Decision No. 504/TC-BH on the issuance of Rules and Premium Scales for Motor Vehicle Insurance

Pursuant to …;

Regarding the issuance of Rules and Premium Rates for Motor Vehicle Insurance

THE MINISTER OF FINANCE

Pursuant to Decree No. 155-HĐBT dated October 15, 1988 of the Council of Ministers stipulating the functions, tasks, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 30-HĐBT dated March 10, 1988 and Directive No. 363/CT dated November 6, 1991 of the Council of Ministers promulgating and implementing the civil liability insurance system for motor vehicle owners;

Pursuant to Decision No. 45-QĐ/TC dated February 2, 1989 of the Minister of Finance promulgating the Charter on the organization and operation of Vietnam General Insurance Corporation;

Pursuant to Decision No. 503/TC-BH dated November 20, 1991 of the Ministry of Finance allowing Vietnam General Insurance Corporation to implement comprehensive motor vehicle insurance;

At the proposal of the General Director of the Vietnam Insurance Corporation,

DECISION:

Article 1. Now hereby issuing along with this Decision the Rules and Premium Rates for Motor Vehicle Insurance.

Article 2.This Decision shall take effect from January 1, 1992. All previous decisions that conflict with this Decision are hereby abolished.

Article 3. The General Directors of Vietnam General Insurance Corporation, the Director of the Ministry of Finance's Office, the Directors of Provincial and Municipal Finance Departments under the Central Government, and the heads of related units are responsible for enforcing this Decision.

                                                                            

ETHICAL RULES

MOTOR VEHICLE INSURANCE

(Issued along with Decision No. 504/TC-BH dated
November 20, 1991 of the Minister of Finance)

Based on the owner's request and payment of insurance premiums as prescribed, Vietnam General Insurance Corporation (referred to as BAOVIET) will provide the following types of insurance coverage:

PART I
MOTOR VEHICLE DAMAGE INSURANCE

Scope of insurance: With this type of insurance, BAOVIET will compensate the owner for physical damage to the insured vehicle occurring in the following circumstances:

1. Accidents caused by collision or overturning.

2. Fire, explosion, storm, flood, lightning, earthquake, hail.

3. Total theft of the vehicle.

4. Accidents caused by other unexpected risks.

In addition, BAOVIET will cover necessary and reasonable expenses aimed at:

a. Preventing or limiting additional losses when the vehicle is involved in an accident.

b. Transporting the damaged vehicle to the nearest repair location or ensuring its safety.

c. Appraising losses if they fall within the scope of insurance responsibility.

However, in all cases, the total amount of compensation shall not exceed the sum insured stated on the insurance certificate.

Not covered: BAOVIET will not be liable for compensating physical damage to the vehicle arising from the following causes:

1. Natural wear and tear. Gradual decline in quality, defects or additional damage due to repairs.

2. Damage to electrical systems or machinery parts, including radio receivers, air conditioning, tires, which are not caused by accidents.

3. Theft of parts of the vehicle.

4. Intentional acts of sabotage by the owner or driver.

Provisions applicable to Part I (Motor Vehicle Damage Insurance):

1. The value of the vehicle for insurance purposes shall be agreed upon between BAOVIET and the owner based on the actual value at the time of joining the insurance.

2. If the owner requests cancellation of the insurance contract before the expiration date, they must notify BAOVIET ten days in advance. BAOVIET will refund 90% of the premium for the remaining period. If the insured vehicle has been involved in an accident and compensated by BAOVIET prior to cancellation, the owner will not be entitled to a refund of the premium for the remaining period.

3. Accident appraisal: For accidents estimated at 500,000 dong or more, BAOVIET will conduct an appraisal with the presence of the owner to determine the cause and extent of the damage. In case both parties cannot reach an agreement, they will select a professional technical appraiser to conduct the appraisal. For minor accidents (under 500,000 dong) without conditions for appraisal or traffic police reports, the owner must report the accident details truthfully and provide full documentation for BAOVIET to consider compensation.

4. In case of theft, the owner or driver must immediately report to the nearest police station, BAOVIET office, and local authorities where the vehicle was stolen to establish a record and develop a plan to investigate and handle the incident. Within five days from the date of theft, the owner must confirm in writing to BAOVIET.

5. Compensation for partial loss:

a. When the insured vehicle suffers partial loss, BAOVIET will compensate the owner up to the maximum amount not exceeding the percentage of the part's value relative to the total value of the vehicle and the ratio between the insurance amount and the actual value of the vehicle (with a table of component ratios attached).

b. During the repair process, if new parts need to be replaced, BAOVIET will only compensate the actual value of the part before the accident occurred and according to the ratio between the insurance amount and the actual value of the part.

c. BAOVIET will fully cover the cost of repainting the vehicle if over 50% of the paint area is damaged by the accident.

6. Compensation for total actual or estimated loss:

a. If the insurance amount equals the actual value of the vehicle, BAOVIET will compensate the owner the full insurance amount stated on the insurance certificate.

b. If the insured vehicle is valued below its actual value, BAOVIET will compensate the loss according to the ratio between the insurance amount and the actual value of the vehicle at the time of insurance.

c. If the insured vehicle is valued above its actual value, BAOVIET will compensate the actual value of the vehicle at the time of the accident.

d. When the insured vehicle suffers total loss and BAOVIET has compensated the owner, BAOVIET has the right to recover or dispose of the vehicle. If the vehicle is insured below its value, BAOVIET will recover the remaining value (the wrecked vehicle according to the ratio between the insurance amount and the actual value of the vehicle).

e. If the motor vehicle is missing or lost for more than two months, BAOVIET will compensate the owner the full insurance amount stated on the insurance certificate. If the vehicle is found after compensation, it will belong to BAOVIET.

7. BAOVIET applies a deductible-free compensation limit for estimated losses up to 100,000 dong.

8. When requesting compensation, the owner must provide BAOVIET with the following documents:

Claim form,

Copy of the insurance certificate,

Inspection report of the vehicle,

Documents and invoices related to repairs or purchases of new vehicles, - Report on theft or disappearance of the vehicle (in cases of theft or disappearance),

Documents related to third party liability, if any.

9. The period for claiming compensation is four months from the date of the accident.

PART II
MOTOR VEHICLE THIRD PARTY CIVIL LIABILITY INSURANCE
OF THE VEHICLE OWNER AGAINST THIRD PARTIES

(Compulsory insurance under Decree No. 30-HĐBT dated March 10, 1988 of the Council of Ministers).

Scope of insurance: Depending on the limit of liability, BAOVIET shall be responsible for compensating losses caused by the use of motor vehicles owned by the vehicle owner to third parties, including:

1. Losses to persons.

2. Losses to property.

In addition, BAOVIET will pay necessary and reasonable expenses related to the accident (if any). In all cases, the total amount of compensation shall not exceed the limit of liability recorded on the insurance certificate.

Third parties here do not include passengers present in the vehicle and their belongings.

Exclusions from insurance liability:

BAOVIET shall not be liable for compensation for losses to:

1. Personal effects, luggage, goods, and property carried on the vehicle.

2. Drivers, passengers, and other persons present in the vehicle.

3. Persons whom the driver is required to support such as parents, spouse, and children.

4. BAOVIET shall not be liable for compensation in cases where the vehicle owner (driver) causes an accident and flees to avoid responsibility towards the victim.

Provisions applicable to Part II (Regarding civil liability insurance of the vehicle owner).

1. Insurance amount: The vehicle owner is responsible for participating in insurance according to the minimum liability level specified in the fee schedule issued by the Ministry of Finance.

Additionally, the vehicle owner may participate in insurance above the minimum liability level if needed.

2. When the vehicle is involved in an accident within the scope of insurance, BAOVIET and relevant sectors (Police, Courts, Public Prosecution Service) shall participate in negotiations and mediation for civil compensation. If civil compensation must be resolved at the People's Court, BAOVIET shall participate as an interested party.

3. When requesting compensation, the vehicle owner is responsible for transferring all claims from the aggrieved party and relevant documents and papers related to the accident to BAOVIET, including:

a. Accident investigation and handling documents:

The accident report of the vehicle owner.

On-site inspection report.

Vehicle and damaged property inspection report.

Investigation conclusion report (if available).

Mediation report (in case of mediation).

Court decision (if available).

b. Invoices and documents serving as the basis for compensation:

Personal losses include medical bills, prosthetic limb and artificial eye invoices, transportation fees, funeral expenses, certificates from local authorities or the workplace of the aggrieved party, income certification of the victim, and other related documents.

Property losses: invoices and documents related to repairs or purchases of damaged property.

c. Documents related to third party liability (if any).

4. The period for claiming compensation is six months from the date of the accident. In cases where the accident cannot be negotiated and must be resolved at the People's Court, it is seven days from the date the judgment becomes effective.

Provisions applicable to both Parts I and II:

1. The insurance application form of the vehicle owner and the insurance certificate issued by BAOVIET to the vehicle owner shall be considered as the insurance contract and regulated by these Rules.

2. Insurance premiums are calculated based on the fee schedule issued by the Ministry of Finance.

3. BAOVIET will only issue an insurance certificate when the vehicle owner has paid the insurance premium.

4. The validity of the insurance begins and ends as stated on the insurance certificate.

5. While the vehicle is in operation, the driver must carry the insurance certificate and present it upon request by authorized agencies.

6. During the insurance period, if there is a change in ownership of the vehicle, the insurance benefits remain valid for the new owner. If the previous owner does not transfer the insurance benefits to the new owner, BAOVIET will refund the premium to the previous owner and process the new owner according to the short-term fee schedule.

7. In the event of an accident, the vehicle owner (or driver) must take every effort to rescue victims, minimize damage, and immediately report to the nearest police station and BAOVIET for cooperation in resolving the aftermath of the accident. Within five days from the date of the accident, the vehicle owner must confirm in writing and send it to BAOVIET.

The vehicle owner may not move, dismantle, or repair the vehicle without BAOVIET's consent. Exceptions apply if such actions are necessary to ensure the safety of the vehicle or to comply with directives from authorized agencies (Traffic Police, Local Authorities).

8. In cases involving third-party liability, the vehicle owner must retain the right to claim and transfer the right to seek compensation to BAOVIET, along with all necessary files and documents. If the vehicle owner fails to comply with the above provisions, BAOVIET may refuse part or all of the compensation amount.

9. In cases of disputes between the vehicle owner and BAOVIET that cannot be resolved through negotiation, they shall be referred to the People's Court or Economic Arbitration for resolution.

All disputes related to these Rules shall be resolved in accordance with the laws of the Socialist Republic of Vietnam.

Exclusions applicable to both Parts I and II:

BAOVIET shall not be liable for compensation for losses occurring due to:

1. Vehicles not meeting technical conditions for circulation as stipulated in the Road Traffic Safety Regulations of the Ministry of Transport and the Ministry of Home Affairs.

2. Violations of the Road Traffic Regulations by the vehicle owner (driver) such as:

Lack of driving permit,

Driver lacking a valid license,

Driving under the influence of alcohol, drugs, or other stimulants,

Illegally transporting flammable or explosive materials,

Overloading or exceeding the number of passengers allowed.

Driving on prohibited roads or at night without lights,

Vehicles with right-hand steering,

3. Vehicles used for training, racing, or testing after repairs.

4. Indirect damages such as those caused by the disruption of production and business operations or the reduction in the commercial value of damaged property due to the accident involving the vehicle.

5. Damages caused by war.

6. Accidents occurring outside the territory of the Socialist Republic of Vietnam, except where there are separate agreements./.