Lesson 2: Continuing the pilot program for agricultural insurance

(Baonghean) - With an increasingly完善 legal framework, the Vietnamese insurance market is currently being supplemented with many new products and services, increasing the competitiveness of market participants and aligning with international practices.

Notably, the Ministry of Finance will continue to accelerate the implementation of the insurance policy under Decree 67/2014/ND-CP to help fishermen venture out to sea and protect the sovereignty of the nation's maritime territories. This policy is currently being implemented in 21 out of 28 provinces. To date, 30,428 crew members and 2,555 vessels have been insured, with a total insured value of 6,309 billion VND.

By participating in agricultural insurance, farmers can produce with peace of mind. Photo: PH

To address the difficulties and obstacles, the Ministry of Finance issued Circular No. 97/2015/TT-BTC dated June 23, 2015, which amends Appendix 3 attached to Circular No. 115/2014/TT-BTC of the Ministry of Finance, removing the content regarding the verification of vessel value and the vessel value verification form of the People's Committee at the commune level; closely monitoring the implementation situation in each locality to provide appropriate and timely solutions, ensuring that the implementation of this insurance policy yields high efficiency - said Nguyen Quang Huyen, Deputy Director of the Insurance Management and Supervision Department.

Furthermore, in line with the Government's policy of continuing the agricultural insurance program under Decision 315/QD-TTg, after three years of implementation in 20 provinces and cities (65 districts, 748 communes), 304,017 households participated in the insurance program. The insured value of crops, livestock, and aquatic products was 7,748 billion VND, and the compensation amount was 713 billion VND, contributing to the implementation of Resolution No. 26-NQ/TW of the 10th Central Committee of the Communist Party of Vietnam on agriculture, farmers, and rural areas. Following the Prime Minister's directive to continue implementing agricultural insurance and expanding livestock insurance in Ha Giang, based on the opinions of the Ministry of Agriculture and Rural Development, the Ministry of Finance is drafting a Decision to continue the pilot implementation of agricultural insurance (with the expansion of livestock insurance in Ha Giang).

Promote the implementation of mandatory insurance schemes.

Among various types of insurance, two forms are mandated by the Government: civil liability insurance for motor vehicle owners and fire and explosion insurance. In early 2015, the Insurance Supervision and Management Department of the Ministry of Finance and the Fire Prevention and Rescue Police Department of the Ministry of Public Security signed a cooperation program to promote the implementation of mandatory fire and explosion insurance. This cooperation program aims to raise public and social awareness of the importance of mandatory fire and explosion insurance, while also strengthening coordination in implementation, information sharing, policy training, and resolving legal procedural difficulties in the implementation of mandatory fire and explosion insurance to ensure greater effectiveness – said Deputy Director Nguyen Quang Huyen.

Furthermore, the authorities have also increased the benefits for road users in implementing the mandatory civil liability insurance scheme for motor vehicle owners. It can be said that mandatory civil liability insurance for motor vehicle owners has made significant contributions to the implementation of social security policies. Accordingly, all road users who unfortunately suffer accidents are supported and compensated through mandatory civil liability insurance for motor vehicle owners as stipulated in Government Decree 103/2008/ND-CP. Currently, the liability limit for personal injury is 70 million VND per person per accident; the liability limit for property damage is 40 million VND per accident caused by motorcycles and scooters, and 70 million VND per person per accident caused by cars.

Given the rising prices and costs, this level of insurance coverage is insufficient to ensure the financial security and stability of life and business for accident victims (or their families) in the event of unforeseen risks. Therefore, it is necessary to study increasing the insurance liability limit. The Insurance Supervision Department, in coordination with the Traffic Police Department, the Vietnam Transport Association, transport cooperatives, the Vietnam Insurance Association, and insurance companies, organized a workshop to exchange, discuss, and specifically evaluate proposed amendments and additions to the current policy, aiming to increase the liability limit for personal injury to 100 million VND. Simultaneously, administrative procedures should be streamlined to facilitate insurance companies in collecting accident reports from police agencies and medical records from hospitals to expedite compensation for vehicle owners and victims – commented Nguyen Kim Bang, General Director of Bao Viet Insurance.

Continue to issue insurance policies and mechanisms.

Besides strict and transparent management and supervision to facilitate the development of various insurance types, the insurance regulatory agency is currently researching and introducing new product types to the market such as insurance for investment and construction activities, retirement insurance, microinsurance, natural disaster insurance, nuclear energy insurance, tax policies, etc. In the registration and approval of new insurance products, there are currently 27 new life insurance products and 7 amended and supplemented products; in the non-life insurance sector, the registration of adjustments to the rules, terms, and premium rates for motor vehicle physical damage insurance of 25 out of 25 companies has been approved; and health insurance products of 7 companies have been approved,...

In addition, the Ministry of Finance continues to promote the restructuring of insurance companies according to Decision 1826/QD-TTg of the Prime Minister. Based on the criteria stipulated in this Decision and the audited financial statements of insurance companies, the Ministry of Finance has classified insurance companies for 2014. As of the end of May 2015, 46 out of 47 insurance companies met the requirements for financial safety and solvency, with only one insurance company undergoing restructuring (to meet the charter capital requirements) to comply with regulations and achieve business results according to plan. The Ministry of Finance regularly monitors and urges insurance companies to implement self-assessment and ranking according to Circular 195/2014/TT-BTC guiding the assessment and ranking of insurance companies, in order to promptly handle or compile reports for competent authorities. Simultaneously, it continues to improve system safety, operational efficiency, and competitiveness (strengthening and reorganizing the structure, expanding operations, improving financial and business capabilities, enhancing the application of information technology, etc.), promoting insurance business activities (developing products, distribution channels, etc.), and strengthening corporate governance (divestment, strengthening management, supervision, and operation...).

At the same time, relations and cooperation between the Ministry of Finance and other ministries and agencies such as the Government Office, the National Assembly Office, the Ministry of Justice, the Ministry of Public Security, the Ministry of Agriculture and Rural Development, and localities, especially international cooperation with IAIS, ASEAN, WB, ADB, FSA, and FSS, are becoming increasingly substantive in the fields of personnel training, technology transfer, management, supervision, information, communication, promotion, financing, and support for targeted insurance programs such as agricultural insurance, disaster insurance, nuclear energy insurance, and export credit insurance; Building policy mechanisms/legal frameworks... Information dissemination, propaganda, and legal education, raising public awareness of the meaning and necessity of insurance in socio-economic life are carried out promptly and diversely in many forms and for many different target groups (information for the Government, relevant ministries and agencies, insurance companies and the people) - affirmed Phung Ngoc Khanh, Director of the Insurance Management and Supervision Department.

Red River