Circular No. 65-TC/DTPT guiding construction project insurance

CIRCULAR

GUIDELINES ON INSURING CONSTRUCTION PROJECTS ISSUED BY THE MINISTRY OF FINANCE NUMBER 65 TC/ĐTPT ON NOVEMBER 2, 1996

Pursuant to the State Budget Law issued on March 20, 1996;
Pursuant to Decree No. 100/CP dated December 18, 1993 of the Government on insurance operations and guiding circulars of the Ministry of Finance;
Pursuant to Decree No. 42/CP dated July 16, 1996 of the Government on the Charter for Investment Management and Construction;
Pursuant to Circular No. 04/TTLB dated September 10, 1996 of the Joint Ministries of Construction, Planning and Investment, and Finance guiding the implementation of the Investment and Construction Management Regulations promulgated together with Decree No. 42/CP dated July 16, 1996 of the Government;
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.

1. When conducting investment and construction, investors of investment projects must purchase construction project insurance from an insurance company permitted to operate in Vietnam. For private residential construction projects, the State encourages the purchase of construction project insurance.

Direct foreign investment projects shall be governed by laws on foreign investment in Vietnam.

Projects using state capital will not be provided state budget funds or preferential state credit for losses within the scope required to be insured under construction project insurance.

2. The cost of construction project insurance is part of the investment capital of the project, included in the approved total estimate (estimate) of the project. In cases where the investor authorizes the contractor to purchase insurance, the insurance premium is included in the value of the contract.

The insurance premium is determined according to the current regulations of the Ministry of Finance and represents the highest rate at which the investor can purchase insurance.

3. Organizations and individuals undertaking construction, consulting, and supply of materials and equipment must purchase insurance for materials and equipment, factory buildings serving construction, work injury insurance, civil liability insurance for third parties, insurance for survey and design products... during the implementation of the project. Insurance premiums are included in production costs.

II. SPECIFIC PROVISIONS

1. Insured Parties

1.1. Investors:

- Projects using state capital.

- Projects of Limited Liability Companies, Joint Stock Companies, and Cooperatives.

- Private investment projects.

1.2. Organizations and individuals related to investment projects:

- Construction consultants.

- Suppliers of materials and equipment.

- Contractors.

2. Types of Insurance:

2.1. Investors must purchase the following types of insurance:

- Construction project insurance during the implementation period (including civil liability towards third parties caused by the construction project) to address unexpected and unforeseeable risks such as fire, earthquake, flood... The insurance premium is included in the value of the project and settled in the other expenses category.

- Insurance for materials and equipment under the management responsibility of the investor during transportation from the place of purchase (receiving goods) to the site of the project and while being stored in warehouses. The insurance premium is included in the price of the materials and equipment.

2.2. Organizations and individuals related to investment projects must purchase the following types of insurance:

- Insurance for assets under their management responsibility such as materials, equipment, factory buildings serving construction...

- Liability insurance including: civil liability insurance towards third parties during construction; work injury insurance for employees of the aforementioned organizations during the insurance period; professional liability insurance for investment and construction consulting organizations.

Insurance premiums are included in the production and business costs of the aforementioned organizations and individuals.

3. Methods of Purchasing Insurance, Payment of Insurance Premiums:

3.1. Rules, terms, insurance premiums: Implemented according to the current regulations of the Ministry of Finance.

3.2. Procedures for purchasing insurance: In the absence of any agreement between the insured party and the insurance company, the insurance procedures shall be applied as follows:

a) For investors: Investors directly or authorize contractors to purchase construction project insurance from an insurance company chosen by the investor. The person purchasing insurance submits the following documents to the insurance company:

- Site plan of the project.

- Summary document on the structure and construction methods of the project.

- Approved total estimate of the project or winning bid price.

- Contract for purchasing materials and equipment.

- Extract of the insurance clause in the construction contract.

- Other necessary documents as required by the insurance rules. Based on the insurance premium estimate, the insurance tariff table, and the above documents, the insurance company calculates the insurance premium and issues an insurance policy to the person purchasing insurance.

b) For organizations and individuals related to investment projects: the person purchasing insurance submits the following documents to the insurance company:

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

- List of workers participating in insurance.

- Estimated value of surrounding assets that may be damaged during construction.

- List of projects completed in the last five years.

- Other necessary documents as required by the insurance rules. The insurance company reviews, evaluates, and sets the insurance premium, issuing an insurance policy to the person purchasing insurance.

3.3. Payment of Insurance Premiums:

- For material and equipment insurance premiums, payment is made fully and on time as stipulated in the insurance policy.

- For construction project insurance, premiums are paid once or multiple times as stipulated in the insurance policy and the approved annual plan.

- For other types of insurance, premiums are paid as stipulated in the insurance policy.

4. Compensation:

- When an incident occurs within the scope of insurance responsibility, the insured party must immediately notify the insurance company and provide detailed written notification within seven days.

- After receiving 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 from the date of issuance and replaces Circular No. 105 TC/ĐT dated December 8, 1994 of the Ministry of Finance.

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