General provisions on insurance contracts in insurance business in Vietnam
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Legal grounds
Law on Insurance Business 2000
What is the insurance business?
Regarding the concept, according to Clause 1, Article 3 of the Law on Insurance Business 2000, the specific idea of insurance business is as follows:
Insurance business is an activity of an insurance enterprise for profit purposes, whereby the insurer accepts the risk of the insured, on the basis that the insurance buyer pays the insurance premium for the insurance enterprise to pay. pay insurance to the beneficiary or indemnify the insured upon the occurrence of the insured event.
In terms of fundamental principles, Article 6 of the Law on Insurance Business 2000 (amended by Clause 2, Article 1 of the Law on Insurance Business, revised 2010) provides for the basic principles in specific insurance activities. as follows:
– Organizations and individuals with insurance needs may only participate in insurance at insurance enterprises operating in Vietnam; Foreign-invested enterprises and foreigners working in Vietnam who have insurance needs may choose to participate in insurance at insurance enterprises operating in Vietnam or use cross-border insurance services.
Insurance enterprises must ensure financial requirements to fulfill their commitments to the insurance buyers.
What is an insurance contract?
Pursuant to the provisions of Article 12 of the Law on Insurance Business 2000, specific insurance contracts are as follows:
An insurance contract is an agreement between an insurance buyer and an insurance enterprise, whereby the insurance buyer must pay a premium, and the insurance enterprise must pay insurance premiums to the beneficiary or indemnify the insured. insured upon the occurrence of the insured event.
Types of insurance contracts include:
- Personal insurance contract;
- Contract of property insurance;
- Contract of civil liability insurance.
- The marine insurance contract is applied in accordance with the provisions of the Maritime Code; for matters not provided for by the Maritime Code, the provisions of this Law shall apply.
– Matters related to insurance contracts not specified in this Chapter shall be applied in accordance with the provisions of the Civil Code and other relevant laws.
Laws on insurance contracts
Regarding the form
According to Article 14 of the Law on Insurance Business 2000, the specific form of an insurance contract is as follows:
The insurance contract must be in writing
Proof of entering into an insurance contract is an insurance certificate, insurance policy, telegram, telex, fax, and other forms prescribed by law.
Regarding the content
Article 13 of the Law on Insurance Business 2000 provides for the content of an insurance contract specifically as follows:
An insurance contract must contain the following contents:
- Name and address of the insurer, the policyholder, the insured, or the beneficiary;
- Objects of insurance;
- Amount of insurance, the value of the insured property for property insurance;
- Insurance coverage, insurance conditions, insurance terms;
- Terms of exclusion of insurance liability;
- Insurance period;
- Insurance premium rate and method of premium payment;
- Time limit and method of insurance payment or compensation;
- Dispute settlement regulations;
- Date, month, and year of contract signing.
In addition to the contents specified in Clause 1 of this Article, the insurance contract may have other contents as agreed upon by the parties.
Regarding the time of arising insurance liability
Based on Article 15 of the Law on Insurance Business 2000 (amended by Clause 6, Article 1 of the 2010 Amended Law on Insurance Business), specifically as follows:
Insurance liability arises when one of the following cases occurs:
– The insurance contract has been entered into and the insurance buyer has fully paid the insurance premium;
– An insurance contract has been entered into, including an agreement between the insurance enterprise and the insurance buyer about the insurance purchaser’s debt of premium;
– There is evidence that the insurance contract has been entered into and the insurance buyer has fully paid the premium.
– Regarding the exclusion of insurance liability, according to the provisions of Article 16 of the Law on Insurance Business 2000, specifically as follows:
– The insurance liability exclusion clause stipulates that the insurer does not have to compensate or pay the insurance premium when the insured event occurs.
The exclusion clause of insurance liability must be clearly stated in the insurance contract. The insurance enterprise must clearly explain to the insurance buyer when concluding the contract.
– The exclusion of insurance liability does not apply in the following cases:
- The insurance buyer unintentionally violates the law.
- The insurance buyer has a legitimate reason for being late in notifying the insurance enterprise of the occurrence of the insured event.
Failure to pay the premium in full and on time will void the insurance policy?
When the demand for insurance increases, many companies have been flexible in their premium policy, allowing participants to pay monthly/quarterly/yearly. However, because they do not really understand the obligation to pay premiums, many people do not pay the insurance premiums regularly to the company.
The Law on Insurance Business stipulates that if the insurance buyer fails to pay the premium on time, the insurer can extend the premium payment for a maximum of 60 days, in order to help the participants have time to prepare financially. During the renewal process, the insurance contract remains in effect, ie the buyer is entitled to insurance benefits if the risk occurs.
However, if the extension period expires but the participant has not yet paid the fee, the following two cases arise:
Firstly, the insurance contract is not refundable, which means the contract is void and the participant is not entitled to a refund of the premium paid.
Second, at the end of the premium payment extension period, but the participant has not yet paid the premium and there is no request to terminate the contract, the insurance company will deduct from the benefits, dividends and accrued interest. unwithdrawn accumulation (if any) of the contract. From here arise the following three cases:
– In case the premium for a period is larger than the value of accrued benefits, dividends and interest that have not been withdrawn, the outstanding premium will be automatically advanced from the cash value* minus debt (if any). ) of the contract, then the contract continues in force.
– If the cash value minus debt is still not enough to pay the premium for one insurance period, then the policy will automatically convert to a shorter premium payment period (but at least monthly) to continue to advance. from cash value minus debt (if any).
– If the cash value minus debt (if any) is not enough to pay the monthly premium, after the grace period expires, the contract will officially become invalid.
Related article:
- Regulations on insurance brokerage enterprises in Vietnam
- Procedures for setting up an insurance company in Vietnam
- Article 85 What are the highlights of Vietnam’s Law on Insurance Business?
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Frequently asked questions
– According to the Law on Insurance Business, the policyholder has the right to request the reinstatement of the contract validity within 2 years from the date the contract is invalidated. This is to maintain the protection interests of the participants, until the contract expires.
– Conditions for reinstatement of an insurance contract are specified in the Rules and Terms of the contract, including:
The participant/insured must submit a written request for reinstatement of the policy in writing and wait for the insurance company to consider it.
The time to restore the validity of the contract must be before the contract termination date.
The insured must provide proof of health condition and meet the insurance conditions as prescribed by the company.
Pay all overdue insurance premiums (up to the date the company accepts to reinstate the contract), unpaid debts and interest rates announced by the insurer.
– When there is a change that increases the insured risks, the insurance enterprise charges an increase in premium for the remaining period of the contract but the buyer does not accept it.
– The insurance buyer fails to take measures to ensure the safety of the insured object within the time limit set by the insurance enterprise for the purchaser to perform.
Conclusion: So the above is General provisions on insurance contracts in insurance business in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
