Hanoi lawfirm - Limit of insurant protection fund is VND 200 million per contract
This content is prescribed at the Circular No. 101/2013/TT-BTC guiding the management and use of insurant protection fund.
Accordingly, For life insurance contracts, the Fund shall pay for up to 90% of the liability of the life insurance companies, but the amount must not exceed 200 million VND/policyholder/contract. Where a life insurance contract covers multiple insurant, the maximum payment of the Fund is applicable to individual insurant, unless otherwise agreed by the insurant and the insurer in the insurance contract.
For compulsory vehicle insurance contracts, the Fund shall cover the whole liability of the insurer or branch within the insurance scope in accordance with current law; for contracts for other insurance services, the Fund shall pay up to 80% of the liability of the insurer or branch, but the amount shall not exceed 100 million VND/ contract.
The Fund shall be used to pay insurance money, surrender values, indemnity, and insurance premium refunds under insurance contracts when the insurer or branch is insolvent, or the insurer is bankrupt. The Fund shall only pay for the original insurance contracts and pay a lump sum for each claim for insurance money, surrender values, indemnity, and insurance premium refund.
Besides, the amount of money contributed to the Fund must not exceed 0.3% of the total revenue from insurance premium of original insurance contracts in the previous fiscal year of the insurer or the branch. The contribution amount shall be announced in writing by the Ministry of Finance before April 30 every year.This Circular takes effect on September 15, 2013.
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