..:: Mandatory insurances in Vietnam ::..

Mandatory insurances in Vietnam

Legal Blog

Mandatory insurance refers to a particular type of which insurance conditions, premium rates, the minimum sum insured that policyholder and the insurance enterprises are obliged to perform. According to Article 8 of the current Law on Insurance Business, mandatory insurance is only applicable to certain types of insurance to protect public interests and social safety.

Also, under this law, there are four main groups of mandatory insurance, including:

a) Motor vehicle owner's civil liability insurance (detailed in Circular 22/2016 / TT-BTC), aviation carrier's civil liability insurance for passengers;

b) Professional liability insurance for legal consultancy activities;

c) Professional liability insurance of insurance brokers;

d) Fire and explosion insurance (detailed in Decree 23/2019 / ND-CP).

Recently, the 2019 Law on amending and supplementing the Law on Insurance Business also supplemented one more type of mandatory insurance: for the provision of Insurance Auxiliary Services.

However, the above-mentioned list of the Law on Insurance is considered insufficient, since it has not considered other types of mandatory insurances that are mentioned in many specialized laws and regulations, in particular:

Subject	Mandatory insurance	Legal sources
Vietnamese enterprises and cooperatives, and foreign enterprises investing in Vietnam which may only conduct international multimodaltransport business.	Multi-modal transport professional liability insurance	Article 5 - Decree 87/2009/ND-CP (amended by Decree 89/2011 / ND-CP and Decree 144/2018 / ND-CP) on multi-modal transport
Vehicle owner of inland waterway passenger transportation business	Vehicle owner's civil liability insurance for passengers and third parties	Article 77- The 2014 Law on Inland Waterway Traffic (accordingly, the insurance conditions and premiums shall comply with the Law on Insurance Business)
Owners of ship exclusively used to transport petroleum, petroleum products or other dangerous goods	Shipowners' civil liability insurance for environmental pollution when operating in seaport waters and Vietnamese sea.	Article 105- Maritime Code
Medical examination and treatment organizations and practitioners	Liability insurance in medical examination and treatment	Article 78- Law on Medical Examination and Treatment 2009 and Article 4-9, Decree 102/2011 / CP
Investors	Construction insurance during the construction period	Decree 119/2015 / CP & Circular 329/2016 / TT-BTC on mandatory insurance in construction investment
Consultancy contractors	Professional liability insurance for construction investment consultancy
Construction contractors	Insurance for on-site-workers
Auditing firms, branches of foreign auditing firms in Vietnam	Professional liability insurance for practicing auditors	Article 29.5- Law on Independent Audit 2011
Domestic law firms; Foreign law firms & its branches	Professional liability insurance for lawyers	Article 40 & 73.2 – Law on Lawyers
Price appraisal enterprises	Professional liability insurance for price appraisal	Article 42- Law on Prices 2012 & Article 6- Circular 38/2014 / TT-BTC
Securities Company	Professional liability insurance for securities trading	Article 71.7- Securities Law 2010 (amended and supplemented in 2018)
Notary public	Professional liability insurance for practicing notaries	Article 37- Law on Notarization 2014 & Articles 19 to 22- Decree 29/2015 / CP
Organizations and individuals engaged in production, business, and service activities that pose a risk of great damage to the environment, including a) Oil and gas activities, ncluding the search, exploration, field development and oil and gas extraction, and other activities directly serving these activities; b) Producing and trading chemicals, petroleum; c) Using specialized ships to transport petroleum, petroleum products or other dangerous oods while operating within the seaport waters and Vietnamese waters; d) Storing, transporting, and treating hazardous waste; transport of dangerous goods.	Environmental liability insurance	Article 167- Law on environmental protection 2014 & Article 31-32 Decree 19/2015 / CP (amended and supplemented under Decree 40/2019/CP)
Organizations and individuals conducting radiation work	Professional insurance, civil liability insurance; or	Article 90- Law on Atomic Energy 2008 & Article 13- Decree 07/2010 / CP
Organizations and individuals licensed to carry out radiation work (with a potential risk of causing great damage) a) Operation of research nuclear reactors and nuclear power plants; b) Production and processing of radioactive substances; c) Mining and processing radioactive ores; d) Treating radioactive wastes, used radioactive sources, and used nuclear fuel.	Environmental liability insurance

It’s necessary to note that of all the above-mentioned categories, only mandatory insurance in construction investment has been instructed in detailed documents by the Ministry of Finance on insurance conditions, premium rate, the minimum amount of insurance; professional liability insurance for practicing notaries is specified in the relevant Decree on coverage, insurance conditions and minimum premium; and liability insurance in medical examination and treatment as specified in the relevant Decree on scope, level of insurance liability, principles of indemnity, compensation dossier. The remaining categories haven’t had detailed instructions.