DECREE

Regulations on Compulsory Fire and Explosion Insurance

________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Insurance Business Law dated December 9, 2000;

Based on the Law on Fire Prevention and Fighting dated June 29, 2001;

At the proposal of the Minister of Public Security and the Minister of Finance,

DECREE

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the compulsory fire and explosion insurance regime for assets of facilities with fire and explosion hazards; the responsibilities of insurance companies and facilities required to purchase compulsory fire and explosion insurance in implementing the compulsory fire and explosion insurance regime; the responsibilities of Ministries, ministerial-level agencies, governmental agencies, and People's Committees of provinces and centrally governed cities.

Article 2. Applicability

This Decree applies to:

1. Agencies, organizations, and individuals having facilities with fire and explosion hazards as specified in Appendix 1 of Government Decree No. 35/2003/NĐ-CP dated April 4, 2003, detailing the implementation of certain provisions of the Law on Fire Prevention and Fighting.

2. Insurance enterprises permitted to operate compulsory fire and explosion insurance according to the provisions of the law.

3. In cases where international treaties to which Vietnam is a party provide different provisions, such provisions shall be applied.

Article 3. Purchase of Compulsory Fire and Explosion Insurance

1. Agencies, organizations, and individuals subject to compulsory fire and explosion insurance must purchase insurance from insurance enterprises permitted to operate compulsory fire and explosion insurance in Vietnam, starting from when there is a risk of fire or explosion.

2. The State encourages agencies, organizations, and individuals not subject to compulsory fire and explosion insurance under this Decree to voluntarily purchase fire and explosion insurance based on their own willingness and in accordance with relevant legal provisions.

Article 4. Enterprises Operating Compulsory Fire and Explosion Insurance

Insurance enterprises permitted to operate compulsory fire and explosion insurance under this Decree are those enterprises holding a business license issued by the Ministry of Finance for establishment and operation in insurance activities.

Chapter II

REGIME OF COMPULSORY FIRE AND EXPLOSION INSURANCE

Article 5. Entities Required to Purchase Compulsory Fire and Explosion Insurance

1. Agencies, organizations, and individuals having facilities with fire and explosion hazards as specified in Appendix 1 of Government Decree No. 35/2003/NĐ-CP dated April 4, 2003, detailing the implementation of certain provisions of the Law on Fire Prevention and Fighting must purchase compulsory fire and explosion insurance for the assets of such facilities.

2. The Ministry of Finance, in collaboration with the Ministry of Public Security and the Ministry of Construction, shall specify and guide in detail the specific cases requiring compulsory fire and explosion insurance, particularly collective housing and apartment buildings.

3. Based on actual circumstances, the Ministry of Public Security, in collaboration with the Ministry of Finance, shall submit to the Prime Minister for supplementation or removal from the list of facilities with fire and explosion hazards required to participate in compulsory fire and explosion insurance as stipulated in this Decree.

Article 6. Assets Required to Participate in Compulsory Fire and Explosion Insurance

Assets required to participate in compulsory fire and explosion insurance include: houses, architectural works, and accompanying equipment; machinery and equipment; various types of goods, materials, and other assets whose value can be calculated in monetary terms.

Article 7. Minimum amount of compulsory fire and explosion insurance

The minimum amount of compulsory fire and explosion insurance is the market value of the assets required to participate in compulsory fire and explosion insurance at the time of insurance participation. In cases where the market value of the asset cannot be determined, the amount of compulsory fire and explosion insurance shall be agreed upon by both parties.

Article 8. Implementation of Compulsory Fire and Explosion Insurance Regime

The obligation to participate in the compulsory fire and explosion insurance regime as stipulated in this Decree is reflected through the conclusion of compulsory fire and explosion insurance contracts between the insured party and the insurance company.

The insurance certificate is evidence of the conclusion of the compulsory fire and explosion insurance contract.

Article 9. Compulsory Fire and Explosion Insurance Contract

1. The insurance contract is an agreement between the insured party and the insurance company, whereby the insured party must pay the insurance premium, and the insurance company must compensate the insured when a fire or explosion event occurs.

2. The compulsory fire and explosion insurance contract must include the following main contents:

a) Name and address of the insurance company, the insured party;

b) Insured object;

c) Insurance conditions, scope of insurance, insurance clauses;

d) Value of the insured property against fire and explosion;

đ) Rules, insurance rate table applied;

e) Exclusion clauses from insurance liability;

g) Insurance period;

h) Premium amount, method of payment;

i) Damage assessment authority when necessary;

k) Term, method of payment for insurance or compensation;

l) Responsibilities of the insured and insurer;

m) Provisions for dispute resolution;

n) Liability of the party violating the contract;

o) Date, month, year of contract conclusion.

3. In addition to the contents prescribed in Clause 2 of this Article, the compulsory fire and explosion insurance contract may contain other contents agreed upon by the parties but not contrary to relevant laws.

Article 10. Exclusion of Insurance Liability

The insurance company has no obligation to compensate if the damage is caused by one of the following reasons:

1. Earthquake, volcanic eruption, or other natural phenomena.

2. Property self-fermenting or self-heating.

3. Property affected by a process using heat.

4. Lightning striking directly on the insured property without causing fire or explosion.

5. Nuclear weapon materials causing fire or explosion.

6. Damage occurring to machinery, electrical equipment, or parts of electrical equipment due to overload, overpressure, short circuit, self-heating, electric arc, or leakage caused by any reason, including lightning strike.

7. Damages caused by intentional actions of the insured to ignite fire or explosion with the purpose of claiming compensation under the insurance contract.

8. Damages caused by intentionally violating fire prevention and firefighting regulations leading to fire or explosion.

9. Commodity entrusted or consigned unless such commodities are confirmed in the insurance certificate as being insured and the insured pays additional insurance premiums as prescribed.

10. Money, precious metals, gems, securities, letters of guarantee, documents, manuscripts, business books, electronic data storage media, models, certificates, molds, drawings, design documents, unless these items are confirmed in the insurance certificate.

11. Explosives, unless confirmed as being insured in the insurance certificate.

12. Properties that at the time of loss were insured under marine insurance policies or were within the liability of marine insurance policies, except for losses exceeding the liability under the marine insurance policy.

13. Damages caused by fire or explosion to third parties.

14. Damages to data, software, and computer programs.

15. Damages caused by political, security, and social order incidents.

16. Other cases of exclusion from insurance liability as prescribed by law or agreed upon by the parties.

For the above cases of exclusion from insurance liability, if the insured party requests insurance and the insurance company agrees to insure, the parties can still conclude supplementary insurance contracts for those events.

Article 11. Damage Assessment in Case of Fire or Explosion

When damage occurs due to fire or explosion, the insurance company and the policyholder shall cooperate to determine the extent of the damage. In case the insurance company and the policyholder cannot agree on the value of the damage, either party or both parties have the right to invite an agency or organization with the function of evaluating assets and assessing damage.

Article 12. Rights of the Policyholder

1. To choose an insurance company permitted to operate mandatory fire and explosion insurance to purchase such insurance.

2. To request the insurance company to explain and provide information related to the conclusion, performance, and termination of the mandatory fire and explosion insurance contract.

3. To demand prompt, full, and accurate compensation from the insurance company according to the provisions of the mandatory fire and explosion insurance contract.

4. To negotiate with the insurance company regarding the contents of the insurance contract without contravening legal regulations.

5. To include the cost of purchasing mandatory fire and explosion insurance in the product or service cost for production and business establishments or to include it in the budget allocated by the state for administrative and public service units.

6. To initiate civil litigation against the insurance company if the company fails to compensate within the stipulated time frame or does not provide accurate compensation as specified in the insurance contract.

Article 13. Obligations of the Policyholder

1. To participate in mandatory fire and explosion insurance as prescribed in this Decree and relevant legal regulations.

2. To comply with fire prevention and firefighting regulations as stipulated in Article 9 of Decree No. 35/2003/NĐ-CP dated April 4, 2003, detailing the implementation of certain provisions of the Law on Fire Prevention and Fighting.

3. To cooperate with insurance companies during the execution of the mandatory fire and explosion insurance contract.

4. To fully perform all obligations stipulated in the mandatory fire and explosion insurance contract.

5. To promptly notify the insurance company about factors that change the risk level to adjust conditions and insurance premiums accordingly.

Article 14. Rights of the Insurance Company

1. To collect insurance premiums as stipulated in the insurance contract and in accordance with the mandatory fire and explosion insurance premium schedule as prescribed by law.

2. To refuse to sell mandatory fire and explosion insurance when the policyholder does not fully meet the fire prevention and firefighting conditions as prescribed in Clause 2, Article 13 of this Decree.

3. To refuse to process claims for cases excluded from insurance liability as prescribed in Article 10 of this Decree.

Article 15. Obligations of the Insurance Company

1. To implement fire and explosion insurance as prescribed in this Decree and relevant laws governing insurance operations.

2. To sell mandatory fire and explosion insurance when the policyholder has met the fire prevention and firefighting conditions as prescribed in Clause 2, Article 13 of this Decree.

3. To pay compensation fully, promptly, and accurately as stipulated in the insurance contract and related legal documents.

4. To contribute funds for fire prevention and firefighting activities as prescribed in Article 16 of this Decree.

5. To provide comprehensive explanations to the policyholder regarding their rights and obligations, as well as those of the insurance company; to supply the policyholder with the content of the premium schedule and rules for mandatory fire and explosion insurance issued by the Ministry of Finance.

6. To be subject to inspection and supervision by competent state agencies in the implementation of mandatory fire and explosion insurance.

7. To coordinate with the Fire Prevention and Fighting Police Department and the insured entity to implement mandatory fire and explosion insurance and to prevent and limit losses at the insured premises.

8. To fulfill other obligations as prescribed by law.

9. To periodically report to the Ministry of Finance on the results of mandatory fire and explosion insurance business according to the form prescribed by the Ministry of Finance.

Article 16. Collection of Operating Costs from Compulsory Fire and Explosion Insurance for Contributions to Fire Prevention and Extinguishing Activities

1. Enterprises operating compulsory fire and explosion insurance shall be responsible for allocating 5% of the total premiums collected from compulsory fire and explosion insurance to contribute towards funding for fire prevention and extinguishing activities.

2. Every six months, the insurance enterprise shall transfer the amount of funds collected according to Clause 1 of this Article into a temporary account opened by the Ministry of Public Security at the State Treasury to create additional annual funding sources for fire prevention and extinguishing activities.

The Ministry of Finance shall provide detailed guidance on the content of expenditures, management mechanisms, distribution, payment, and settlement of these funds.

Chapter III

RESPONSIBILITIES OF MINISTRIES, GOVERNMENT-LEVEL AGENCIES, AND PEOPLE'S COMMITTEES OF PROVINCES AND CITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT IN IMPLEMENTING THE COMPULSORY FIRE AND EXPLOSION INSURANCE REGIME

Article 17. Responsibilities of the Ministry of Finance

1. To take the lead and coordinate with the Ministry of Public Security in guiding enterprises in implementing the compulsory fire and explosion insurance regime.

2. To inspect, supervise the collection, submission, and use of funds derived from compulsory fire and explosion insurance in accordance with the provisions of the law.

3. To issue rules, premium rates, and insurance rate tables for compulsory fire and explosion insurance as stipulated in this Decree.

Article 18. Responsibilities of the Ministry of Public Security

1. To guide inspections for fire safety and firefighting, and inspections of compliance with fire safety conditions for facilities required to purchase compulsory fire and explosion insurance.

2. To issue certificates confirming compliance with fire safety conditions for facilities specified in Appendix 2 of Government Decree No. 35/2003/NĐ-CP dated April 4, 2003, detailing the implementation of certain provisions of the Law on Fire Prevention and Fighting.

3. To receive, manage, utilize, and settle accounts for contributions to fire prevention and firefighting activities derived from compulsory fire and explosion insurance in accordance with the law.

Article 19. Responsibilities of Ministries, Government-Level Agencies, and Government-Affiliated Agencies

Within their respective duties and authorities, Ministries, government-level agencies, and government-affiliated agencies shall be responsible for coordinating to organize inspections, provide guidance, and implement the compulsory fire and explosion insurance regime as prescribed in this Decree.

Article 20. Responsibilities of People's Committees of Provinces and Cities Directly Under the Central Government

People's Committees of provinces and cities directly under the central government shall be responsible for organizing propaganda and dissemination of this Decree, coordinating with the Ministry of Finance and the Ministry of Public Security to implement the compulsory fire and explosion insurance regime, and applying preventive measures to limit losses caused by fires and explosions.

Chapter IV

REWARD AND VIOLATION HANDLING

Article 21. Awards

Organizations, individuals, and insurance enterprises that make positive contributions and achieve good economic and social outcomes in implementing the compulsory fire and explosion insurance regime shall be awarded in accordance with state regulations.

Article 22. Handling of violations Complaints and Prosecutions

Organizations, individuals, and insurance enterprises violating this Decree shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the nature and severity of the violation, and must compensate for damages in accordance with the law if such violations cause harm.

Organizations, individuals have the right to file complaints and accusations against competent state agencies regarding acts infringing upon the rights and interests of organizations, individuals carried out by employees or enterprises engaged in compulsory fire and explosion insurance. Complaints and accusations, as well as their resolution, shall be conducted in accordance with the Law on Complaints and Accusations.

Chapter V

IMPLEMENTING PROVISIONS

Article 23. Effectiveness of Implementation

This Decree shall take effect fifteen days after its publication in the Official Gazette.

Article 24. Implementation

1. The Ministry of Finance and the Ministry of Public Security shall be responsible for providing guidance on the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally governed city People's Committees are responsible for implementing this Decree./.