the Ministry of Finance and People's Committees of provinces and cities in the pilot implementation area to inspect and supervise the implementation of the pilot program in that area; inspecting and supervising the provision of funding support.

5. Issuing, guiding, and coordinating with the Ministry of Finance and People's Committees of provinces and cities in disaster prevention and loss reduction work.

6. Reporting the implementation status and proposing measures for implementation to the Ministry of Finance no later than thirty days from the end of each quarter.

Article 25. The Ministry of Natural Resources and Environment shall be responsible for:

1. Announcing meteorological and hydrological information, extreme values of meteorological and hydrological factors, and extreme weather phenomena (typhoons, floods, droughts, severe cold, frost damage, frostbite, freezing, saltwater intrusion, tsunamis) affecting the yield and production of rice crops, livestock, and aquaculture to serve as a basis for establishing rules, terms, premium rates, and insurance compensation.

2. Announcing and providing weather index information at the request of insurance companies to serve as a basis for establishing rules, terms, premium rates, risk assessment, loss appraisal, and insurance compensation.

Article 26. The People's Committees of provinces and centrally governed cities in the pilot implementation areas shall be responsible for:

1. Establishing a Steering Committee on agricultural insurance at the local level, with the Vice Chairman of the Provincial or Central City People's Committee serving as the Head of the Committee.

2. Registering the areas participating in the pilot implementation of agricultural insurance (village, district), the insured objects (rice crops, livestock, aquatic products) according to the model prescribed in Appendix 11 issued together with this Circular.

3. Directing the People's Committees of communes in the pilot implementation areas to confirm the participants in insurance and the insured objects to serve as the basis for concluding insurance contracts and for enterprises providing insurance to request competent authorities to allocate support funds according to the models prescribed in Appendices 12, 19, and 26 issued together with this Circular.

4. Coordinating with the Ministry of Finance to approve the rules, terms, premium rates, and liability limits for insurance as stipulated in this Circular.

5. Directing and organizing the implementation of the pilot agricultural insurance program; allocating support funds (from central and local budgets).

6. Providing or directing relevant departments and People's Committees at all levels to provide data and information according to the models prescribed in Appendices 14, 15, 16, 17, 18, 21, 22, 23, 24, 25, 28, 29, 30, 31, 32, 33, 34, and 35 issued together with this Circular to serve as the basis for preparing budgets, allocating support funds; calculating premiums; determining the value of insurance, risks covered, and insurance compensation.

7. Directing the People's Committees of communes in the pilot implementation areas and specialized agencies to cooperate with insurance enterprises in organizing activities to promote, introduce, guide, and update information about the rules, terms, and premium rates of the proposed agricultural insurance products in the area for poor and near-poor households and individuals, non-poor and near-poor households and individuals, and agricultural production organizations in the commune; arranging the conclusion of insurance contracts; collecting insurance premiums; identifying loss objects, causes of losses, and degrees of loss according to the models prescribed in Appendices 13, 20, and 27 to coordinate with insurance enterprises in resolving insurance compensation when insurance events occur.

8. Cooperating with the Ministry of Finance and the Ministry of Agriculture and Rural Development in inspecting and supervising the implementation of the pilot program in the area; inspecting and supervising the allocation of support funds.

9. Cooperating with the Ministry of Finance and the Ministry of Agriculture and Rural Development in preventive work and minimizing losses.

10. Organizing publicity about the implementation of the pilot agricultural insurance program through mass media in the pilot implementation areas.

11. Reporting on the implementation status and proposing measures for implementation within thirty days from the end of each quarter to the Ministry of Finance and the Ministry of Agriculture and Rural Development.

Article 27. Insurance enterprises participating in the pilot implementation of agricultural insurance shall be responsible for:

1. Registering the pilot implementation of agricultural insurance according to the model prescribed in Appendix 1 issued together with this Circular.

2. Studying, developing, and submitting to the Ministry of Finance for approval the rules, terms, and premium rates for insurance as stipulated in this Circular.

3. Cooperating with the People's Committees of communes in the pilot implementation areas to organize activities to promote, introduce, guide, and update information about the rules, terms, and premium rates of the proposed agricultural insurance products in the area for poor and near-poor households and individuals, non-poor and near-poor households and individuals, and agricultural production organizations in the commune; arranging the conclusion of insurance contracts; collecting insurance premiums; identifying loss objects, causes of losses, and degrees of loss to serve as the basis for resolving insurance compensation when insurance events occur.

4. Cooperating with the Provincial People's Committee to announce and confirm types of natural disasters (typhoons, floods, droughts, heavy frosts, frost damage, frostbite, saline intrusion, tsunamis) and diseases (for rice: dwarf disease, yellow dwarf disease, black streaked dwarf disease, brown planthopper disease; for cattle: foot-and-mouth disease; for pigs: blue ear disease, foot-and-mouth disease; for chickens and ducks: avian influenza; for catfish: hepatopancreatic necrosis disease; for whiteleg shrimp: white spot syndrome, yellow head disease, Taura syndrome, hepatopancreatic necrosis disease) occurring in specific localities to serve as the basis for assessing risks, appraising losses, and compensating insurance.

5. Cooperating with the Provincial People's Committee in confirming losses caused by natural disasters and diseases in the pilot implementation areas of agricultural insurance to serve as the basis for resolving insurance compensation.

6. Cooperating with the General Statistics Office of the province or centrally governed city in announcing actual rice yields after each crop, the price of the most recent rice crop, and economic values related to animal husbandry and aquaculture to serve as the basis for calculating premiums and resolving insurance compensation.

7. Organizing publicity about the implementation of the pilot agricultural insurance program through mass media in the pilot implementation areas.

8. Reporting to the Ministry of Finance on the results of implementing the pilot program as stipulated in this Circular.

Article 28. The National Joint Stock Reinsurance Corporation of Vietnam shall be responsible for

1. Establishing reinsurance programs and accepting reinsurance in accordance with this Circular and relevant laws.

2. Reporting to the Ministry of Finance on the results of implementing the pilot program as prescribed in this Circular.

Chapter IV

IMPLEMENTATION

Article 29. Effective Date

1. This Circular takes effect from October 1, 2011.

2. During implementation, if there are difficulties or obstacles, they are requested to be promptly reported to the Ministry of Finance for consideration and resolution./.