Remove Obstacles of regulations on compulsory insurance for civil liability of motor vehicle owners

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Obstacles on policies and favorable mechanism

The compulsory insurance for civil liability of motor vehicle owners is stipulated by the Government in Decree No. 103/2008 / ND-CP dated 16 September 2008 (Decree No. 103/2008 / ND-CP). Decree No. 214/2013 / ND-CP dated December 20, 2013 amending and supplementing a number of articles of Decree No. 103/2008 / ND-CP. After 10 years of implementation, Decree No. 103/2008 / ND-CP, Decree No. 214/2013 / ND-CP and guiding documents have created a comprehensive, transparent and consistent legal corridor about compulsory insurance for civil liability of motor vehicle owners, creating conditions for car owners to participate in traffic.

However, according to the Ministry of Finance, the results of the implementation in the past also shows that with the compulsory insurance of civil liability of motor vehicle owners, problems still exist, in policies, regimes, work of Organization and implementation. Accordingly, the basic legal documents are the basis for the promulgation of these two decrees which have been replaced or amended, such as the Law on Organization of the Government, the Civil Code, the Law on Road Traffic and the Ordinance for handling administrative violations

In addition, relevant legal provisions including insurance business law, road traffic law have also been amended, supplemented and finalized in recent years. This fact leads to some contents of compulsory insurance policies for motor vehicle owners that are not suitable and not synchronized with the system of relevant legal documents.

In addition, some unspecified contents lead to different interpretations between insurance companies, between insurance companies and car owners and between relevant state management agencies, such as the extent of compensation (traffic accident or any accident caused by motor vehicles); In case of exclusion of insurance when drivers cause an accident and deliberately flee so as to not implement civil liability; the concepts related to the driver, the insured may cause difficulties because of arising dispute during the performance of insurance compensation ...

In terms of organization and implementation, the results of the implementation period shows that while the implementation of the compulsory insurance policy for car owners is quite good (estimated 90% of cars are undergoing insurance coverage), however compliance of motorbike owners is still low (about 40%).

It is noteworthy that the act of insurance fraud is increasingly sophisticated, complex, in many forms and takes place at almost every stage of the value chain in the insurance business. In some cases, the assistance of insurance agents, insurers, insurance fraud prevention and verification is becoming increasingly difficult.

In addition, the performance of Motor Vehicle Funds remains limited in relation to humanitarian assistance. Large humanitarian expenditures, accounting for 12% of annual funding, however, the number of supported families is very small, on average only 5 cases per year, but especially in 2012, the Motor Vehicle Fund could not cover any cases.

Therefore, the Ministry of Finance submitted to the Government for approval the development of the Decree on compulsory insurance for civil liability of motor vehicle owners in replacement of Decree No. 103/2008 / ND-CP, Decree No. 214/2013 / ND-CP.

Increase the level of contributions and expense levels

According to the Ministry of Finance, the development of an alternative Decree aims to overcome the shortcomings, constraints on mechanisms, policies and organization and implementation in the past, and ensure consistency and synchrony, and be consistent with the existing legal system, contributing to creating favorable conditions for motor vehicle owners, insurance enterprises, relevant ministries, departments and branches to implement the compulsory insurance for civil liability of motor vehicle owners.

At the same time, the Ministry of Finance also wants to improve the legal framework on compulsory insurance for motor vehicle owners, increasing the support for victims of traffic accidents and overcoming the consequences, helping car owner and victims to quickly stabilize their lives, activities and production and business activities, contributing to the social-security goals of the Party and the State.

Therefore, in the draft Decree, the drafting committee proposes to increase the contribution of insurers and increase the level of annual expenditures. Accordingly, in terms of contributions, specifying the maximum contribution of the insurer is 2% of the actual insurance premium income collected. Annually, based on the financial situation and use plans, the motor vehicle funds shall notify the specific charge levels to the insurance enterprises.

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Regarding spending contents and annual spending levels, the current regulations will be amended to additionally focus on humanitarian compensation for deaths caused by motor vehicle accidents at a rate of around 20 % of maximum compensation for damage to persons according to regulations and expenses for propagation and education; To adjust the ratio of spending contents to suit the orientation of using motor vehicle funds in the coming time. Accordingly, the contribution of insurance companies is 1% of the actual insurance premium income.

Regarding expenditure contents and annual expenditure levels, according to the current regulations, humanitarian assistance expenditures shall not exceed 15% of the total annual contribution to the Fund.