CIRCULAR

ON GUIDELINE FOR IMPLEMENTATION OF A NUMBER OF CERTAIN ARTICLES OF THE GOVERNMENT'S DECREE NO.119/2015/ND-CP DATED NOVEMBER 13, 2015 ON COMPULSORY INSURANCE FOR CONSTRUCTION ACTIVITIES

Pursuant to the Law No. 24/2000/QH10 on Insurance Business;

Pursuant to the Law on amendment and supplement to a number Article of the Law No.61/2010/QH12 on Insurance Business;

Pursuant to the Law No.50/2014/QH13 on Construction;

Pursuant to the Government's Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, rights, responsibilities and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No.119/2015/ND-CP dated November 13, 2015 on compulsory insurance in construction activities;

Upon request of the Director of the Agency for Insurance Supervisory and Management;

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Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidelines for:

1. The policy wording, conditions, schedules of premiums, financial regime and reporting regime for compulsory insurance for construction activities including construction works insurance, professional liability insurance for construction consultants (hereinafter referred to as “professional liability insurance”) and construction workers’ compensation insurance.

2. Implementation of the third-party civil liability insurance.

Article 2. Subjects of application

This Circular applies to:

1. Investors and contractors (if the construction works insurance premium is included in the contract value).

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3. Construction contractors.

4. Non-life insurance enterprises, branches of foreign non-life insurance enterprises (hereinafter referred to as “insurer”) and ceding companies.

5. Other entities related to compulsory insurance for construction activities.

Article 3. Interpretation

For the purpose of this Circular, terms herein shall be construed as follows:

1. Handover means transfer of a construction works as defined in Article 124 of the Law on Construction.

2. Policyholder refers to the following entities:

a) Investors (as for the construction works insurance).

b) Consultancies (as for the professional liability insurance).

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3. Third party (for the professional liability insurance for construction insurance) is the party suffering from bodily injuries or property damage a result of construction design and surveying, except for the insurer, the policyholder and the insured.

4. Occupational disease is defined by Article 143 of the Labor Code.

5. Investor may be an owner or contractor participating in construction investment activities (if the construction works insurance premium is included in the contract value).

6. Project owner is any entity who has capital or mobilizes capital or is designated to directly manage and use a certain amount of capital for construction of a construction works and work item affecting the community safety, or construction works having significant impact on the environment or having particular specifications and being constructed under complicated conditions as stipulated in clause 1 Article 4 of the Government’s Decree No.119/2015/ND-CP dated November 13, 2015 on compulsory insurance for construction activities (hereinafter referred to as "Decree No.119/2015/ND-CP).

7. Construction works in the construction period is the construction works stipulated in clause 10 Article 3 of the Law on Construction

8. Place into service is the process for bringing a construction works into operation.

9. Deductible is a fixed amount or a percentage of an indemnity that the policyholder must bear in each insured event. To be specific:

a) As for the construction works insurance: the deductible specified in item c, point 1, clause I of Annex 7 attached hereto (in case of any construction works prescribed in point a, clause 1 Article 15 hereof) or item c, point 1, clause II of Annex 7 attached hereto (in case of any construction works prescribed in point b, clause 1 Article 15 hereof) shall apply.

b) As for the professional liability insurance: the deductible stipulated in point b clause 1 Annex 8 attached hereto shall apply.

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11. Construction contractor is any entity that meets eligibility requirements for construction and has the capability to operate in construction industry under the construction contract as stipulated in clause 1 of this Article.

12. The insured refers to the following entities:

a) Project owners, construction contractors (both principal contractors and sub-contractors), and other entities whose interests and entitlement are connected with the construction works during the construction period (for the construction works insurance).

b) Consultancies and other entities participating in giving expert advices on construction surveying and design (for the professional liability insurance).

c) Prime construction contractors and their subcontractors (for the construction workers’ compensation insurance)

13. Worker is any entity defined by clause 1 Article 3 of the Labor Code.

14. Occupational accident is defined in Article 142 of the Labor Code.

15. Construction incident is defined in clause 34, Article 3 of the Law on Construction.

Article 4. Policy wording, insuring clauses and schedules of premiums of compulsory insurance for construction activities

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2. Insuring clause is a specific provision in compulsory insurance for construction activities policy, including:

a) Insuring clause on construction works insurance

b) Insuring clauses on professional liability insurance.

c) Insuring clauses on construction workers’ compensation insurance.

3. The schedule of premiums and surcharges shall be specified as follows:

a) As for the construction works insurance: provisions in Annex 7 attached hereto shall apply.

b) As for the professional liability insurance: provisions in Annex 8 attached hereto shall apply

c) As for the construction workers’ compensation insurance: provisions in Annex 7 attached hereto shall apply

4. In addition to purchase of compulsory insurance for construction activities under insuring clauses and at the premiums and minimum sum assured stipulated hereof, the insurer and policyholder shall negotiate to make an expansion to insuring clauses and heighten the sum insured and premiums in the insurance policy in accordance with regulations of laws.

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1. The insurer shall be freed from the liability to indemnify for the following loss:

a) Loss caused by intentional acts. To be specific:

- Loss incurred due to riots, strikes and hostilities

- Loss caused by intentionally illegal acts committed by the policyholder or the insured ( this provision shall not apply to construction workers’ compensation insurance in case any construction worker takes any self-defense act or takes actions to save people, asset or uses stimulants under doctor's prescription).

- Loss caused by the consultants’ errors in design ( this provision shall only apply to construction works insurance).

- Loss caused by consultancy’ intentional acts of selecting untested methods of construction, measurement, calculation and design, and untested materials; or consultancy’ advice on use of asbestos or materials containing asbestos ( this provision shall only apply to the professional liability insurance for consultants).

b) Loss caused by the nature. To be specific:

- Loss due to corrosion, abrasion, redox, rot, hardness (such as rust, scaling and the like), material defects ( this provision shall only apply to construction works specified in point a clause 1 Article 15 hereof).

- Loss due to corrosion, abrasion, redox, and material defects ( this provision shall only apply to the construction works specified in point b clause 1 Article 15 hereof).

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Loss of data, software and computer programs applied to carry out construction survey and design according to the consultancy’s expert advice (this provision shall only apply to the professional liability insurance).

d) Loss dues to catastrophic events:

- Loss caused by wars, terrorism, nuclear reaction, nuclear radiation and radioactive contamination.

- Loss caused by construction survey and design consulting that leads to environment contamination and affects the third party ( this provision shall only apply to the professional liability insurance).

dd) Loss beyond the coverage of the insurance as stipulated in clause 9 Article 3 of the Law on Insurance Business.

2. The insurer shall negotiate with the policyholder and shall specify the Exclusion Clause in the insurance policy in accordance with clause 1 of this Article and other exclusion (if any) of liability for loss prescribed in clause 2 Article 6 of the Decree No.119/2015/ND-CP.

Article 6. Process of conclusion of insurance policies

The compulsory insurance for construction activities policy shall be concluded as follows:

1. Step 1: The policyholder shall provide sufficient necessary information for the insurer:

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- As for the construction works insurance: the form in Annex 1 attached hereto.

- As for professional liability insurance: the form in Annex 2 attached hereto

- As for construction workers’ compensation insurance: the form in Annex 3 attached hereto

b) Provide the insurer with all documents required in the proposal form (if any) upon the insurer’s request.

2. Step 2.According to the proposal form and relevant documents (if any), the insurer shall examine and make risk assessment prior to make a decision on provision of the insurance.

3. Step 3. The insurer and the policyholder shall sign an insurance policy; the insurer shall issue the policyholder a Certificate of insurance. To be specific:

a) An insurance policy shall contain all information required in Article 13 of the Law on Insurance Business.

b) The Certificate of Insurance shall be made by using the form in Annex 4 (for construction works insurance), Annex 5 (for professional liability insurance) and Annex 6 (for construction workers’ compensation insurance) attached hereto.

Article 7. Termination of insurance policies

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a) If the policyholder refuses to make full payment of the premium or refuse to pay the insurance premium within the payment period as agreed in the insurance policy while no agreement on delay in payment of premium is made as stipulated in clause 5 Article 15 ( for the construction works insurance), clause 5 Article 22 ( for professional liability insurance), clause 3 Article 34( for third-party civil liability insurance), the insurance policy shall be automatically terminated from the end of the payment period.

b) The policyholder and insurer mutually agree to terminate the insurance policy in case the construction contract is temporarily halted or is terminated in accordance with regulations of laws.

In this case, the insurance policy will be terminated according to the time when the construction contract is temporarily suspended or is terminated under regulations of laws.

The policyholder shall notify the insurer within 05 days from the date of receipt of notification of suspension or termination of the construction contract.

c) Other cases prescribed by laws.

2. Legal consequences of termination of insurance policies

a) If an insurance policy is terminated under point a clause 1 of this Article, the policyholder shall make full payment of the premium of insurance to the time of termination of the insurance policy.

b) If an insurance policy is terminated under point b clause 1 of this Article, within 15 days from the date of termination, the insurer shall, after deducting relevant reasonable expenses, refund the excessive amount of the premium (if any) to the policyholder in proportion to the remaining effective period of the insurance policy. Where the policyholder fails to make full payment of the premium (according to the insured period to the date of termination of the insurance policy), the policyholder shall make additional payment of the unpaid premium.

c) The legal consequences of termination of an insurance policy are specified in point c, clause 1 of this Article and shall apply in accordance with relevant regulations of laws.

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1. Rights of insurers:

a) Refuse to provide the compulsory insurance for construction activities for entities specified in clause 1, 2 and 3 Article 2 hereof if those entities fail to satisfy competence requirements for construction as stipulated in the Law on Construction and relevant regulations of laws.

b) Request policyholders to provide complete and reliable information related to conclusion and execution of the insurance policy.

c) Make risk assessment.

d) Collect premiums on due date via proper methods as agreed in the insurance policy; adjust the premiums in cases of variations in insured risks as stipulated in Article 20 of the Law on Insurance Business.

dd) Request the policy holder to apply risk control and prevention measures as stipulated in regulations of laws; and to strictly comply with regulations of laws on occupational safety.

e) Request the third party to reimburse the insurer for the indemnity that the insurer has indemnified the insured in case the third party’s fault has given a rise to damage to the insured.

g) Exercise other rights in accordance with regulations of laws.

2. Obligations of insurers

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b) Give explanation, information and documents related to conclusion and execution of the insurance policy.

c) Fully and punctually indemnify the insured as agreed in the insurance policy and relevant law provisions in case an insured event occurs.

d) Comply with the financial regimes stipulated in Article 35 hereof.

dd) Comply with the reporting regime stipulated in Article 36 hereof.

e) Cooperate with functional agencies in implementation of the compulsory insurance for construction activities.

g) Take on obligations prescribed hereof and other obligations under regulations of laws.

Article 9. Rights and obligations of policyholders

1. Rights of policyholders

a) Enter into the insurance policy with any insurer eligible to provide the compulsory insurance for construction activities as stipulated in Article 7 of the Decree No.119/2015/ND-CP.

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c) Request the insurer to indemnify the insured as agreed in the insurance policy in case an insured event occurs

d) Exercise other rights in accordance with regulations of laws.

2. Obligations of policyholders:

a) Buy the compulsory insurance for construction activities as stipulated in this Circular and other relevant regulations of laws.

b) Provide sufficient and necessary information for the insurer, accurately complete the proposal form and facilitate assessment of risks by the insurer.

c) Fully pay premiums on due date and by proper methods as agreed in the insurance policy.

d) Notify the insurer of cases that may give a rise to a claim during the validity period of the insurance policy.

dd) Apply risk control and prevention measures under regulations of laws; implement proper proposals of consultancies and the insurer.

e) Apply necessary safety measures; strictly comply with provisions of laws on occupational safety.

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h) Cooperate with functional agencies in implementation of the compulsory insurance for construction activities.

i) Take on obligations prescribed hereof and other obligations under regulations of laws.

Article 10. Settlement of disputes

1. in case any dispute arises from or related to implementation of the insurance policy, the insurer and policyholder, in the first instance, shall amicably resolve through negotiation. If the dispute is not resolved on the basis of negotiation, it shall be referred to the arbitration by any party (if it is prescribed in the insurance policy) or shall be brought to the court under Vietnam’s regulation of Law.

2. The statute of limitation for filing a lawsuit in connection with the insurance policy is 03 years from the date on which the dispute arises.

Chapter II

SPECIFIC PROVISIONS

Section 1. CONSTRUCTION WORKS INSURANCE

Article 11. The insured and minimum sum assured

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2. The sum assured of a construction works in the construction period as stipulated in clause 1 of this Article is the full value of that works as it is completed, including costs of materials, labor, installations thereof, freights, taxes, other expenses and other work items provided by the investor. The minimum sum assured of a construction works in the construction period shall not be lower than the total value of the construction contract, including the additional and adjusted prices ( if any).

Article 12. Coverage

The insurer shall indemnify for loss and damage to the construction works in the construction period caused by all risks other than those prescribed in Article 5 hereof.

Article 13. Insurance period

The validity period of the construction works insurance shall be conformable to clause 1 Article 5 of the Decree No.119/2015/ND-CP. To be specific:

1. As for the construction works specified in point a clause 1 Article 15 hereof: The insurance period specified in the insurance policy shall be calculated from the commence date to the date of completion of the construction works as stipulated in the investment decision-making authority’s document, including amendments and supplement thereto (if any) . The insurance period of components and work items which are handed over or placed into service shall end from the date such components and work items are handed over or come into operation.

2. As for the construction works specified in point b clause 1 Article 15 hereof: The insurance period specified in the insurance policy is calculated from the date of construction commencement stipulated in the investment decision-making authority’s documents (including adjustments and supplement thereto, if any) to the date of handover or after completion of the first commissioning, but shall not exceed 28 days from the date of commissioning. The insurance period of a used installation thereof shall end from the time it undergoes the commissioning.

Article 14. Liability to buy insurance

The investor shall buy the insurance for the whole project or for each work item in the construction period. To be specific:

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2. For the insurance for each work item in the construction period, the investor shall pay a premium which is equal to the sum assured of that work item but not less than the total value of the completed work item; and the total sum assured of work items shall be not less than the total minimum sum assured as stipulated in clause 1 Article 11 hereof.

Article 15. Premiums and payment of premiums

1. The premium of construction works in the construction period is determined in Annex 7 attached hereto. To be specific:

a) If the insured construction works valued at less than 700 billion dong, whether including the cost of installation of less than 50 % of the total value of insured work items or not, the premiums shall be determined in accordance with point 1 clause I Annex 7 attached hereto.

b) If the insured construction works valued at less than 700 billion dong, including the cost of installation of at least 50 % of the total value of insured work items, the premiums shall be determined in accordance with point 1 clause II Annex 7 attached hereto.

c) For any construction works beyond point 1 clause I and point 1 clause II Annex 7 attached hereto or construction works valued at 700 billion dong or more, the insurer and policyholder shall reach an agreement on insuring clauses, policy wording, premiums and deductible on the basis of proofs certifying that the ceding company receives insurance ceded under the same insuring clauses, policy wording, premiums and deductible as those applying to the insurer and policyholder Foreign ceding companies and organizations shall be those ranked at least BBB by the Standard & Poor’s or B++ by A.M.Best or the equivalent rank in the immediately preceding year of the ceding year by qualified and experienced rating organizations

2. On the basis of level of risks of the insured item, the insurer is entitled to adjust the premium increased by up to 25% of the premium determined in item a point 1 clause I Annex 7 attached hereto (for construction works specified in point a clause 1 of this Article) or determined in item a Point 1 clause II Annex 7 attached hereto (for any construction works specified in point b clause 1 of this Article).

3. In the event that the construction period lasts longer than that prescribed in the decision-making authority's document, the insurer and policyholder may negotiate the additional premiums for the extension. The additional premium ( if any) shall be calculated on the basis of the premium prescribed in Annex 7 attached hereto, the proportion of the extended time to the total construction duration stipulated in the investment decision-making authority’s document and other risks.

4. Deadline for payment of premiums of construction works insurance shall be specified in the insurance policy. To be specific:

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b) In case of installment payment:

According to the construction project’s cost estimate approved by the competent authority, the policyholder and insurer shall reach an agreement on installation as follows:

- 1^st installment: At least 10% of the total (provisional) premium for insured work items shall be settled . The total (provisional) premium shall be determined on the basis of the estimated compulsory insurance price in the project’s cost estimate approved by the competent authority. The premium shall be paid within 30 days from the effective date of the insurance policy and no later than 30 days from the commencement date of the insurance period.

- The following installments: The amount and schedule of each installment shall be mutually agreed by the insurer and policyholder and the payment schedule shall not be slip behind that prescribed in the construction contract (for work items required to be insured by compulsory insurance) as stipulated in regulations of laws.

- Final installment: Final installment must be made at least 15 days before the expiry date of the insurance period.

- Settlement of premiums shall be made in accordance with clause 6 of this Article.

5. Subject to the insurer’s consent, the policyholder could delay making payment of the premium. This delay must be subject to the condition that the policy has collateral properties or payment guarantees as stipulated in the regulations of laws.

6. Settlement of premiums shall be made on the basis of the final value of the construction works (for insured items under the compulsory insurance). To be specific:

a) In case the final value of the construction contract (work items required compulsory insurance) is higher than the approved estimate as the insurance policy is concluded, premium shall be adjusted increased accordingly. The policyholder shall make payment of the additional premium to the insurer within 30 days from the date on which the final construction contract value is approved in writing by the competent authority.

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Article 16. Loss assessment

1. Loss shall be assessed in accordance with Article 48 of the Law on Insurance Business. The assessing agencies shall be responsible for their assessment results.

2. It shall ensure that loss assessment is carried out objectively, accurately, reliably and punctually.

3. The results of loss assessment shall be specified in the assessment record.

Article 17. Principles of indemnity

1. Where an insured event occurs, the policyholder and insurer shall cooperate in indemnification as follows:

a) the policyholder shall:

- Immediately notify the insurer of the insured event via proper means of communication, after 14 days from the date of occurrence, the policy holder shall notify the insurer in writing using form in Annex 10 attached hereto.

- After notifying to the insurer, the policyholder may repair or replace damaged components whose value does not exceed the respective deductible prescribed in item c, point 1, clause I, Annex 7 attached hereto (for construction works specified in point a clause 1 Article 15 hereof) or item c point 1 clause II Annex 7 attached hereto (for construction works specified in point b clause 1 Article 15 hereof).

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- Preserve the status quo of damaged components and make them available for loss assessment by the insurer’s representative and assessor.

- Promptly notify the police authority in case of theft or burglary.

- Apply mitigating measures , within the competence, to minimize loss.

- Provide the insurer with documents required in the claim application as stipulated in clause 1, 2, 3, 4 and 6 Article 18 hereof and facilitate verification of such documents by the insurer.

- Implement, co-ordinate or permit the insurer to take all actions and measures which may be necessary or required by the insurer to protect the insurer’s interests after indemnifying for loss or damageas stipulated herein.

b) As to insurers:

- Carry out loss assessment as stipulated in Article 16 hereof.

- Provide instructions and cooperate with the policyholder and relevant entities in collection of complete documents for preparation of the claim application.

- Formulate claim documents as prescribed in clause 5 Article 18 hereof.

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- In case of rejection, the insurer shall specify reasons for rejection in writing.

2. The Insurer shall indemnify only to the extent the property damage to the insured and to the extent of sum assured.

3. The indemnity for each item specified in the insurance policy shall not exceed its sum assured. The total indemnity shall not exceed the total sum insured specified in the insurance policy. To be specific:

a) In case of repairable damage, all damage shall be repaired. The indemnity is equal to the necessary cost of repairs to restore the damaged items to their original condition immediately before the occurrence of the damage less salvage (in case the policyholder revokes the damaged items) and the deductible.

b) In case of total loss, the indemnity is the actual market value of the items immediately before the occurrence of the loss and at the place of occurrence less the deductible. In case the policyholder revokes the damaged items, the indemnity is the actual value of those items immediately before the occurrence of the loss less salvage and the deductible.

4. The cost of (provisional) repairs shall be borne by the insurer if such repairs constitute part of the final repairs and do not increase the total repair expenses as prescribed in the final repair plan.

5. The insurer shall not be liable for any expense for alteration, addition and/or improvement of any insured work item.

6. If the policyholder enters into construction works insurance policies with 02 insurers or more covering the same item under the same condition and in the same insured event then each insurer shall only be liable to pay or contribute their ratable proportion of their agreed sum assured to the total sum insured of all the insurance policies. The total indemnity paid by all the insurers shall not exceed the actual losses

7. The insurer shall not be liable for any expense which arises, increases from the act of fraud as stipulated in the Criminal Law.

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The insurer shall cooperate with the policyholder, the insured and relevant agencies in collection of relevant documents for formulating the claim application. A claim application includes the following documents:

1. A notice of occurrence and claim request form made by using the Appendix 10 attached hereto.

2. Documents related to the insured items, including the insurance policy and Certificate of Insurance.

3. Proofs of property loss or damage, including:

a) Construction incident documentation (certified true copies or copies confirmed by the party forming such documentation) as stipulated in Article 50 of the Government’s Decree No.46/2015/ND-CP dated May 12, 2015 on construction quality control and maintenance and its amendments, supplement and replacements thereto (if any).

b) Valid invoices and documentation in case of repair or replacement.

4. Written proofs of necessary and reasonable expenses incurred by the policyholder to minimize the extent of loss or damage or by following the insurer’s instructions.

5. A record of assessment of the causes and extent of loss or damage prepared by the insurer or the insurer’s authorized person.

6. Other relevant documents (if any).

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Article 19. The insured and minimum sum assured

1. Consultancies are obliged to buy compulsory professional liability insurance in connection to the construction surveying and design of construction works ranked grade II or higher for the third party.

2. The minimum sum insured must be equal to the value of the consulting contract for construction surveying and/or consulting contract for construction design.

Article 20. Coverage

The insurer shall reimburse the consultancy for indemnities which the contractors shall legally indemnify the third party for their loss and all related costs incurred from construction consultancy services, except loss stipulated in Article 5 hereof.

Article 21. Insurance period

The professional liability insurance comes into effect from the commencement date of provision of consultancy services till the end of the construction warranty period as stipulated in regulations of laws.

Article 22. Premiums and payment of premiums

1. The premiums of professional liability insurance are prescribed in Annex 8 attached hereto. To be specific:

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b) In respect of the construction works other than those specified in point a clause 1 of this Article: the insurer and policyholder shall reach an agreement on insuring clauses, policy wording, premiums and deductible on the basis of proofs certifying that the ceding company receives insurance ceded under the same insuring clauses, policy wording, premiums and deductible as those the insurer applies to policyholder. Foreign ceding companies and organizations shall be those ranked at least BBB by the Standard & Poor’s or B++ by A.M.Best or the equivalent rank in the immediately preceding year of the ceding year by qualified and experienced rating organizations.

2. According to the level of risks of the insured, the insurer shall be entitled to adjust the premium increased by up to 25% of the premium calculated as stipulated in point a clause 1 Annex 8 attached hereto.

3. In the event that the construction period lasts longer than that prescribed in the investment decision-making authority's document, the insurer and policyholder may negotiate for the additional premium for the extended time. The additional premium shall be calculated on the basis of the premium stipulated in point a clause 1 Annex 8 attached hereto and in proportion to the extended time.

4. Settlement of (provisional) premium of the professional liability insurance shall be mutually agreed by the insurer and the policyholder and shall be specified in the insurance policy. To be specific:

a) In case of lump-sum payment: A (provisional) premium shall be paid within 30 days from the effective date of the insurance policy and no later than 30 days from the commencement date of the insurance period. For the insurance period of less than 30 days, the deadline for payment of premium shall not exceed the insurance period. The total (provisional) premium shall be determined on the basis of the approved estimated value of the consulting contract including adjusted and additional costs (if any). Settlement of premiums shall be made in accordance with clause 6 of this Article.

b) In case of installment:

According to the estimated value of the consulting contract for construction survey and design approved by the competent authority as at the time of conclusion of the insurance policy, the policyholder and insurer shall agree on installment as follows:

- The first installment: 50% of the total (provisional) premium shall be paid within 30 days from the effective date of the insurance policy and no later than 30 days from the commencement date of the insurance period. The following installments shall be made as agreed by the insurer and policyholder in the insurance policy originally concluded. In every circumstance, the maturity date must not be later than the expiry date of insurance policy

- Settlement of premiums shall be made in accordance with clause 6 of this Article.

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6. Settlement of premiums shall be made based on the final value of the consulting contract for construction survey and design as follows:

a) In case the final value of a consulting contract is adjusted increased compared with the estimated value approved by the competent authority at the time of conclusion of the insurance policy, the premium shall be adjusted increased accordingly. The policyholder shall pay an additional premium as adjusted to the insurer within 30 days from the date of receipt of the competent authority’s written approval for the final value.

b) In case the final value of a consulting contract for construction survey and design is lower than the estimated value approved by the competent authority at the time of conclusion of the insurance policy, the premium shall be adjusted decreased accordingly. The insurer shall refund the excessive amount of payment to the policyholder within 30 days from the date of receipt of the competent authority’s written approval for the final value from the policyholder.

Article 23. Liability to buy insurance

The policyholder is obliged to buy the compulsory professional liability insurance prior to provision of consultancy services.

Article 24. Principles of indemnity

1. The insurer shall reimburse the consultancy for indemnities which the consultancy is liable to indemnify the third party for their loss and all related costs incurred as prescribed in regulations of laws. To be specific:

a) Loss or damage to the Third Party and related expenses incurred due to the negligence of the insured in process of rendering the construction survey, construction design within the coverage.

b) Third party’s first claim made against the insured (as a consequence of an insured event) and notified to the insurer during the insurance period by the policyholder, including the expenses for the lawyers delegated by the insurer or the insured (having the insurer’s written consent ), other fees and expenses incurred from the investigations, revisions and defense related to the insured event but not including salaries paid for the workers or managers who sign the employment contract with the insured.

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2. The aggregate limit of indemnity of the insurer in respect of all accumulated claims arising within a period of insurance shall not exceed the sum assured prescribed in the insurance policy.

3. If the policyholder enters into professional liability insurance policies with 02 or more insurers covering the same subject under the same condition and insured event, then each insurer shall only be liable to indemnify or contribute their ratable proportion of their agreed sum assured to the total sum insured of all the insurance policies .

4. The insurer shall not be liable for any expense which the consultancy reimburses the third part without the insurer’s prior written consent.

5. The insurer shall not be liable to indemnify in case any claim request is filed without the insured’s consent.

6. The insurer shall not be liable for any expense which arises or incurs from the act of fraud as stipulated in the Criminal Law.

7. In case of loss or damage to the third party’s property, the loss assessment shall be carried out in accordance with Article 16 hereof.

8. Upon the third party’s claim request, the policyholder and the insurer shall cooperate in settlement of such claims as follows:

a) As to the policyholder:

- Immediately notify the insurer of the insured event via proper means of communication; after 14 days from the date of receipt of the third party’s claim request, the policy holder shall inform the insurer in writing using form in Annex 10 attached hereto.

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- Submit requested documents as specified in Clause 1, Clause 2, Clause 3, Clause 4, Clause 5, Clause 7 Article 25 of this Circular, and facilitate verification of those documents by the insurer.

- Implement, co-ordinate or permit the insurer to take actions and measures which are necessary or are required by the insurer to protect the insurer’s interests after indemnification against loss or damage within the liability prescribed herein.

b) As to insurers:

- Carry out loss assessment as stipulated in Article 16 hereof.

- Provide instructions and cooperate with the policyholder and relevant entities in collection of complete documents for preparation of the claim application.

- Formulate claim documents as prescribed in clause 6 Article 25 hereof.

- Cooperate with the policyholder in settlement of the third party’s claim request under the coverage of the insurance policy when an insured event occurs.

- In case the loss or damage is under the coverage, the insurer shall make a notice of indemnification in writing.

- In case of rejection, the insurer shall specify reasons for rejection in writing.

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The insurer shall cooperate with the policyholder, the insured and relevant agencies in collection of relevant documents for formulating the claim application. The claim application for professional liability insurance includes:

1. A notice of the third party’s claim and claim request form made by the policyholder using the Appendix 10 attached hereto.

2. Documents related to the insured, including the insurance policy and Certificate of Insurance.

3. The third party’s written claim against the insured.

4. Proofs of bodily injuries (copies certified by the medical facility; or by the insurer or the insurer’s representative after collating with the original copies). Depending on the extent of injuries, there may include one or certain following documents:

a) Injury Certificate.

b) Hospital discharge form.

c) Documents certifying surgical interventions.

d) medical records

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e) Valid medical expense invoices and receipts (original copies)

5. Proofs of loss or damage to property, including:

a) Construction incident documentation (certified true copies or copies certified by the party forming such documentation) as stipulated in Article 50 of the Government’s Decree No.46/2015/ND-CP dated May 12, 2015 on construction quality control and maintenance and its amendments, supplement and replacements (if any).

b) Valid invoices and documentations in case of repair or replacement.

c) Written proofs of necessary and reasonable expenses which are incurred by the policyholder to minimize the extent of loss or damage or are incurred under the insurer’s instructions.

6. A record of assessment of causes and extent of injuries prepared by the insurer or insurer’s authorized person.

7. Other relevant documents (if any).

Section 3. CONSTRUCTION WORKERS’ COMPENSATION INSURANCE

Article 26. The insured and minimum sum assured

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2. The minimum sum assured for construction workers’ compensation insurance shall be VND 100,000,000/person/ occurrence.

Article 27. Coverage

The insurer has the liability to reimburse the construction contractor for indemnities given to construction workers for disablement or death caused by occupational accidents and occupational diseases on the construction site, other than those specified in the exclusion clause stipulated in Article 5 of this Circular

Article 28. Period of insurance

1. The period of insurance shall commence from the date an insured worker starts working on construction site until the end of the construction works warranty period as stipulated by Law.

2. The exact period of insurance during which a construction worker is covered is determined based on employment contract and documents on the actual working time of the construction worker on the construction site certified by the construction contractor.

Article 29. Premiums and payment of premiums

1. The premiums of workers’ compensation insurance are defined by Annex 9 attached hereto.

2. According to the level of risks of the insured, the insurer shall be entitled to adjust the premium increased by up to 25% of the premium calculated in accordance with Annex 9 attached hereto.

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a) In case of lump-sum payment: The premium shall be paid within 30 days from the effective date of the insurance policy and no later than 30 days from the commencement date of the insurance period. For the insurance period of less than 30 days, the deadline of payment shall not exceed the insurance period.

b) In case of installment: The insurer and policyholder shall reach an agreement on installation of premiums in writing as follows:

- The first installment: 50% of the total (provisional) premium shall be paid within 30 days from the effective date of the insurance policy and no later than 30 days from the commencement date of the insurance period. The following installments shall be made as agreed by the insurer and policyholder in the originally-concluded insurance policy.

- In every circumstance, the maturity date must not be later than the expiry date of insurance policy

4. In case of variation in the number of insured workers and changes in worker’s tasks, the following procedure shall apply:

a) Before the 15^th of the month immediately following the month of variation and changes, the construction contractor shall send the insurer a written notice of such changes or variation enclosed with a list of the additional or downsized workers (in case of variation of the number of workers), or a job description undertaken by workers (in case of changes in jobs/tasks).

b) In case that the number of workers increases and change in jobs causes aggravation of covered risks, the construction contractor must pay an additional premium before the 15^th of the month immediately succeeding the month of notice.

In case that the number of workers increases and change in jobs alleviates the severity of covered risks, the insurer shall refund an amount of the premium adjusted decreased in proportion to the remaining period of insurance before the 15^th of the month immediately succeeding the month of notice.

d) If the construction contractor duly takes on obligations specified in point a and c of this Clause, the insurance policy shall automatically validate or shall be terminated upon the increase or downsizing of workers according to the list of additional or downsized workers; the insurance policy shall automatically validate in case of changes in worker’s jobs/tasks from the date on which it occurs as reported in writing by the insurer.

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Article 30. Liability to buy insurance

Every policyholder shall be obliged to purchase the compulsory workers’ compensation insurance for construction workers on construction sites.

Article 31. Principles of indemnity

1. When an occupational accident or disease occurs to any construction worker on a construction site, both policyholder and the insurer shall jointly take on liability to indemnify as follows:

a) As to the policyholder:

- Immediately notify the insurer of the insured event via proper means of communication, then in writing made by using Annex 11 attached hereto within 14 days from the date of occurrence.

- Take all steps within the capacity to minimize the extent of loss or damage.

- Provide the insurer with documents required in the claim application as stipulated Article 32 hereof and facilitate verification of such documents by the insurer.

- Implement, co-ordinate or permit the insurer to take actions and measures which are necessary or are required by the insurer to protect the insurer’s interests after indemnification against Loss or damage within the liability prescribed herein.

...

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...

- Provide instructions and cooperate with the policyholder and relevant entities in collection of complete documents for preparation of the claim application; determine causes and severity of injuries.

- In case the claim is accepted, the insurer shall make a notice of indemnification in writing.

- In case of rejection, the insurer shall specify reasons for rejection in writing.

2. If a worker’s injury or death as a consequence of any occupational disease or accident occurring during the construction on the construction site is within the coverage, the insurer must cover expenses as agreed by the construction contractor and the insured worker or insured worker’s legal representative (in case of dead). Such covered expenses shall be specified as follows:

a) Allowance during the period of treatment prescribed by doctors which is calculated based on the patient’s salary stated in the employment agreement but shall not exceed the salary of six months per occurrence.

c) Actual expenses including reasonable and necessary expenses for emergency services and outpatient and inpatient treatment but not exceeding 100 million dong/person/AOA.

c) If an insured worker loses less than 81% of his/her work capacity, the indemnity by severity of bodily injury shall be determined according to the Schedule of Indemnities in Annex 12 attached hereto.

d) If an insured worker dies or permanently loses 81% of his/her work capacity or more, the insurer shall pay an indemnity of 100 million dong/person/AOA.

The total indemnity as stipulated in point a, b, c and d of this clause shall not exceed 100 million dong/person/AOA.

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4. Regarding indemnification under point b clause 2 of this Article, If the policyholder enters into workers’ compensation insurance policies with 02 or more insurers covering the same subject under the same condition and insured event, then each insurer shall only be liable to indemnify or contribute their ratable proportion of their agreed sum assured to the total sum insured of all the insurance policies.

Article 32. Claim Applications

The insurer shall cooperate with the policyholder, the insured and relevant agencies in collection of relevant documents for formulating the claim application. Documents requested in a claim application:

1. A notice of occupational diseases/ accidents and claim request form made by the insurer using the Annex 11 attached hereto.

2. Documents related to the insured, including:

a) The insurance policy, Certificate of insurance (if any), employment contract signed by the insured and worker suffering from occupational diseases and/or accidents.

b) The worker’s written claims for occupational diseases and accidents (if any).

3. Proofs of bodily injuries or death due to occupational accidents (copies certified by the competent authorities or by the insurer or the insurer’s representative after collating with the original copies).

a) An occupational accident investigation report (if any) prepared by the competent authority. Where a traffic accident is determined as an occupational accident, traffic accident report or scene investigation report and the diagram of the traffic accident scene prepared by the competent authority shall be submitted.

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c) A work capacity certificate issued by Board of Medical Examiner (in the event of loss of 5% of work capacity or more).

d) Original copies of valid invoices and documents certifying treatment of injuries caused by the occupational accident issued by the medical facility.

4. Proofs of injuries or death due to occupational diseases:

a) An environmental hazard measurement record issued by competent authorities. If this record is made for 2 people or more, each of them must keep one copy.

b) A hospital discharge certificate (or occupational disease examination records if the worker does not receive treatment in any hospital), surgical record, medical record, death certificate and certificate of inheritance (in case of dead).

c) A work capacity certificate issued by Board of Medical Examiner ( in the event that the insurer makes indemnification in accordance with the Schedule of indemnities stipulated in Annex 12 attached hereto).

d) Valid invoices and documents certifying treatment of injuries caused by the occupational accident issued by the medical facility.

5. Proofs of reimbursement by the construction contractor for injuries and dead caused by occupational diseases and accidents within the coverage (if any).

6. Other relevant documents (if any).

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Article 33. The insured and coverage

1. The contractor shall be obliged to purchase the third-party civil liability insurance for the third party when the project is executed.

2. Insurers shall be liable to reimburse the contractors if the contractors are requested to indemnify for loss or damage to third party incurred within the coverage due to the contractor’ faults within the period of insurance.

Article 34.Implementation of insurance

The third-party civil liability insurance shall be applied to the third party in accordance with relevant regulation of laws and the following instructions:

1. Insurers shall actively establish insuring clauses, policy wording and schedules of premiums of the third-party civil liability insurance in accordance with point b clause 4 Article 39 of the Government’s Decree No.73/2016/ND-CP dated July 01, 2016 detailing the Law on Insurance Business, Law on amendments and supplement to a number of Articles of the Law on Insurance Business and amendments and supplement thereto (if any).

2. Settlement of premiums of the third-party civil liability insurance shall be conducted as follows:

a) In case of lump-sum payment: The premium shall be paid within 30 days from the commencement date of the insurance period. For the insurance period of less than 30 days, the maturity date shall not be later than the insurance period.

b) In case of installment: The insurer and policyholder shall reach an agreement on installation of premiums which is made in writing as follows:

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...

- In every circumstance, the deadline for payment of premium must not exceed the insurance period prescribed in the insurance policy

3. Subject to the insurer’s consent, the policyholder could delay making payment of the premium. This delay in payment of premiums shall be prescribed in the insurance policy and must be subject to the condition that the policyholder has collateral properties or payment guarantees as stipulated in the regulations of laws.

Secion 5. FINANCIAL REGIME AND REPORTING REGIME

Article 25. Financial regime

Insurers providing compulsory insurance for construction activities shall:

1. Comply with the financial regime stipulated in the law on insurance business and relevant regulations of laws.

2. Enter premium revenues, insurance commissions, indemnities and other expenses related the compulsory insurance for construction activities into separate accounts.

Article 36. Reporting regime

The insurer shall prepare and submit the reports on compulsory insurance for construction activities as follows:

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a) Quarterly reports shall be submitted within 30 days from the end of the reported quarter.

b) Annual reports shall the submitted within 90 days from the end of the reported year.

2. Surprised reports shall be submitted upon request of the Minister of Finance.

Chapter III

IMPLEMENTATION

Article 37. Transitional provisions

Construction insurance policies signed before the effective date of this Circular shall be continued to be executed in accordance with the applicable laws at the time of signature.

Article 38. Entry into force

1. This Circular enters into force from March 01, 2017.

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PP.MINISTER
DEPUTY MINISTER




Tran Xuan Ha

ANNEX 1

PROPOSAL FORM FOR CONCLUSION OF CONSTRUCTION WORKS POLICY
(Promulgated under the Circular No. 329/2016/TT-BTC dated December 26, 2016 of Ministry of Finance)

1. Name of the construction works (if there are several work items for which insurance is purchase, specify each work item to be insured)

2. Location of the construction works (specify Country/ Province/ District/ City/ Town/ Commune/ Hamlet……)

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3. Name and address of the insurance buyer

4. Name and address of the main construction contractor

5. Name and address of every sub-contractor

6. Name and address of every survey consultancy contractor

7. Name and address of every design consultancy contractor

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8.  Name and address of the contractor in charge of construction site supervision

9. Name and address of the contractor in charge of installation supervision

10. Name and address of every insured

11. Description of construction works and technical specifications (these contents may be provided in enclosed documents, where necessary) (*)

(*) In case of a complex construction design, a complete questionnaire should be provided at the request of the insurer.

Dimensions (length, height, depth, spans, number of storeys, etc.)

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...

...

Construction method:

Building materials:

12. Is the construction contractor experienced in this type of construction work or construction method? (specify every sub-contractor)

Name of sub-contractor:                       Yes □            No □

Name of sub-contractor:                       Yes □    No □

13. Have diagrams, design and building materials of this construction work been ever used or tested?

 (specify the relevant construction work, if any)

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14. Have diagrams, design and building materials of this construction work been ever used or tested by the main contractor/sub-contractors mentioned above? (specify the relevant construction work, if any)

Yes □   No □

15. Does this construction expand an existing building?

- If yes, is the existing building still operating during this construction or installation?

(enclosed with diagrams, if any)

Yes □   No □

Yes □   No □

16. Insurance period

(as specified in the investment decision-making authority’s document)

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...

Warranty period from…………………….. to …………………..

17. Description of works done by subcontractors

18. Specify equipment installed (whether new brand or used one?)

As for machinery: specify name of manufacturer, registration number, type, dimensions, capacity, weight, pressure, temperature (if any)

As for finished work: general layout, features of construction works (if any)

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19. Special risks to the construction work

Fire, explosion?                                               Yes □   No □

Flood, inundation?                                           Yes □   No □

Landslide, storm, cyclone?                              Yes □   No □

Blasting work?                                                 Yes □   No □

Volcanism, tsunami?                                      Yes □   No □

Have earthquakes been observed in this area?    Yes □   No □

(If yes, specify the intensity (Mercalli)                                Magnitude (Richter)

Other risks?                                                 Yes □   No □

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Is the design standard higher than that stipulated in the relevant regulations?                                 Yes □   No □

20. Subsoil status

Rock □     Gravel □        Sand □        Clay □     Filled ground □   

Other conditions:

Do geological faults exist in the vicinity?                                       Yes □   No □

21. Ground water

Level below grade:                          (m)

22. Nearest river, lake, sea, etc.

Name   

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Water levels:

- Low water

- Mean water

- Highest level

The highest level recorded on……………..

23. Meteorological conditions

Rainy season from……………to…………

Max rainfall (mm):          ………/hour             ………./day                ……..../month

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Express freight:

Air freight:

Insurance value

Items to be insured

Sum to be insured

1. Value of the construction work/work item to be insured:

1.1. Contract price

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...

2. 2. Installation costs

3. 3. Freights

4. Taxes

5. Clearance of debris (if any)

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...

Total sum to be insured

The insurance buyer hereby declares that the information provided in this Proposal form is true and complete to the best knowledge of the insurance buyer. The insurance buyer hereby agrees that this Proposal form, and the information provided by the insurance buyer hereof, forms the basis and is an integral part of the policy.

.........……., day…….month……year …..
INSURANCE BUYER
(Signature, specify full name and seal)

ANNEX 7

SCHEDULE OF PREMIUMS, SURCHARGES AND DEDUCTIBLE OF CONSTRUCTION WORKS INSURANCE
(Enclosed with the Circular No.329/2016/TT-BTC dated December 26, 2016 by the Ministry of Finance)

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1. Construction works valued at less than 700 billion dong

a) The premium schedule:

No.

Types of construction works

Percentage of premium ( by the value of the construction works)

Deductible

1

CIVIL WORKS

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1.1

Housing

1.1.1

Apartment building, tenements, dorms up ranked grade III or higher; tourist accommodation establishments having 50 rooms or more; residential establishments for use of 500 occupiers or having 100 households or more

1.1.1.1

...

...

...

0.8

M

1.1.1.2

1 or 2 basements

1.2

M

1.1.1.3

More than 02 basements

1.5

...

...

...

1.1.2

Detached houses having at least 7 storey, ranked grade II or higher

1.1.2.1

No basement

0.8

M

1.1.2.2

...

...

...

1.1

M

1.1.2.3

More than 02 basements

1.4

M

1.2

Public works

...

...

...

1.2.1

Education construction works, grade III or higher

1.2.1.1

No basement

0.8

M

1.2.1.2

...

...

...

1.2

M

1.2.1.3

More than 02 basements

1.5

M

1.2.2

Health facility, grade III or higher; other health facility having 50 sickbeds or more

...

...

...

1.2.2.1

No basement

0.8

M

1.2.2.2

1 or 2 basements

1.2

M

1.2.2.3

...

...

...

1.5

M

1.2.3

Sport facility

1.2.3.1

Outdoor sport facility of grade III or higher ( excluding sport ground); golf courses with the area of 10ha ore larger

1.5

...

...

...

1.2.3.2

Indoor sport facility, grade III or higher

1.4

M

1.2.3.3

Other sport facility, grade III or higher

1.2

M

1.2.4

...

...

...

1.2.4.1

No basement

0.8

M

1.2.4.2

1 or 2 basements

1.2

...

...

...

1.2.4.3

More than 02 basements

1.5

M

1.2.5

Construction works, grade III or higher, for commerce, services and offices of socio-professional organizations, public service providers and enterprises (Multifunctional complexes, hotels,; office buildings of socio-professional organizations, public service providers and enterprises; shopping malls, supermarkets ranked grade III or higher or having floor area of 10.000 m² or larger; Stores, restaurants, cafeteria and other similar works); Communication buildings (post office) from grade III upward; grade I and grade II markets in cities, towns.

1.2.5.1

...

...

...

1.1

M

1.2.5.2

1 or 2 basements

1.4

M

1.2.5.3

More than 02 basements

1.7

...

...

...

1.2.6

Cable cars for transport of passengers; cable cars with the length of 500 m or longer

4.0

N

1.2.7

Terminals

1.2.7.1

...

...

...

2.0

M

1.2.7.2

Harbors railway stations; grade III bus stations ; bus stations or higher, railway stations with area of 5 ha or larger

2.0

M

2

INDUSTRIAL WORKS

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2.1

Building material factories

2.1.1

Cement production factories; Clinker production factories with output of at least 100,000 tonnes per year; factories for producing bricks, fibro with output of at least 100 million unit per year or at least 500,000 m² of fibro per year; tile production factories with output of at least 500,000 m² per year; facility for production of other construction materials with output of at least 50,000 tonnes per year ; factories for production of hot plastic concrete, commercial concrete and others with output of at least 100 tonnes per day.

2.6

M

2.1.2

...

...

...

2.6

M

2.1.3

Building material production facility ranked grade III or higher

2.4

M

2.2

Metallurgical plants and mechanical factories

...

...

...

2.2.1

Facility for cutting and rolling metal with output from 2,000 tonnes per year

1.9

M

2.2.2

Metallurgical plants using scraps or metallurgical plants with the output of at least 1,000 tonnes/year if using other materials.

2.1

M

2.2.3

...

...

...

2.1

M

2.2.4

Facility for building, repairing and assembling of locomotives, carriages; Facility for production, repair and assembly of motor bikes and/or automobiles with the output of at least 5,000 motor bikes/year or 500 cars/year

1.9

M

2.2.5

Facility for building and repair of ships with the deadweight tonnage of 1,000 DWT or more

2.1

...

...

...

2.2.6

Facility for manufacture of machinery, equipment and instruments with the capacity of at least 1,000 tonnes /year

1.9

M

2.2.7

Facility for plating, spraying and polishing metals with the capacity of at least 500 tonnes /year

1.9

M

2.2.8

...

...

...

2.3

N

2.2.9

Other grade III metallurgical and mechanical plants or higher

2.3

N

2.3

 open pit mining and mineral processing projects

...

...

...

2.3.1

Projects for solid mineral mining (not using harmful chemicals, industrial explosives) with volume of at least 50,000 m³ /year or total volume of ( at least 1,000,000m³ (minerals, rock tailings)

2.3

N

2.3.2

Projects for sand, gravel extraction with the capacity of at least 50,000m³ per year; projects for extraction of materials for leveling with the capacity of at least 100,000m³ per year

2.3

N

2.3.3

...

...

...

2.3

N

2.3.4

Projects for water extraction for production, business, service and domestic use with the capacity of at least 3,000m³/day for underground water or at least 50,000m³ for surface water

2.5

N

2.3.5

Projects for extraction of natural mineral water, hot springs (underground or surface) with the capacity of at least 200 m³/day (for bottled water) or 500m³/day for water for other purposes

2.5

...

...

...

2.3.6

Grade III projects for mineral mining and processing or higher

4.0

N

2.4

Oil & gas facility

2.4.1

...

...

...

5.0

M

2.4.2

Oil and petrol depots, petrol stations with the capacity of 200 m³ or more

3.0

M

2.5

Energy projects

...

...

...

2.5.1

Grade-III thermopower stations or higher

3.0

N

2.5.2

Grade-III wind power stations (wind farms) or higher; or wind power stations ( wind farms) with the area of at least 100 ha

3.0

N

2.5.3

...

...

...

2.6

N

2.5.4

Grade-III hydropower plants or higher; or those having reservoirs with the capacity of at least 100,000m³ or power of at least 10 MW

7.5

M

2.5.5

110 kV power transmission lines or higher; 500 Kv substations

2.5

...

...

...

2.5.6

Factories for manufacturing, processing of electronic components and spare parts with the capacity of at least 500,000 products/year; electronic equipment with the capacity of 500 tonnes/year

1.5

M

2.5.7

Other energy projects of grade III or higher

2.0

M

2.6

...

...

...

2.6.1

Fertilizer and pesticide manufacturers

2.6.1.1

Chemical fertilizer plants with the capacity of at least 1,000 tonnes/ year

1.5

...

...

...

2.6.1.2

Pesticide warehouses with the capacity of 500 tonnes or more and fertilizer warehouses with the capacity of at least 5,000 tonnes

1.5

M

2.6.1.3

Pesticide manufacturers

1.2

N

2.6.1.4

...

...

...

1.2

N

2.6.1.5

organic fertilizer and microbial fertilizer plants with the capacity of at least 10,000 tonnes per year

1.2

N

2.6.2

Facility for production of chemicals, medicines, cosmetics, plastics

...

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...

2.6.2.1

Facility for production of medicines; veterinary medicines, medicine ingredients (including pharmaceutical raw ingredients and excipient) with the capacity 50 tonnes per year

2.0

N

2.6.2.2

Cosmetics manufacturers with the capacity of at least 50 tonnes/ year

2.0

N

2.6.2.3

...

...

...

2.0

N

2.6.2.4

Facility for production of plastic, plastic bead with output from 1,000 tonnes /year

2.0

N

2.6.2.5

Facility for production of detergent, additives with the capacity of at least 1,000 tonnes/year

2.0

...

...

...

2.6.2.6

Facility for production of propellant, gunpowder, fire equipment

3.0

N

2.6.2.7

Facility for production of industrial explosives; fixed explosive warehouse with the capacity of at least 5 tonnes ; chemical warehouse with the capacity of 500 tonnes or more

3.0

N

2.6.2.8

...

...

...

1.5

N

2.6.3

Grade –III chemical plants or higher

2.0

N

2.7

LIGHT INDUSTRIAL WORKS

...

...

...

2.7.1

Food production and processing facility

2.7.1.1

Food production and processing facility with the capacity of at least 500 tonnes/year

1.8

M

2.7.1.2

...

...

...

1.8

M

2.7.1.3

Facility for processing of fisheries, fish powder and by-products with the capacity of at least 100 tonnes per year

1.8

M

2.7.1.4

Facility for production of sugar with the capacity of at least 10,000 tonnes per year

1.8

...

...

...

2.7.1.5

Facility for production of alcohol with the capacity of at least 500,000 liters/year

1.8

M

2.7.1.6

Facility for production of beer and beverage with the capacity of at least 10,000,000 litter per year

1.8

M

2.7.1.7

...

...

...

1.8

M

2.7.1.8

Facility for production of milk with the capacity of at least 10,000 tonnes per year

1.8

M

2.7.1.9

Facility for production and processing of cooking oil with the capacity of at least 10,000 tonnes per year

1.8

...

...

...

2.7.1.10

Facility for production of confectionery with the capacity of at least 5,000 tonnes per year

1.8

M

2.7.1.11

Facility for production of bottled fresh water, bottled mineral water with the capacity of at least 2,000 m³ per year

1.8

M

2.7.2

...

...

...

2.7.2.1

Facility for production of cigarette, tobacco ingredients with the capacity of at least 100,000,000 cigarettes per year or 1,000 tonnes of ingredients per year

1.5

M

2.7.2.2

Facility for production and processing of agricultural product, starch product with the capacity of at least 10,000 tonnes per year if dry processing technology is applied; or at least 1,000 tonnes of product per year if fresh processing technology is applied

1.5

...

...

...

2.7.2.3

Facility for production of tea, cashew, cocoa, coffee, pepper with the capacity of at least 5,000 tonnes per year if dry processing technology is applied; from 1,000 tonnes per year if fresh processing technology is applied

1.5

M

2.7.3

Projects for processing wood, glass, ceramics

2.7.3.1

...

...

...

2.0

M

2.7.3.2

Facility for production of plywood with the capacity of at least 100,000 m² per year

2.0

M

2.7.3.3

Facility for production of wooden products having warehouses, factories with the total area of at least 10,000 m²

2.0

...

...

...

2.7.3.4

Facility for production of lamp bubbles and flasks with the capacity of at least 1,000,000 products per year

1.5

M

2.7.3.5

Facility for production of ceramic, glass with the capacity at least 1,000 tonnes per year or 10,000 products per year

1.2

M

2.7.4

...

...

...

2.7.4.1

Facility for production of paper pulp and paper from raw materials with the capacity of at least 300 tonnes per year

2.0

M

2.7.4.2

Facility for production of paper, carton package from paper pulp or scraps with the capacity of at least 5,000 tonnes per year

2.0

...

...

...

2.7.4.3

Stationery production facility with the capacity of at least 1,000 tonnes/ year

2.0

M

2.7.5

Facilities in textile, dyeing and garments

2.7.5.1

...

...

...

1.5

M

2.7.5.2

Facility for textile without dyeing having the capacity with at least 10,000,000 m² of fabric per year

1.2

M

2.7.5.3

Facility for production and processing of textile products with the capacity of at least 50,000 products per year if bleaching is included; or at least 2,000,000 product per year in case bleaching is excluded;

1.2

...

...

...

2.7.5.4

Facility for industrial laundry with the capacity of at least 50,000 products per year

1.2

M

2.7.5.5

Facility for production of silk yarn, cotton yarn, artificial yarn with the capacity of at least 1,000 tonnes per year

1.2

M

2.7.6

...

...

...

2.7.6.1

Facility for production of animal feed with the capacity of at least 1,000 tonnes per year

1.0

M

2.7.6.2

Facility for aquaculture with water surface area of at least10ha; or extensive aquaculture farm with the area of at least 50 ha

4.0

...

...

...

2.7.6.3

Facility for farming cattle, poultry with lodging area of at least 1,000 m²; facility for farming, caring of wild animal with lodging area of at least 500 m²

1.0

M

2.7.7

Other light industrial works

2.7.7.1

...

...

...

1.5

M

2.7.7.2

Facility for production of medical equipment and medical rubber and plastics with the capacity of at least 100,000 products per year

1.5

M

2.7.7.3

Facility for production of footwear with the capacity of at least 1,000,000 pairs per year

1.5

...

...

...

2.7.7.4

Facility for production of rubber tyres (car tyre and /or trailer production facility having the capacity of at least 50,000 products per year; facility for production of tyre for motors, bicycles having the capacity of 100,000 products per year)

1.8

M

2.7.7.5

Project for construction of facility for producing ink and other printing materials with the capacity of at least 500 tonnes of ink per year ; or 1,000 products per year (for other printing materials)

1.8

M

2.7.7.6

...

...

...

2.5

M

2.7.7.7

Tanning production facilities

1.8

M

2.7.7.8

Facility for production of CO₂ gas and facility for extraction, refueling, liquefying of industrial gas with other capacity of at least 3,000 tonnes per year

2.5

...

...

...

2.7.7.9

Ship dismantling and flushing facility

3.0

M

3

INFRASTRUCTURES

3.1

...

...

...

3.1.1

Water supply plant and clean water treatment plant

3.0

N

3.1.2

raw water, clean water or pressurized pumping station (including pump station and water tanks if the pumping station is placed on the water tanks)

2.0

...

...

...

3.2

Water drainage

3.2.1

Detention basin

5.0

N

3.2.2

...

...

...

3.0

N

3.2.3

Wastewater treatment plant

3.0

N

3.24

Wastewater pump stations (including pump station and water tanks if the pumping station is placed on the water tanks)

3.0

...

...

...

3.2.5

Sludge treatment plant

4.0

N

3.2.6

Project of construction or renovation of municipal domestic drainage system with the length of 10 km or longer

2.5

N

3.3

...

...

...

3.3.1

Grade-II non-hazardous solid waste treatment facility or higher

2.5

N

3.3.2

Hazardous waste treatment and recycling facility ; hazardous solid waste treatment and recycling facility with capacity of 10 tonnes or more

2.5

...

...

...

3.3.3

Centralized municipal wastewater treatment system or centralized industrial wastewater treatment system

2.5

N

3.3.4

Grade-II waste treatment and recycling facility or higher

3.0

N

3.4

...

...

...

3.4.1

Tower station for telecommunication, radio, TV, BTS level 3 or higher

2.5

N

3.4.2

Grade-II telecommunication cable or higher

3.0

...

...

...

3.5

Car and motorbike parking lot

3.5.1

 Grade-II underground parking garage or higher

4.5

N

3.5.2

...

...

...

1.2

N

3.6

Cable system, Technical trenches, technical tunnel grade II or higher

1.5

N

3.7

Other infrastructures

...

...

...

3.7.1

Infrastructure in municipal residential area with area of at least 5ha

1.5

N

3.7.2

Infrastructure of industrial zone, high-tech industrial zone, group of industrial zone, processing zone, trading zone, producing village and other central of production and trading

1.5

N

4

...

...

...

4.1

Road

4.1.1

Highway

4.0

...

...

...

4.1.2

Roads for automobiles in urban areas, grade I or higher

2.5

N

4.1.3

Grade-IV road with the length of at least 50km in mountainous regions

4.0

N

4.2

...

...

...

4.2.1

Railway on the ground

1.5

N

4.2.2

Overhead railway

3.0

...

...

...

4.2.3

Tunnel railway

3.5

N

4.3

Bridge

4.3.1

...

...

...

6.0 (the premium shall be added 0.1 ‰ in proportion to every increase in the grade of the construction works)

N

4.3.2

Footbridges raked at grade III or higher

2.0 (the premium shall be added 0.1 ‰ in proportion to every increase in the grade of the construction works)

N

4.3.3

Railway bridge ranked grade III or higher, railway bridge with the length of at least 500 m (excluding transition path)

6.0 (the premium shall be added 0.1 ‰ in proportion to every increase in the grade of the construction works)

...

...

...

4.3.4

Pontoon bridges ranked at grade III or higher

6.0 (the premium shall be added 0.1 ‰ in proportion to every increase in the grade of the construction works)

N

4.4

Underground transport works; Tunnel (road tunnel, rail tunnel, pedestrian tunnels ranked grade III or higher; tunnel for metro railway)

4.4.1

...

...

...

12.0

N

4.4.2

Underground

10.0

N

4.5

inland waterway works

...

...

...

4.5.1

Inland ports, inland wharves

7.0

N

4.5.2

River ports for the docking of ships with deadweight tonnage of 1,000 DWT or more

8.0

N

4.5.3

...

...

...

8.0

N

4.6

Maritime works

4.6.1

Seaport for the docking of ships with deadweight tonnage of 1,000 DWT or more

10.0

...

...

...

4.6.2

asylum harbor for dock of ships with the deadweight tonnage of 1,000 DWT or more

10.0

N

4.6.3

Other maritime works ranked grade II or higher

10.0

N

4.7

...

...

...

4.7.1

Airport (take-off and landing lane, cargo terminals with capacity of at least 200,000 tonnes of cargo per year, lounges)

3.0

N

4.7.2

Other works in airfield ( including construction works for air navigation)

3.0

...

...

...

5

AGRICULTURAL AND RURAL DEVELOPMENT WORKS

5.1

Irrigation works

5.1.1

...

...

...

5.0

N

5.1.2

 Reservoirs ranked grade III or higher; or reservoir having the capacity of at least 100,000 m³

8.0

N

5.1.3

Barriers ranked grade III or higher

4.0

...

...

...

5.1.4

Dam and other pressurized irrigation works

10.0

N

5.2

Dyke, embankment with length of at least 1,000 m

10.0

N

6

...

...

...

6.1

Cemetery with the area of at least 20 ha, cremation center

1.0

N

6.2

Reclamation works with the length of the coastal boundary of at least 1,000m or reclaimed area of at least 5ha

12.0

...

...

...

Note:

M, N denote the types of deductible stipulated in item c of this point.

b) Surcharges:

According to the specific location of the projects and risk-related factors, the surcharge shall be calculated as follows:

No.

Province

Risks of flood, storm (‰ by the value of the construction works or work item and/or installations thereof)

Risks of subsidence, earthquake (‰ by the value of the construction works or work item and/or installations thereof)

1

...

...

...

0.3

0.1

2

Ho Chi Minh

0.3

0.1

3

Hai Phong

0.2

...

...

...

4

Cao Bang

0.1

0.1

5

Ha Giang

0.2

0.2

6

...

...

...

0.1

0.2

7

Lang Son

0.1

0.2

8

Lai Chau

0.1

...

...

...

9

Dien Bien

0.1

0.2

10

Lao Cai

0.1

0.2

11

...

...

...

0.1

0.2

12

Thai Nguyen

0.1

0.2

13

BacKan

0.1

...

...

...

14

Son La

0.1

0.2

15

Vinh Phuc

0.2

0.2

16

...

...

...

0.2

0.1

17

Bac Giang

0.2

0.1

18

Bac Ninh

0.2

...

...

...

19

Quang Ninh

0.2

0.1

20

Hoa Binh

0.1

0.1

21

...

...

...

0.2

0.1

22

Hung Yen

0.2

0.1

23

Thai Binh

0.2

...

...

...

24

Ha Nam

0.3

0.1

25

Nam Dinh

0.3

0.1

26

...

...

...

0.2

0.1

27

Thanh Hoa

0.3

0.1

28

Nghe An

0.3

...

...

...

29

Ha Tinh

0.3

0.2

30

Quang Binh

0.3

0.2

31

...

...

...

0.3

0.2

32

Thua Thien Hue

0.3

0.2

33

Quang Nam

0.3

...

...

...

34

Danang

0.3

0.2

35

Quang Ngai

0.3

0.2

36

...

...

...

0.3

0.1

37

Phu Yen

0.3

0.1

38

Khanh Hoa

0.3

...

...

...

39

Ninh Thuan

0.3

0.1

40

Binh Thuan

0.3

0.1

41

...

...

...

0.1

0.1

42

Kontum

0.1

0.1

43

Daklak

0.1

...

...

...

44

Dak Nong

0.1

0.1

45

Lam Dong

0.1

0.1

46

...

...

...

0.1

0.1

47

Binh Phuoc

0.1

0.1

48

Tay Ninh

0.1

...

...

...

49

Dong Nai

0.1

0.1

50

Long An

0.2

0.1

51

...

...

...

0.2

0.1

52

An Giang

0.2

0.1

53

Tien Giang

0.2

...

...

...

54

Ben Tre

0.3

0.1

55

Vinh Long

0.2

0.1

56

...

...

...

0.2

0.1

57

Can Tho

0.2

0.1

58

Soc Trang

0.2

...

...

...

59

Kin Giang

0.2

0.1

60

Hau Giang

0.2

0.1

61

...

...

...

0.2

0.1

62

Ca Mau

0.2

0.1

63

Ba Ria-Vung Tau

0.3

...

...

...

c) Deductible rate:

The deductible rate of construction works insurance shall be conformable to the below table or shall equal 5% of total loss, whichever higher shall apply.

Dơn vị: triệu Dồng

Sum assured

DEDUCTIBLE “M”

DEDUCTIBLE “N”

Acts of God

Other events

...

...

...

Other events

Up to 10,000

 20,000

 100,000

 600,000

 700,000

100

150

200

...

...

...

500

20

30

60

80

100

150

200

300

...

...

...

700

40

40

80

150

200

2. For construction works valued at 700 billion dong or more or construction works not mentioned in Article 1 clause I of this Annex

 The insurer and policyholder shall reach an agreement on insuring clauses, policy wording, premiums and deductible on the basis of proofs certifying that the leading ceding company receives insurance ceded under the same insuring clauses, policy wording, premiums and deductible as those the insurer applies to the policyholder. Foreign ceding companies and organizations shall be those ranked at least BBB by the Standard & Poor’s or B++ by A.M.Best or the equivalent rank in the immediately preceding year of the ceding year by qualified and experienced rating organizations.

II. INSURED CONSTRUCTION WORKS INCLUDING INSTALLATION WORK AND COST OF INSTALLATION ACCOUNTING FOR AT LEAST 50 % OF THE TOTAL VALUE OF INSURED WORK ITEMS

...

...

...

a) The premium schedule:

Code

Work items, types of installations thereof

Premium (‰ by value of work item, type of installations thereof)

Deductible
(Type)

1

CIVIL WORKS

...

...

...

Housing; educational construction works; medical examination and treatment establishments and other medical facility; sports facility; cultural construction works; resorts; construction works for commerce, service and office buildings of socio-professional organizations, public service providers and enterprises; communication buildings (post office); Market grade I, II in cities, town; terminals

1.1.1

General installation

1.9

M

1.1.2

Heaters

...

...

...

M

1.1.3

Air conditioners

2.0

M

1.1.4

Elevators

1.9

M

...

...

...

Kitchen appliances

2.3

M

1.1.6

Medical equipment

2.0

M

1.1.7

Sterilizing equipment

...

...

...

M

1.1.8

Chillers

1.7

M

1.1.9

Lighting equipment

1.7

M

...

...

...

Cinemas TV and film studios

1.9

M

1.1.11

Cable cars

4.0

N

2

INDUSTRIAL WORKS

...

...

...

2.1

Building material factories

2.1.1

General

2.3

N

...

...

...

Cement factories

2.6

N

2.1.3

Concrete plants

2.3

N

2.1.4

Brick plants

...

...

...

N

2.1.5

Clinker plants

2.4

N

2.1.6

Title and fibro cement factories

3.0

N

...

...

...

Tile manufacturers

2.7

N

2.2

Metallurgical plants and mechanical factories

2.2.1

Iron and steel

...

...

...

2.2.1.1

Metallurgical plants

3.2

N

2.2.1.2

Iron smelters (block iron)

3.4

N

...

...

...

Steel production facility

3.4

N

2.2.1.4

Steel mills

3.1

N

2.2.1.5

Steel hot-rolling mills

...

...

...

N

2.2.1.6

Cold-rolling mills (thin plates)

3.2

N

2.2.1.7

Foundries

2.9

N

...

...

...

Non-ferrous metals

2.2.2.1

 metallurgical plants

3.4

N

2.2.2.2

Aluminium smelter

...

...

...

N

2.2.2.3

Mills

3.1

N

2.2.2.4

Hot-rolling mills

3.1

N

...

...

...

Cold-rolling mills

2.9

N

2.2.2.6

Foundries

2.9

N

2.2.3

Production of other metals

...

...

...

N

2.3

Mineral mining and processing

2.3.1

Open pit mining equipment

3.5

N

...

...

...

Coal open pit mining equipment

3.2

N

2.3.3

Equipment for ore open pit mining

3.2

N

2.3.4

Heavy dredging equipment for surface mining

...

...

...

N

2.3.5

Ore processing equipment

3.0

N

2.3.6

Other equipment

3.2

N

...

...

...

Oil & gas facility

2.4.1

Refineries, gas processing; petrochemical refineries (excluding projects for LPG extraction and lubricant production), facility for production of petrochemical products, drilling fluids, petro chemicals; oil and gas pipelines; oil and gas transit centers

6.0

N

2.4.2

Oil depots and petrol stations

...

...

...

N

2.5

Energy projects

2.5.1

Thermal power plants using fossil coal, oil and lignite ( temperature up to 540⁰C)

...

...

...

 Maximum 10 MW/machine

4.1

N

2.5.1.2

 Maximum 50 MW/machine

4.2

N

2.5.1.3

 Maximum 150 MW/machine

...

...

...

N

2.5.1.4

 Maximum 300 MW/machine

5.0

N

2.5.2

Steam turbine (tempt maximum 540^o C)

...

...

...

 Maximum 50 MW

3.7

N

2.5.2.2

 Maximum 150 MW

5.6

N

2.5.2.3

 Maximum 300 MW

...

...

...

N

2.5.3

Generator in thermal plants

2.5.3.1

 Maximum 180 MVA

4.1

N

...

...

...

 Maximum 400 MVA

5.0

N

2.5.4

Boiler (and its accessories)

2.6

N

2.5.5

Tube boiler (tempt maximum 540^o C)

...

...

...

2.5.5.1

 Maximum 50 tonnes/hour

2.4

N

2.5.5.2

 Maximum 200 tonnes/hour

2.6

N

...

...

...

 Maximum 1000 tonnes/hour

2.9

N

2.5.6

Other types of boilers

2.5.6.1

 Maximum 75 tonnes/hour

...

...

...

N

2.5.6.2

 Maximum 150 tonnes/hour

3.9

N

2.5.7

Heating boilers

2.4

N

...

...

...

Pipe

2.2

M

2.5.9

Diesel power plant

2.5.9.1

 Maximum 5000 KW/ machine

...

...

...

M

2.5.9.2

 Maximum 10000 KW/ machine

3.8

N

2.5.10

Generator in diesel power plant with maximum 12 MVA

3.8

N

...

...

...

Turbine engines in diesel power plant with maximum 5000 KW

2.5.11.1

- Installation

2.8

N

2.5.11.2

- Demolition

...

...

...

N

2.5.12

Switchyard

2.5.12.1

 Maximum 100 KV

2.6

N

...

...

...

 > 100 KV

3.0

N

2.5.13

Transformer

2.5.13.1

 Maximum 10 MVA

...

...

...

N

2.5.13.2

 Maximum 50 MVA

3.5

N

2.5.13.3

 Maximum 100 MVA

4.0

N

...

...

...

 Maximum 250 MVA

4.4

N

2.5.13.5

 Maximum 400 MVA

4.8

N

2.5.14

Power plant using industrial gas turbine

...

...

...

2.5.14.1

 Maximum 40 MW/ machine

4.9

N

2.5.14.2

 Maximum 60 MW/ machine

5.3

N

...

...

...

Wiring and renovation of electrical grid

3.2

N

2.5.16

Production and processing of electronic and electrical equipment, components and electronic appliances

3.5

N

2.5.17

Wind power plant, hydropower plant and photovoltaic power plant

...

...

...

N

2.6

Chemical facilities

2.6.1

Fertilizer and pesticide manufacturers

...

...

...

Fertilizer factory – normal type

2.5

N

2.6.1.2

Pesticide factory

2.0

N

2.6.2

Facilities for production of chemicals, medicines, cosmetics, plastics

...

...

...

2.6.2.1

Factory for processing plastic items

2.7

N

2.6.2.2

Pharmaceuticals and cosmetics production factory

2.5

N

...

...

...