Circular No. 137/1999/TT-BTC of the Ministry of Finance guiding construction project insurance

CIRCULAR

Guidelines for Construction Project Insurance

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Pursuant to Decree No. 100/CP dated December 18, 1993 and Decree No. 74/CP dated June 14, 1997 of the Government on insurance operations and the guiding circulars of the Ministry of Finance;

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government on the issuance of regulations on investment management and construction;

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.

When conducting investment and construction activities, projects using state budget capital, state-guaranteed credit, state development credit, and state enterprise investment capital must purchase construction project insurance to address unexpected and unforeseeable risks. For people's construction projects, the State encourages the purchase of construction project insurance.

Construction project insurance for foreign direct investment projects shall be implemented in accordance with the provisions of the laws on foreign investment in Vietnam.

2. Insurance costs for construction projects are part of the project investment capital and are included in the total project estimate (project estimate).

Insurance costs are determined according to the current regulations of the Ministry of Finance, representing the maximum amount for purchasing insurance for the project at legally operating insurance companies in Vietnam.

3. Construction consulting organizations and construction contractors must purchase professional liability insurance for consultancy products, materials and equipment, construction workshops serving construction, work injury insurance for workers, and civil liability insurance for third parties during the implementation of the project. Insurance premiums are included in production costs.

II. SPECIFIC PROVISIONS

1. Compulsory insurance objects

- Projects using state budget capital, state-guaranteed credit, state development credit, and state enterprise development capital.

- Consultancy products, materials and equipment, construction workshops serving construction, and workers of construction consulting organizations and contractors during the implementation of the project.

2. Types of insurance.

- Construction project insurance during the implementation of investment. Construction insurance costs are included in the value of the project under other cost items.

- Material and equipment transportation insurance from the place of purchase (receiving goods) to the site of the project and while being stored in warehouses. Insurance costs are included in the value of the materials and equipment.

- Material, equipment, and construction workshop insurance serving the project under the management responsibility of organizations related to the investment project.

- Civil liability insurance for third parties during construction; work injury insurance for workers.

- Professional liability insurance for investment and construction consultancy under the responsibility of consulting organizations.

3. Methods of purchasing insurance:

3.1. Insurance rules, terms, and premium rates: Implemented according to the current regulations of the Ministry of Finance.

3.2. Insured party:

- Construction project insurance: The project sponsor or the contractor authorized by the sponsor to purchase construction project insurance selected by the sponsor. In cases where insurance costs have been included in the bid price, the contractor will purchase construction project insurance.

- For civil liability insurance and property insurance under the management responsibility of organizations related to the investment project: These organizations will purchase insurance.

3.3. Procedures for purchasing insurance:

For construction project insurance: The insurance purchase documents include:

+ Site plan of the project

+ Summary document on the structure and construction methods of the project

+ Bid price or approved total estimate

+ Material and equipment procurement contract

+ Other necessary documents as stipulated by the insurance rules.

- For property insurance and civil liability insurance of organizations related to the investment project: These organizations will purchase insurance. The insurance purchase documents include:

+ List of quantities and values of materials, machinery, and equipment on the construction site.

+ List of workers participating in insurance.

+ Estimate of surrounding assets that may be damaged during construction.

+ Other necessary documents as required by the insurance rules.

- Professional liability insurance: The insurance purchase documents include:

+ Main contents of the investment project

+ Information about the consulting organization's capacity.

+ Contents of the consulting organization's work when implementing the project.

+ Technical parameters of the project (soil conditions, groundwater level, foundation, structure, materials, construction methods...).

Based on the insurance premium estimate, premium rate table, and the above documents, the insurance company will quote the insurance premium and issue the insurance policy upon selection.

3.4. Payment of insurance costs:

- For construction project insurance, the insurance premium is paid once or multiple times according to the insurance policy and the approved annual capital plan.

- For material and equipment insurance and other types of insurance, the insurance premium is paid according to the insurance policy.

4. Compensation

- Upon occurrence of an incident within the scope of insurance liability, the insured party must immediately notify the insurance company and provide detailed written notification within seven days.

- Upon receiving the notification from the insured party, the insurance company must send staff or invite specialized experts (if necessary) to the scene within three days to assess the cause and extent of the loss.

- The insurance company must compensate the insured party according to the conditions and terms of the insurance policy.

III. IMPLEMENTATION PROVISIONS

This circular takes effect fifteen days from the date of signature and replaces Circular No. 65/TC-ĐTPT dated November 2, 1996 of the Ministry of Finance.

During implementation, if any difficulties arise, please promptly reflect them to the Ministry of Finance for study and resolution.