Circular No. 219/2010/TT-BTC guides criteria for determining insurance organizations with credibility in the maritime sector as stipulated in the Maritime Vessel Seizure Procedures Ordinance.

CIRCULAR

Guidelines on criteria for determining insurance organizations with credibility in the maritime sector

as stipulated in the Maritime Ship Arrest Procedures Ordinance

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Pursuant to the Insurance Business Law No. 24/2000/QH10 dated December 9, 2000;

Pursuant to the Maritime Ship Arrest Procedures Ordinance of the Standing Committee of the National Assembly No. 05/2008/NQ-UBTVQH12 dated August 27, 2008;

Pursuant to Decree No. 46/2007/NĐ-CP dated March 27, 2007 of the Government detailing financial regulations for insurance enterprises and insurance brokerage enterprises;

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;

Pursuant to Decree No. 57/2010/NĐ-CP dated May 25, 2010 of the Government detailing and guiding the implementation of the Maritime Ship Arrest Procedures Ordinance;

Pursuant to the guidance of the Prime Minister in Circular No. 2068/TTg-PL dated November 2, 2009 of the Government Office regarding the construction of guiding documents for implementing the Maritime Ship Arrest Procedures Ordinance;

The Ministry of Finance issues guidelines on criteria for determining insurance organizations with credibility in the maritime sector as stipulated in the Maritime Ship Arrest Procedures Ordinance as follows:

Article 1. Scope of Regulation

This Circular stipulates criteria for determining insurance organizations with credibility for insurance enterprises established and operating in Vietnam that are permitted to provide guarantees for performance or issue guarantee letters in cases where ships are arrested on the territory of the Socialist Republic of Vietnam.

Article 2. Applicability

This Circular applies to insurance enterprises established and operating in Vietnam, domestic and foreign organizations and individuals related to ships arrested on the territory of the Socialist Republic of Vietnam.

Article 3. Guarantee for Performance and Issuance of Guarantee Letters

2. When performing a guarantee or issuing a guarantee letter, the guarantor or issuer must obtain approval in writing from the court that issued the ship detention decision.

A Vietnamese insurance enterprise shall be recognized as an insurance organization with credibility in the maritime sector if it meets the following criteria:

1. The subscribed capital of the insurance enterprise prior to the announcement of the list of insurance organizations with credibility in the maritime sector reaches 300 billion VND or more.

2. The solvency margin of the insurance enterprise prior to the announcement of the list of insurance organizations with credibility in the maritime sector is not less than the minimum solvency margin. The minimum solvency margin for non-life insurance enterprises is the larger of the two calculated results:

- 25% of the total premiums retained at the time of calculating the solvency margin;

- 12.5% of the total original premiums and reinsurance premiums received at the time of calculating the solvency margin.

The solvency margin of an insurance enterprise is the difference between the value of assets and liabilities of the insurance enterprise at the time of calculating the solvency margin. The liquidity of assets when calculating the solvency margin is determined according to the guidance provided in Clause 4, Section V of Circular No. 156/2007/TT-BTC dated December 20, 2007 of the Ministry of Finance guiding the implementation of Decree No. 46/2007/NĐ-CP dated March 27, 2007 of the Government detailing financial regulations for insurance enterprises and insurance brokerage enterprises.

3. The head of the cargo transportation insurance business department or the ship hull and liability insurance business department or the marine insurance business department must have at least three years of direct experience working in the field they are responsible for or hold a degree or training certificate in the field they are responsible for.

Article 5. Effectiveness and Responsibility for Implementation

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

3. Ministries, ministerial-level agencies, government agencies, provincial People's Committees, cities directly under the Central Government, insurance enterprises, relevant organizations, and individuals are responsible for implementing this Circular.

4. During the implementation process, if there are any difficulties, they should be promptly reflected to the Ministry of Finance for study and resolution./.