Laws of Vietnam

DECIDES:

Article 1.- To promulgate together with this Decision:

- The accident insurance regulations, premium and indemnity index for accidents of crew members on board fishing means.

- The insurance regulations and premium index against all risks for ship hulls of offshore fishing means.

Article 2.- Where the average indemnity rate of the three preceeding years is smaller (or larger) than 60%, the insurer may reduce (or increase) the insurance premium which, however, must not exceed 15% of the insurance premium level promulgated together with this Decision.

Article 3.- This Decision takes effect 15 days after its signing

Article 4.- The director of the Banks’ Finance and Financial Institutions Department, the director of the Finance Ministry’s Office and heads of the concerned units shall have to inspect and supervise the implementation of this Decision.

For the Finance Minister
Vice Minister
TRAN VAN TA

Chapter I

GENERAL PROVISIONS

Article 1.- Insurance subjects and scope

The insurer and ship/boat owners having means licensed for offshore fishing shall have to comply with the regime of compulsory insurance for the ship/boat hulls with regard to offshore fishing means.

The insurance scope covers the ship/boat hull (including shell, engines, maritime equipment, machinery and equipment used for marine product exploitation).

Article 2.- Insurance contract:

The insurance certificate granted by the insurer at the request of the insurant is the evidence of the conclusion of an insurance contract between the insurant and the insurer.

Article 3.- The effect of the insurance contract and the extension of the insurance contract:

1. The effect of an insurance contract: An insurance contract shall take effect and terminate as prescribed in the insurance certificate. The insurer shall issue the insurance certificate when the insurant has paid the insurance premium fully and on time as prescribed (except otherwise agreed upon). Besides, the insurance contract shall automatically terminate immediately after one of the following circumstances arises:

a/ Changing the ship/boat registry without notifying the insurer thereof in writing.

b/ Ship or boat is suspended from operation or its operation permit is withdrawn or expires.

c/ Ship or boat has changed hands (except where the ship/boat owner sends written notice in advance and such is approved by the insurer).

d/ The certificate of ship/boat’s operation qualifications and grade has been invalidated or expired.

Particularly where the operation permits and registration papers of ships and/or boats have expired while the ships and/or boats are operating on the sea, the termination of insurance effect shall be postponed till such ships and/or boats arrive at the first port if their itineraries have been prolonged reasonably and with advance notices to the insurer.

2. Extension of insurance contracts: When an insurance certificate has expired while a ship or boat is still on high sea or in distress or stops by somewhere to shelter, such ship or boat may continue to be insured till it safely anchors at port if the insurer receives in time the notice applying for the extension of the insurance contract and the additional insurance premium is paid at the insurer’s request.

Article 4.- Insurance liabilities:

The insurer shall have to indemnify for:

1. Full or partial damage caused directly to the hulls of insured ships and boats by the following incidents:

a/ Collision with vessels, aircraft, transport means ashore or in water.

b/ Wreckage, aground running, collision against rocks, submarine or floating objects, afloat or fixed, bridges, ferries, dyke works, sluices, embankments, piers.

c/ Fire and/or explosion on board the ships or boats or in other places, causing damage to ships and/or boats.

d/ Throwing property from ships or boats in case of necessity and reasonability.

e/ Missing.

f/ Earthquakes, landslides, volcanic emission.

g/ Storms, tidal waves, whirlwinds, hails or thunderbolts.

h/ Accidents happening during the process of loading, unloading and/or relocation of aquatic products, goods, raw materials or fuels when ships are anchoring in wharves or ports or while ships/boats are anchoring, put on dry dock or being repaired in yards.

i/ Boilers explosion, broken mechanical axis or damage due to hidden defects which can not be detected through ordinary inspection or expertise.

k/ Mistakes committed by ship masters, officers, seamen, pilots or repairers on the condition that the repairers are not the insurants.

2. The necessary and reasonable expenses for:

a/ Damage limitation, support or rescue; litigation expenses already accepted in advance by the insurer;

b/ Examination and expertise of damage and/or losses covered by the insurance;

c/ Contributions to expenses for common damage;

d/ Examination of ship’s or boat’s bottom after it ran aground even in case of failure to detect any damage.

3. Broadening the insurance scope:

The insurer shall also have to compensate for damage caused to insured ships and boats in the following cases:

a/ Towing and assisting other ships and/or boats in distress. The material damage and losses incurred during this period shall be covered by the insurance only for the repair which the insurant cannot fully recovered as the party(ies) in distress is incapable of making repayment.

b/ Insured ships or boats collide with ships or boats of the same owners or under the same management or with similar ships or boats on rescue mission.

Article 5.- Insurance exclusion:

A. The insurer shall not have to indemnify for damage caused to the ship/boat hulls in the following cases:

1. Ships and boats are not qualified for operation, have no operation licenses or operate outside the prescribed scope.

2. The insurant or such executors as agents, representatives or ship masters, officers and seamen act deliberately.

3. The ban orders issued by authorities have been violated or illegal business activities have been carried out.

4. The State’s regulations on communication and transport safety have been violated such as:

- Ship masters and/or chief engineers have no licenses as prescribed.

- Crew members get intoxicated with alcohol, beer, narcotics or similar stimulants.

- Ships and/or boats are not sufficiently equipped with signals as prescribed when in operation or anchorage.

- Ships and/or boats move into prohibited lanes or waters.

5. The shells, engines or equipment of ships or boats are too outdated or subject to natural wear beyond the level prescribed by the competent State bodies.

6. Ships or boats run aground due to tides or high and low ebbs while in anchorage.

7. While anchoring in wharves, ports or any water areas the ships or boats are not firmly moored and tied up or crew members neglect their duty.

B. The insurer shall neither accept the insurance nor bear responsibility for the following relevant expenses even though they have resulted from the insured risks:

1. Expenses related to the delayed itineraries of insured ships or boats, the marine products or goods have reduced in their values or lost their outlets, or expenses related to business activities of the insured ships or boats.

2. All expenses related to:

a/ Scraping ship worms, painting sides or bottoms of ships or boats (excluding the expenses for cleaning the surface and painting the replacing iron sheets, which are covered by the insurance).

b/ Wages and wage allowances or subsidies for the crew members, except for case of general average.

c/ Taking ships and/or boats to repair places except where such is made at the written request of the insurer.

d/ Working trip allowances or relevant expenses paid by the insurant or their authorized persons for collection of dossiers on complaints or settlement of incidents ,except for the insured expenses under Clause 2, Article 4 above.

e/ Transport freight or ship rentals.

C. The insurer shall neither undertake the insurance (except otherwise agreed in writing) nor compensate for damage or losses or expenses incurred due to:

1. War risks or war-like risks.

2. Ships or boats have been robbed or seized at any places for any reasons.

3. Ships and/or boats requisitioned or used for military purposes.

4. Acts of sabotage or terrorism of political nature.

5. Explosions caused by any weapons or any explosives.

6. Atomic risks.

Article 6.- Insurance premium and time limits for premium payment:

1. Insurance premium:

The insurer and the insurant shall have to effect the insurance according to the insurance premium index issued together with the Finance Minister’s Decision No.128/1999/QD-BTC of October 25, 1999.

Where the insurants request to expand the insurance scope to other additional risks, the insurer may calculate surcharges corresponding to such insured risks.

2. The time limit for insurance premium payment shall be agreed upon by the two parties in the insurance contracts. Where an insurance contract is still effective and the insurance premium payment period is not mature while the ship or boat gets damaged totally, the insurant shall have to pay the remaining insurance premium amount to the insurer within 15 (fifteen) days from the date the insurant notifies in writing the ship/boat’s total damage to the insurer.

Article 7.- Insurance premium reimbursement:

Where the insurant requests in writing the cancellation of the insurance contract and notifies such to the insurer 07 (seven) days in advance, the insurer shall have to refund 80% of the paid insurance premium amount corresponding to the insurance contract cancellation duration, except for cases where the request for insurance cancellation related to ship and/or boat is made while the insurance contract is still effective, the insurance premium shall not be refunded. The premium reimbursement is effected right after the cancellation of the insurance contract.

Where ships and/or boats cease operation for repair or moor in harbors or sheltering places for 30 consecutive days or more with the consent of the insurer, the insurer shall have to refund 50% of the paid premium amount for the period such ships and/or boats cease their operation at the end of the insurance year. If ships and/or boats get totally damaged, the insurance premium for the ships and/or boats’ non-operation period shall not be refunded.

Article 8.- Responsibilities of the insurant:

1. When requesting insurance, the insurant shall have to declare fully and honestly the details written in the insurance request and send it to the insurer 03 (three) days before the insurance contract takes effect.

2. When accident occurs, the insurant shall have the responsibility to:

2.1. Promptly apply all necessary measures to rescue and protect people, means and property with a view to preventing and limiting damage.

2.2 Immediately report to the nearest local administration for making record thereon as prescribed and promptly notify such to the insurer or their nearest representative.

2.3. Complete all necessary procedures for reserving the right to petitions and transfer the right to claim indemnity to the insurer.

2.4. Assist the insurer’s experts in fulfilling their tasks of expertise and quickly settle the accident consequences.

If the insurant fails to fulfill the above-prescribed responsibilities, the insurer may refuse part or whole of the indemnity corresponding to the damage caused by the insurant’s faults, except where the insurant has plausible reasons for not being able to fulfill the above responsibilities.

Article 9.- Responsibilities of the insurer:

1. The insurer shall have the responsibility to:

- Provide the insurant with the Rules and Premium Index relating to the ship/boat hull insurance.

- Guide and create favorable conditions for ship/boat owners to participate in the insurance.

2. When the indemnity dossier is complete and valid, the insurer shall have to consider and make the indemnities within the time limits prescribed at Point 3, Article 17 below.

Article 10.- Overlapping insurance:

In case of overlapping insurance for the same ship or boat, the insurant shall have to immediately notify the insurer of the names of other insures and the premium amount under each insurance contract already concluded, except otherwise provided for by the insurance contract.

In case of overlapping insurance, the responsibility of each insurer shall be determined according to ratio between the premium amount of each insurer and the total premium amount of all insurers and the insurers shall only be accountable for the insured value. The insurant shall not be entitled to reclaim the paid premium.

Chapter II

SPECIFIC PROVISIONS

Article 11.- Above- and under-value insurance indemnities

1. The above-value insurance means the insurance in which the insurant bought the insurance higher than the market prices calculated in money or substitute cost of the insured property at the time of concluding the insurance contract.

Where the above-value insurance is made due to acts of deception or deliberately making untruthful declaration by the insurant when concluding the insurance contract, the insurer may cancel the insurance contract and claim compensation for damage (if any) and the insurant may not reclaim the premium amount already paid for the excess value.

Where the above-value insurance is made due to unintentional faults of the insurant, the liability limit to be determined shall be the actual value of the insured object and the insurant is not entitled to reclaim the insurance premium already paid for the excess value.

2. The under-value insurance means the insurance in which the insurance premium is lower than the insured value.

In case of under-value insurance, the insurer shall be accountable for damage falling under the insured liability according to the ratio between premium amount and the insured value.

Article 12.- Total loss caused to ship/boat hulls:

1. The total loss caused to ship/boat hull prescribed in this Regulation includes the total actual and presumed loss:

a) The actual total loss means the loss caused when a ship or boat is completely and irreparably damaged or a ship or boat has been missing for more than 03(three) months without any traces left.

b) The presumed total loss means the loss caused when a ship or boat is damaged and deemed it unavoidable of the total loss, or the total expense for repair and restoration, salvage and rescue and others exceed the insured value. For this case, if the insurant requests the abandonment of the ship/boat, he/she shall have to send a written notice thereon to the insurer. If the abandonment is not accepted, the insurer shall indemnify for the loss caused to the part(s) under the insured liability.

2. After compensating for the total loss to the ship/boat hull, the insurer shall be entitled to own, recover and handle such ship/boat or shall not reclaim rights and obligations regarding the ship wreckage as prescribed by law.

Article 13.- Partial loss to ship/boat hull:

1. In all cases, except otherwise agreed in writing, the insurer shall have to pay the indemnity to each separate value of the repaired or replaced part. After making indemnity for the replaced part, the insurer shall be entitled to own and recover such part.

2. In all cases, if a ship or boat gets partially damaged and not yet repaired then the total damage happens while the insurance contract is still valid, the insurer shall only have to indemnify for the total damage.

Article 14.- Deduction level:

a/ The deduction rate shall be 2% of the indemnity amount, at least equal to 100,000 VNdong/case.

b/ Complaints about losses under the above-mentioned deduction rate shall not fall under the insurer’s responsibility.

c/ Where damage is caused to the hull, shell, engines and/or equipment of a ship or boat partly or fully due to the faults of the ship master, officers and/or sailors, in addition to the deduction rate inscribed on the insurance certificate, the insurer may deduct 10% more from the indemnity amount.

This Article 14 shall not apply to the total loss.

Article 15.- Evaluation of damage:

When receiving the damage notices and written requests for evaluation from the insurants or their representatives, the insurers or their authorized persons shall conduct the evaluation on spot to the witness of the ship masters, relevant witnesses and representatives of the ship owners in order to determine the causes and levels of damage and loss.

The evaluation cost shall be paid by the evaluation requester, which shall be refunded after the indemnity is made if the insurer is responsible for the damage.

Where the insurants disagree with the evaluation results determined by the insurers or their authorized persons, the two sides shall agree on the selection of an independent expert for the evaluation. The conclusion made by the independent expert shall be considered the final decision. Where the conclusion of the independent expert is different from that of the insurer’s expert, the insurer shall have to bear the evaluation cost. Where the conclusion of the independent expert coincides with that of the insurer’s expert, the insurant shall have to bear the evaluation cost.

Article 16.- Indemnity dossiers

An indemnity dossier shall include the following papers:

1. The indemnity complaint letter of the insurant.

2. The insurance certificate.

3. The maritime petition, the report on accident or losses with certification by the authorities of the locality where the accident occurred or the first port of arrival ( if the accident occurred when the ship or boat is enroute).

4. The record on evaluation by the insurer or its authorized person or the record on the independent evaluation agreed upon by the involved parties.

5. The written certification of the ship/ boat loss by the competent body (in cases where the ship/boat is missing).

6. The accident record made by the local authorities or police (in case the accident is related to the physical body, ship/boat and property of the third person).

7. Invoices, vouchers related to expenses claimed for indemnity.

8. The letter of complaint and all documents, vouchers related to the third person ( if any).

9. Other relevant vouchers (extract of maritime diary, engine diary, weather diary, itinerary book, permit for movement of marine product exploiting forces, registration papers, crew members’ diplomas or other papers of the ship…, depending on each specific case).

After the insurant fully submits the above-mentioned complaint dossiers to the insurer, if within the subsequent 30 days the insurer demands nothing else, such complaint dossier is considered complete and valid.

Article 17.- Time limits for indemnity request, payment and complaint:

1. The time limit for indemnity request made by the insurant shall be 01 (one) year from the date the accident occurs, except for case of delay due to objective and force majeure causes.

2. The time limit for general loss complaint is stipulated as 02(two) years from the date the accident occurs.

3. The insurer shall have to pay the indemnity to the insurant or his/her lawful heirs within 60 (sixty) days from the date of receiving the full and valid complaint dossiers from the insurant.

Chapter III

SETTLEMENT OF DISPUTES

Article 18.- Settlement of disputes:

If disputes relating to insurance contracts cannot be settled through negotiations between the involved parties, they shall be brought to courts in Vietnam for settlement.

For the Finance Minister
Vice Minister
TRAN VAN TA

Insurance premium (without value added tax) calculated in percentage (%) of the value of ship/boat hull.

1. Ships/boats with shells made of wood or ferro-concrete:

From 90 CV to 99 CV: 2.30%

From 100 CV to 124 CV: 1.90%

From 125 CV to 134 CV: 1.60%

From 135 CV to 224 CV: 1.40%

From 225 CV to 249 CV: 1.25%

From 250 CV to 399 CV: 1.15%

From 400 CV to 599 CV: 1.00%

From 600 CV to 999 CV: 0.80%

From 1000 CV and over: 0.57%

2. Ships/boats with shells made of iron, steel, duralumin or composite plastic:

From 90 CV to 99 CV: 2.00%

From 100 CV to 124 CV: 1.70%

From 125 CV to 134 CV: 1.40%

From 135 CV to 224 CV: 1.20%

From 225 CV to 249 CV: 1.10%

From 250 CV to 399 CV: 1.00%

From 400 CV to 599 CV: 0.90%

From 600 CV to 999 CV: 0.70%

From 1000 CV and over: 0.50%

3. The insurance premium rates collected according to ships/boats’ ages:

Under 5 years old: No additional collection

From 6 to 8 years old: An additional collection of 0.30%

From 9 to 11 years old: An additional collection of 0.60%

From 12 to 14 years old: An additional collection of 1.00%

From 15 to 17 years old: An additional collection of 2.00%

Over 17 years old: Further agreed upon if insurance is accepted.

For the Finance Minister
Vice Minister
TRAN VAN TA

Chapter I

GENERAL PROVISIONS

Article 1.- Insurance objects and scope

1. The insurers and crew members working on board fishing means are obliged to implement the regime of compulsory insurance for crew members’ accidents.

2. The insured shall include ship masters, deputy masters, chief engineer, deputy chief engineer, sailors, mechanics, service personnel working on board fishing ships and boats.

3. The insurance scope: Accidents to be insured shall be unexpected accidents which occur in the sea areas of Vietnam, causing death, injury or missing to the insured.

Article 2.- Insurance contracts

The insurance certificates granted by the insurers at the request of the insured are the evidence of the conclusion of insurance contracts between the insured and the insurers.

The crew members’ accident insurance contracts can be signed in the forms of collectives by enterprises, cooperatives, ship/boat units or individuals.

Article 3.- Insurance premium and indemnity

The insurers and the insured shall have to effect insurance according to the insurance premium and indemnity index issued together with Decision No.128/ 1999/QD-BTC of October 25, 1999.

The insurer may negotiate with the insured for higher insurance premium and indemnity or a broader scope of insurance according to the insurance rules, insurance premium and indemnity index, which have been submitted by the insurer and approved by the Finance Ministry.

Article 4.- Effect of insurance contract

An insurance contract shall take effect and terminate according to the provisions in the insurance certificate. The insurer shall grant the insurance certificate after the insured fully pay the insurance premium (except otherwise agreed upon).

Article 5.- Cancellation of contracts

Where the insured request the cancellation of insurance contracts, they shall have to notify such in writing to the insurer 10 (ten) days in advance. The insurer shall have to refund 90% of the insurance premium of the cancellation period to the insured. Where the insured request the cancellation of insurance contracts which are still effective, the insurer shall not have to return the already paid insurance premium.

Article 6.- Responsibility of the insured:

1. When having the need for insurance, the insured shall have to declare fully and honestly the contents stated in the written insurance request.

2. The insured shall have to strictly abide by the rules and labor safety regulations of their units and other requirements on labor protection.

3. When accidents occur, the insured or their competent representatives shall have to report them to the competent State bodies as prescribed and immediately notify and supply all information concerning the accidents to the nearest insurer.

4. Where the insured or beneficiaries are dishonest in implementing the provisions in this rules, the insurer may refuse part or whole of the indemnity corresponding to the damage caused due to the faults of the insured or beneficiaries.

Article 7.- Responsibility of the insurer

1. The insurer shall have the responsibility to:

- Provide the crew members with the insurance rules, premium and indemnity index relating to the crew members’ accident insurance;

- Guide and create favorable conditions for crew members to participate in the insurance.

2. When the dossiers on insurance payments are complete and valid, the insurer shall have to consider and settle them within the time limits prescribed for insurance payment at Point 1, Article 11 below.

Chapter II

SPECIFIC PROVISIONS

Article 8.- Insurance indemnity repayment:

1. Within the insurance indemnity inscribed in the insurance certificate, the insurer shall have to repay the insurance indemnity if the insured die or get injured due to accidents. The maximum level of insurance indemnity repayment in case of death or complete loss of working capacity shall be the insurance indemnity inscribed in the insurance certificate.

2. Where the insured suffer from injury due to accidents, the insurance indemnity payment level shall comply with the Index of injury insurance indemnity payment applicable to human insurance operations, issued together with Decision No.05/ TC/BH of January 2, 1993 of the Finance Minister.

The total of all expenses prescribed at this Article must, in any circumstance, not exceed the insurance indemnity inscribed in the insurance certificate.

3. In cases where the insured are missing while on duty on the sea, who can not be found though the ship masters and owners have applied all measures to search for and rescue them but in vain, and who are believed missing as fully evidenced by documents, the level of insurance indemnity payment shall be the same as for case of death. If the insured is still alive after the insurance indemnity payment is made, the beneficiaries shall have to fully repay such insurance indemnity amount to the insurer.

Article 9.- Insurance exclusion:

The insurer shall not pay the insurance indemnities for accidents due to the following direct causes:

1. Acts of deliberately self-injuring including suicide or attempt to commit suicide by the insured in any circumstance, any state.

2. Accidents which have occurred due to the insured’s intoxication of alcohol, beer, drugs and similar stimulants.

3. Ailments or death or injuries caused due ailments.

4. Acts of law offense by the insured;

5. Wars, labor strikes, riots.

Article 10.- Dossiers requesting insurance indemnity payment:

When requesting the insurer to pay insurance indemnity, the insured or the beneficiaries shall have to send to the insurer the following vouchers within 30 (thirty) days from the date the insured recover from illness or die:

1. The written request for insurance indemnity payment;

2. The insurance certificate or extracts (copy) of the list of persons participating in the insurance.

3. The record on the accident with certification by agencies, local authorities of police in the areas where the insured got the accident.

4. Hospitalization certification by medical body (hospital release papers, hospitalization cards and papers related to injury treatment).

5. The death certificate and written certification of the lawful inheritance right ( in case of death).

Where the insured authorize other persons to receive the insurance money, there must be lawful authorization letters.

Article 11.- Time limits for insurance indemnity payment and complaints thereabout:

1. The insurer shall have to pay the insurance indemnity to the insured or the beneficiaries within 15(fifteen) days after fully receiving the valid papers mentioned above.

In case of refusal to pay insurance indemnity, the insurer shall have to notify the reasons therefor to the insured or the beneficiaries within the above- mentioned time limits.

2. The time limit for complaining about the indemnity payment by the insured or the beneficiaries shall be 60 (sixty) days from the date the insurer make the indemnity payment or refuse to pay the insurance indemnity. Past the above time limit, the complaints shall be invalid.

Chapter III

SETTLEMENT OF DISPUTES

Article 12.- Settlement of disputes

If disputes arising from the insurance contract cannot be settled through negotiations between the concerned parties shall be brought to courts in Vietnam for settlement.

For the Finance Minister
Vice Minister
TRAN VAN TA

1. The insurance indemnity shall be 10 million VND/person/accident.

2. The annual insurance premium shall be 28,000 VND/person.

For the Finance Minister
Vice Minister
TRAN VAN TA