04 main changes in Circular 50/2022/TT-BTC on compulsory insurance in construction investment activities
Law on business insurance
Tokio Marine Insurance Vietnam Co., Ltd would like to highlight 04 main changes in Circular 50/2022/TT-BTC as follows:
Firstly, increase the threshold of construction value that is allowed to negotiate insurance policy wording, terms, premiums, and deductible regarding the compulsory insurance for works during construction time: from the effective date of Circular 50, only construction works with a value of 1,000 billion VND or more will be entitled to such negotiation, instead of the value of 700 billion dongs or more as prescribed in Circular 329/2016/TT-BTC. Moreover, Circular 50 also updates the list of construction works & respective premiums based on the changes under Decree No. 20/2022/ND-CP and removes regulations on compulsory application of insurance surcharges for risks of floods, storms, earthquakes, and subsidence based on different locations.
Secondly, the insurer has the right to increase or decrease the premium by up to 25% premium rate specified in this Circular for all types of insurance specified in the Circular. This can be considered an important point where our Company can offer suitable premium rates for customers who prove themselves at low-risk levels of insured objects.
Thirdly, third-party civil liability insurance becomes compulsory insurance for construction contractors (of all construction works regardless of types or grades), with specific provisions on coverage, exclusions, sum insurance, premiums, and principles of indemnity.
Fourthly, adjust the exclusions towards having a general exclusion for all types of compulsory insurance in construction and supplement separate exclusions suitable for each type of insurance. This is an important note in the process of entering into an Insurance Contract.