CIRCULAR

PROVIDING GUIDANCE ON THE INSURANCE POLICY STIPULATED IN THE GOVERNMENT'S DECREE No. 67/2014 / ND-CP DATED JULY 07, 2014 ON SEVERAL POLICIES ON FISHERY DEVELOPMENT

Pursuant to the Law on Insurance Business dated 2000, the Law on amending and supplementing a number of articles of the Law on Insurance Business and documents guiding the implementation;

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

Pursuant to the Government’s Decree No. 60/2003/NĐ-CP dated June 6, 2003providing instructions on the implementation of the Law on State budget;

Pursuant to the Government's Decree No. 67/2014 / ND-CP dated July 07, 2014 on several policies on fishery development ;

At the request of the Director of the Department of Insurance Management and Supervision;

The Minister of Finance promulgates the Circular providing guidance on the insurance policy stipulated in the Government's Decree No. 67/2014 / ND-CP dated July 07, 2014 on several policies on fishery development

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

This Circular provides guidance on the insurance policy stipulated in the Government's Decree No. 67/2014 / ND-CP dated July 07, 2014 on several policies on fishery development (hereinafter referred to as Decree No. 67/2014/NĐ-CP).

Article 2. Regulated entities

1. Insurers permitted to provide insurance under the provisions of Decree No. 67/2014 / ND-CP (hereinafter referred to as the insurers).

2. Organizations and individuals eligible for financial supports to purchase insurance under the provisions of Decree No. 67/2014 / ND-CP.

3. Agencies, organizations, and individuals relating to the implementation of insurance policy as prescribed in Decree No. 67/2014/NĐ-CP.

Chapter II

SPECIFIC PROVISIONS

Article 3. Principle of insurance provision

1. Provide insurance against all risks with the highest compensation within the limits on insurance scope and the insurance payout in accordance with the law on insurance business and the insurance contracts, except for of the risks on account of the policyholders and the insurance-profiteering behaviors.

2. Ship-owners are responsible for purchasing accident insurance for crew members working on ship and concluding accident insurance contracts with insurers.

3. Financial support to buy insurance is done through insurers under the procedures stipulated in Article 8 hereof after the insurance contract is concluded from which insurance liability arises.

4. Insurers shall provide insurance according to the rules, provisions, charges registered and approved by the Ministry of Finance.

Article 4. Requirements for insurers

Insurers must meet the following requirements:

1. Requirements for financial capability

a) Have at least VND 800 billion of charter capital and total assets of VND 2,000 billion at the end of the latest fiscal year.

b) Ensure the solvency margin in accordance with the law.

2. Requirements for enterprise administration

a) Have a system of exploitation, assessment, compensation of insurance for sailors; insurance for body of the ship, equipment and fishing gear (hereinafter referred to as fishing insurance).

b) Have reinsurance program in order to protect the fishing insurance program.

3. Requirements for the network of fishing insurance

Have branches in at least 10 central-affiliated cities and provinces where the ships are registered.

4. Requirements for experience of providing fishing insurance

a) Have at least 10 years of insurance operations, including at least 5 years of providing fishing insurance.

b) Have at least VND 15 billion of total revenue from premium of fishing insurance in the last 5 years.

5. Make commitment to compliance with the law and guiding documents of the Ministry of Finance.

6. Gain the approval of providing fishing insurance from the Ministry of Finance

Article 5. Applications and procedures for provision of insurance

1. The application for approval of provision of fishing insurance includes the following documents:

a) A written request for providing fishing insurance using the form provided in Appendix 1 enclosed with this Circular.

b) A copy of the documents showing that the conditions specified in Clause 2, Article 4 of this Circular are met and the Report on revenues, compensations for fishing insurance of the last 5 years recognized by the legal representative of the insurer.

2. Within five (05) working days from the date of receipt of a satisfactory application as prescribed in paragraph 1 of this Article, the Ministry of Finance shall make a written reply of approval or disapproval. In case of disapproval, the Ministry of Finance must clearly provide explanations.

Article 6. Entities eligible for financial support

1. Owners of offshore fishing vessels, offshore fishing logistics service vessels of which main engines have a total capacity of 90 CV or more fully meeting the following requirements:

a) Be members of fishing teams, cooperatives;

b) Have the Certificate of vessel registration, Certificate of technical safety issued by competent State agencies under the law;

c) Have license for fishery exploitation for offshore fishing vessels or the registration of offshore fishing logistics service vessels as prescribed by law;

d) Have applied for registration of crew members and obtained the roster of crew members issued by competent State agencies as prescribed by law;

dd) Gain the recognition of eligibility for financial support from People’s Committees of communes

2. The crew members working on vessels fully meet the requirements stipulated in Paragraph 1 of this Article.

Article 7. Support of the State

1. Funding levels provided by the State budget

The funding provided by the State budget supports the purchase of insurance for offshore fishing vessels, offshore fishing logistics service vessels which are members of fishing teams, cooperatives and of which main engine’s total capacity is 90 CV or more. To be specific:

a) Annual support which covers 100% of premiums of accident insurance for each crew member working on the vessel.

b) Annual support for premiums of insurance for body of the vessel, equipment, fishing gear on each vessel as follows:

- 70% of insurance premiums for vessels of which main engine’s total capacity is from 90 CV to less than 400 CV;

- 90% of insurance premiums for vessels of which main engine’s total capacity is 400 CV or more;

2. Funding

Funding is covered by the central budget and the local budget which is a part of the State budget. To be specific:

The central budget shall provide 100% of funding for provinces that are not able to self-balance their budget and Quang Ngai province;

b) The central budget shall provide 50% of funding for provinces less than 50% of revenues of which are transferred to the central government budget; the remaining 50% shall be covered by local government budgets;

c) The remaining localities shall use the local budgets to provide funding.

3. Support method

The State budget shall pay the premiums for fishing insurance for insurers (as prescribed) according to the procedures stipulated in Article 8 hereof.

Article 8. Applications and procedures for payment of premium for fishing insurance supported by the State budget

1. The application for payment of premium for fishing insurance supported by the State budget shall include:

a) A premium payment form provided in Appendix 2 enclosed with this Circular.

b) A confirmation of eligibility for financial support of People’s Committees of communes using the form provided in Appendix 3 enclosed with this Circular.

c) A list (enclosed with a copy) of Certificates of insurance issued to shipowners by insurers using the form provided in Appendix 4, Appendix 5 enclosed with this Circular.

2. Procedures for payment of premium for fishing insurance supported by the State budget

a) Within ten (10) days from the end of the month, insurers shall make the application for payment of premium for fishing insurance supported by the State budget specified in Paragraph 1 of this Article and submit to the Service of Agriculture and Rural development.

b) Within ten (10) days from the date of receipt of the satisfactory application as prescribed in Paragraph 1 of this Article, the Service of Agriculture and rural Development shall take charge and cooperate with the Service of Finance to complete the assessment and request People’s Committee in central-affiliated cities and provinces ( hereinafter referred to as provincial People’s Committees) for consideration and decision on payment of premiums for fishing insurance supported by the State budget to insurers.

c) Within ten (10) days from the date of receipt of the report of the Service of Finance, the provincial People’s Committees, the provincial functional agency shall complete the payment of all premiums for fishing insurance supported by the central budget and the local budget.

Article 9. Estimation

Estimation and use of budget shall comply with the Law on the State budget, guiding documents and guidance provided in this Circular.

1. At the time of annual budget estimate, based on the number of vessels, the list of crew members working on the vessels certified by the People’s Committees of communes; the Service of Agriculture and Rural development shall determine the funding needs for the implementation of fishing insurance policy (specifying the local budget that must be balanced and the central budget that are provided as prescribed) and submit to the Service of Finance for aggregate and reporting to the provincial People’s Committees along with the estimate of local budget expenditure under the provisions of the Law on State Budget submitted to the Ministry of Finance for aggregate in the annual state budget estimates as prescribed.

2. For 2014, the provincial People's Committee shall direct the relevant agencies to aggregate, anticipate the funding needs for the implementation of insurance policy, and report to the Ministry of Finance, the Ministry of Agriculture and rural Development for aggregate and submitting to the Prime Minister for consideration and decision on supporting localities.

Article 10. Estimate distribution, management and statement of funding

1. Estimate distribution

a) Every year, based on the estimates allocated by the Prime Minister, the Ministry of Finance shall add with objectives the central budget to the local budget used to implement the fishing insurance policy as defined in Decree 67/2014 / ND-CP and the guidance in this Circular.

b) Based on the estimates allocated by the Prime Minister and the self-balanced local budget: the Service of Finance shall take charge, cooperate with the Service of Agriculture and Rural development to make the plan for distribution of the funding, and report to the Provincial People's Committee requesting the People’s Council of the same level for consideration and decision on distribution of funding for implementation of insurance policy for fishing in the approved expenditure estimates.

2. Management and statement of funding

a) The provincial People’s Committees shall be responsible for management, use, and statement of funding with proper purposes and in accordance with the provisions of the Law on State Budget. At the end of the year, funding to support premium for fishing insurance that remains (if any) shall be transferred to the next year, localities are not allowed to use it for other purposes. In case of lack of funding in the year, the localities shall advance funding to pay for the insurers and send documents to the Ministry of Finance, the Ministry of Agriculture and Rural development for consideration and adding funding provided by the central budget (for the localities of which funding is provided by the central budget). The funding provided by the central budget that remains at the end of the time for implementation of fishing insurance policy (if any) shall be returned the central budget.

b) Funding to support the insurance premium in accordance with Article 5 of Decree No. 67/2014 / ND-CP shall be aggregated in the statement of the annual state budget expenditure of each budget level as prescribed by the Law on State Budget, documents guiding the Law, and the current State Budget Index.

Chapter III

RESPONSIBILITIES OF RELEVANT AGENCIES

Article 11. Responsibilities of the Ministry of Finance

1. Approve the provision of fishing insurance of insurers as prescribed in this Circular.

2. Distribute the budget for the implementation of fishing insurance policy as prescribed in this Circular.

3. Inspect and monitor insurers approved to provide fishing insurance; inspect and monitor the provision of funding.

4. Report annually to the Prime Minister on the situation and result of the implementation of fishing insurance policy.

5. Take charge and cooperate with the relevant Ministries, departments to summarize the implementation of fishing insurance policy.

Article 2. Responsibilities of the Ministry of Agriculture and Rural development

1. Direct State management agencies on fishery in the localities where the insurance is provided:

a) Direct the shipowners on registration of vessels, crew members, registration, applying for licensing fishing, regulations of degrees, professional certificates of crew members working on vessels and other legal regulations relating to fishing.

b) Provide guidance for the shipowners on participating in fishing teams, cooperatives, participating in fishing insurance in order to prevent unexpected risks.

c) Provide documents and papers relating to the valuation of vessels, equipment, and fishing gear participated in fishing insurance for insurers; determine the registered crew member working on vessels participating fishing insurance; determine the legality of diplomas, professional certificates of crew members provided for insurers by shipowners and other relevant documents in order to assist insurers to pay compensation quickly and conveniently.

2. Cooperate with the Ministry of Finance in aggregate the budget estimates supporting insurance premium under Decree No. 67/2014 / ND-CPA.

Article 13. Responsibilities of the provincial People’s Committees

1. Provide guidance for the shipowners on participating in fishing teams, cooperatives; direct the People’s Committees of communes and relevant competent agencies to quickly follow authentication procedures for establishment of fishing teams, cooperatives in order to enable eligible shipowners to participate in fishing insurance.

2. Direct the People’s Committees of communes to quickly follow procedures for certifying entities eligible for insurance support at the request of the shipowner. The certification shall comply with the form prescribed in Appendix 3 enclosed with this Circular.

3. Direct the People’s Committees of communes to notify the shipowners of unilateral termination of insurance contract of insurers after receiving the notification of termination of insurance contract of the insurers.

4. Direct relevant functional agencies to cooperate with insurers to provide guidance on participating fishing insurance for shipowners; provide documents related to the valuation of vessels, equipment, and fishing gear participated insurance; determine the cause of loss ... and the other relevant documents enabling insurers to pay compensation quickly and conveniently.

5. Direct the Border guard to provide documents related to the determination of the operation of the vessels, lists of crew members working on vessels and other relevant documents for insurers in order to enable insurers to pay compensation quickly and conveniently.

6. Direct the Service of Agriculture and Rural development to take charge and cooperate with the Service of Finance to assess the application for support and request provincial People’s Committees for consideration, decision on support as prescribed in Clause 2, Article 8 of this Circular.

7. Propagate the fishing insurance policy under Decree No. 67/2014 / ND-CP on local means of mass media

8. Quarterly, yearly, the provincial People's Committee shall prepare a detailed report on the support of fishing insurance premium using the form provided in Annex 6, Annex 7 enclosed with this Circular and send to the Ministry of Finance, the Ministry of Agriculture and Rural Development. The time to send the quarterly report shall be within 30 days after the end of the quarter; The time to send the annual report shall be 60 days after the end of the year.

Article 14. Responsibilities of insurers

1. Register provision of fishing insurance according to the guidance provided in Article 5 of this Circular.

2. Insurers shall cooperate in formulating regulations, terms, tables of fishing insurance premiums and register with the Ministry of Finance for uniform implementation.

3. Develop uniform operation processes for exploitation, assessment, and compensation of fishing insurance.

4. Cooperate with Vietnam National Reinsurance Joint Stock Corporation to design the fishing reinsurance to ensure financial security and provide reinsurance for Vietnamese insurers at maximum retention rate as prescribed by laws.

5. Provide the fishing insurance under the law on insurance business and the regulations, terms, charge tables approved by the Ministry of Finance.

6. Develop the information technology systems in order to prepare statistics, update, manage the provision of fishing insurance.

7. Propagate the fishing insurance policy.

8. Submit reports on the results of implementation of fishing insurance to the Ministry of Finance as follows:

a) Insurers must report to the Ministry of Finance monthly and annually using the form provided in Appendix 8, 9 enclosed with this Circular. To be specific:

- The time-limit for monthly report: 15 days after the end of the month at the latest.

- The time-limit for annual report: 90 days after the end of the fiscal year at the latest

b) In addition to reports mentioned above, insurers shall report extraordinarily at the request of the Ministry of Finance.

Chapter IV.

IMPLEMENTATION

Article 15. Effect

1. This Circular takes effect from its signing and is applicable from August 25, 2014.

2. Any problems arising during the implementation should be reported to the Ministry of Finance for consideration and settlement./.

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