JOINT CIRCULAR No. 214/2013/TTLT-BTC-BCA detailing and guiding the implementation of certain provisions of Decree No. 130/2006/NĐ-CP dated November 8, 2006, and Decree No. 46/2012/NĐ-CP dated May 22, 2012 on compulsory fire and explosion insurance.

JOINT CIRCULAR

Regulations detailing the implementation of certain provisions of Decree No. 130/2006/NĐ-CP dated November 8, 2006, and Decree No. 46/2012/NĐ-CP dated May 22, 2012 on mandatory fire and explosion insurance.

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Pursuant to Decree No. 35/2003/NĐ-CP dated April 4, 2003 of the Government detailing the implementation of certain provisions of the Law on Fire Prevention and Fighting;

Pursuant to Decree No. 130/2006/NĐ-CP dated November 8, 2006 of the Government on the regime of mandatory fire and explosion insurance;

Pursuant to Decree No. 46/2012/NĐ-CP dated May 22, 2012 of the Government amending and supplementing some articles 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 and Decree No. 130/2006/NĐ-CP dated November 8, 2006 on the regime of mandatory fire and explosion insurance;

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. 77/2009/NĐ-CP dated September 15, 2009 stipulating the functions, tasks, powers, and organizational structure of the Ministry of Public Security;

The Minister of Finance and the Minister of Public Security issue this Circular detailing the implementation of certain provisions of Decree No. 130/2006/NĐ-CP dated November 8, 2006 and Decree No. 46/2012/NĐ-CP dated May 22, 2012 on the regime of mandatory fire and explosion insurance.

Article 1. Scope of Regulation

This Circular guides the implementation of the regime of mandatory fire and explosion insurance for assets of premises required to purchase such insurance; the responsibility of insurance companies in setting aside funds for fire prevention and firefighting activities (hereinafter referred to as PCCC) and the management mechanism for the allocation, payment, and settlement of these funds; and the responsibilities of competent state agencies.

Article 2. Applicability

This Circular applies to agencies, organizations, and individuals with premises at risk of fire and explosion as specified in Appendix 1 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 (hereinafter referred to as Decree No. 35/2003/NĐ-CP), Clause 7, Article 1 of Decree No. 46/2012/NĐ-CP dated May 22, 2012 of the Government amending and supplementing certain provisions 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 and Decree No. 130/2006/NĐ-CP dated November 8, 2006 on the regime of mandatory fire and explosion insurance (hereinafter referred to as Decree No. 46/2012/NĐ-CP), insurance companies permitted to operate mandatory fire and explosion insurance, and competent state agencies.

Article 3. Implementation of the regime of mandatory fire and explosion insurance

1. Agencies, organizations, and individuals with premises at risk of fire and explosion as specified in Appendix 1 of Decree No. 35/2003/NĐ-CP and Clause 7, Article 1 of Decree No. 46/2012/NĐ-CP must purchase mandatory fire and explosion insurance for the assets of those premises.

2. Responsibility for purchasing mandatory fire and explosion insurance

a) For premises required to purchase mandatory fire and explosion insurance, the head of the agency, organization, or individual owning the premises shall be responsible for purchasing such insurance.

b) For premises where there are multiple households such as apartment buildings or within a single premise where multiple agencies, organizations, or individuals rent space, the responsibility for purchasing mandatory fire and explosion insurance shall be implemented as follows:

- In cases where the owner of the premises, the person entrusted by the owner to manage it, or a common representative (hereinafter collectively referred to as the representative) can be identified, that person shall be responsible for purchasing the insurance. Each household, agency, organization, or individual shall be responsible for paying the insurance premium to the representative. In this case, the insured party is each household, agency, organization, or individual that has paid the premium to the representative.

- In cases where no representative can be identified, each household, agency, organization, or individual within the premises shall be directly responsible for purchasing mandatory fire and explosion insurance.

3. Insurance companies, agencies, organizations, and individuals implementing the regime of mandatory fire and explosion insurance shall follow the rules and premium rates for mandatory fire and explosion insurance issued by the Ministry of Finance. In the event of loss, determining the cause of the fire or explosion leading to the loss falls under the responsibility of the competent public security authority.

4. Provisions regarding the objects and assets required to purchase mandatory fire and explosion insurance; the minimum amount of mandatory fire and explosion insurance; the insurance contract for mandatory fire and explosion insurance; and other provisions regarding the regime of mandatory fire and explosion insurance shall be implemented according to Chapter II of Decree No. 130/2006/NĐ-CP and Article 2 of Decree No. 46/2012/NĐ-CP.

5. Insurance companies may not refuse to sell mandatory fire and explosion insurance when the buyer complies with the laws on PCCC, except in the following cases:

a) Premises have not been inspected and approved for PCCC upon construction, renovation, or change of use;

b) Premises lack a PCCC inspection report from the Fire Prevention and Fighting Police Department or the inspection report is over one year old from the date of issuance to the date of purchasing mandatory fire and explosion insurance;

c) Premises are currently suspended or temporarily suspended due to serious violations of PCCC regulations.

6. Insurance companies have the right to terminate the insurance contract for mandatory fire and explosion insurance if the buyer fails to comply with the terms of the insurance contract. The termination of the insurance contract shall be carried out in accordance with the law.

Article 4. Methods of Contributing to Fire Prevention and Fighting Activities

1. Enterprises engaged in mandatory fire and explosion insurance business shall be responsible for contributing funds to serve fire prevention and fighting activities in accordance with the guidance of the Ministry of Finance.

Within thirty days from June 30 and December 31 each year, insurance enterprises shall be responsible for transferring the amount of funds contributed for fire prevention and fighting activities into the account opened by the Fire Prevention and Fighting Police Department at the State Treasury under the Ministry of Public Security; report on the results of mandatory fire and explosion insurance business and report on the amount of funds deducted from mandatory fire and explosion insurance according to Appendixes 4 and 5 issued together with Circular No. 220/2010/TT-BTC dated December 30, 2010 of the Ministry of Finance guiding the implementation of the mandatory fire and explosion insurance system and send it to the Ministry of Finance.

2. For comprehensive insurance contracts that include mandatory fire and explosion insurance, insurance enterprises shall be responsible for separately identifying the mandatory fire and explosion insurance portion through an appendix attached to the contract and must contain all contents stipulated in Article 9 of Decree No. 130/2006/NĐ-CP.

3. Within ninety days from the end of the fiscal year, insurance enterprises shall be responsible for preparing a final settlement report on the funds required to be contributed for fire prevention and fighting activities according to Appendix 6 issued together with Circular No. 220/2010/TT-BTC dated December 30, 2010 of the Ministry of Finance guiding the implementation of the mandatory fire and explosion insurance system and send it to the Ministry of Finance.

Insurance enterprises shall be responsible for reconciling the submitted data with the data in the final settlement report on the funds contributed; if the amount submitted exceeds the amount due, the excess amount will be retained for calculation towards the contribution of the following year; if the amount submitted is less than the amount due, the insurance enterprise shall be responsible for promptly making up the shortfall within five working days.

Article 5. Management, Allocation, Payment, and Final Settlement of Funds Contributed for Fire Prevention and Fighting Activities

1. Annually, based on the content of expenditures as stipulated in Clause 2 of this Article, the revenue of the previous year, and the anticipated revenue of the planned year, the Ministry of Public Security shall prepare a budget for revenue and expenditure from the funds contributed for fire prevention and fighting activities and submit it to the Ministry of Finance.

2. The funds contributed by insurance enterprises from conducting mandatory fire and explosion insurance business shall be used for fire prevention and fighting activities with the following contents:

a) Investing in equipping firefighting equipment and devices for the Fire Prevention and Fighting Police Force. The expenditure for this item shall not be less than 70% of the actual expenditure for fire prevention and fighting activities in the year; the remaining funds, not exceeding 30%, shall be used for the activities specified in points b and c of this clause.

b) Supporting propaganda, guidance, and dissemination of fire prevention and fighting knowledge and general legal knowledge to the public. The content and expenditure for these activities shall be applied according to Joint Circular No. 73/2010/TTLT-BTC-BTP dated May 14, 2010 of the Ministry of Finance and the Ministry of Justice guiding the preparation, management, use, and final settlement of funds to ensure various legal education and dissemination activities.

c) Supporting rewards for achievements in fire prevention and fighting work for the following subjects:

- Organizations and individuals directly involved in fire prevention and fighting tasks;

- Organizations and individuals participating in cooperation in fire prevention and fighting work.

The maximum reward shall not exceed five million dong for groups and three million dong for individuals. The Ministry of Public Security shall provide specific guidelines on rewarding organizations and individuals who have made achievements in fire prevention and fighting work.

3. Funds contributed for fire prevention and fighting activities from conducting mandatory fire and explosion insurance business that remain unspent at the end of the year may be carried over to the next year for continued expenditure according to the guidelines set out in this Circular.

Article 6. Responsibilities of related agencies

1. The Fire Prevention and Fighting Police Department (Ministry of Public Security) shall be responsible for:

a) Cooperating with the competent agencies of the Ministry of Finance (Insurance Supervision Department) to promote and disseminate laws on mandatory fire and explosion insurance; urging facilities with fire and explosion risks to participate in mandatory fire and explosion insurance.

b) Receiving, managing, using, paying, and settling the funds contributed for fire prevention and fighting activities by insurance enterprises in accordance with the law.

c) Announcing the list of facilities with fire and explosion risks that must purchase mandatory fire and explosion insurance nationwide to insurance enterprises through the Vietnam Insurance Association every quarter.

2. The Insurance Supervision Department (Ministry of Finance) shall be responsible for:

a) Cooperating with the Fire Prevention and Fighting Police Department to promote and disseminate laws on mandatory fire and explosion insurance; urging facilities with fire and explosion risks to participate in mandatory fire and explosion insurance.

b) Inspecting and supervising insurance enterprises in implementing mandatory fire and explosion insurance, imposing penalties promptly on insurance enterprises that fail to sell mandatory fire and explosion insurance as prescribed.

c) Verifying the accuracy of the data in the final settlement reports on funds required to be contributed for fire prevention and fighting activities and urging insurance enterprises to pay the required contributions in full.

3. Provincial and centrally-administered city Fire Prevention and Fighting Police Departments shall be responsible for:

a) Guiding facilities that must purchase mandatory fire and explosion insurance to self-inspect fire safety and implement fire safety conditions as stipulated in Article 9 of Decree No. 35/2003/NĐ-CP and Clause 1 of Article 1 of Decree No. 46/2012/NĐ-CP.

b) Regularly inspecting fire safety at facilities with fire and explosion risks quarterly; conducting spot inspections when there are signs of danger or loss of fire safety or when special requests are made.

c) Inspecting and supervising facilities with fire and explosion risks that must purchase mandatory fire and explosion insurance, imposing penalties promptly on facilities with fire and explosion risks that must purchase mandatory fire and explosion insurance but do not participate in insurance as prescribed.

Article 7. Effective Date

1. This Joint Circular shall take effect from February 13, 2014, and replace Joint Circular No. 41/2007/TTLT-BTC-BCA dated April 24, 2007, of the Ministry of Finance and the Ministry of Public Security guiding the implementation of certain provisions of Decree No. 130/2006/NĐ-CP dated November 8, 2006, on the mandatory fire and explosion insurance system.

2. During the implementation process, if any difficulties arise, please reflect them to the Ministry of Finance and the Ministry of Public Security for timely guidance./.