Business

Ministry to inspect insurers for motor insurance compliance

The Ministry of Finance will inspect four non-life insurance companies in 2024 to ensure adherence to mandatory motor vehicle insurance regulations.

A point of sale for motor vehicle insurance (Photo: VNA)
A point of sale for motor vehicle insurance (Photo: VNA)

Hanoi (VNS/VNA) - The Ministry of Finance will inspect four non-life insurance companies in 2024 to ensure adherence to mandatory motor vehicle insurance regulations.

The move follows concerns from voters in Lam Dong and Lang Son provinces about the effectiveness of motorcycle insurance and challenges in the claims process.

Voters have highlighted issues with the limited benefits from motorcycle insurance and have called for more transparency in the handling of insurance funds. Lang Son voters reported difficulties in claiming compensation for property damage and personal injury from motorcycle accidents, urging a reduction in bureaucratic procedures.

In response, the Ministry has highlighted the recent Decree No. 67/2023/ND-CP, effective from September 6, 2023, designed to simplify the claims process and improve insurance protection.

Statistics for the first half of 2024 show motorcycle liability insurance premiums generating 431.8 billion VND (17 million USD), with claims amounting to nearly 42 billion VND and reserves close to 36 billion VND. This reflects an improved payout rate compared to previous years.

Previously, the payout rate for motorcycle liability insurance was low, at just 6% in 2019 and 2.5% in 2021. Decree No. 67 allows a maximum premium reduction of 15% for vehicles with low claims histories, encouraging safer driving. Coverage limits have increased significantly, with premiums for motorcycles under 50cc set at 55,000 VND and maximum compensation at 150 million VND per accident, up from previous limits of 70 million VND to 100 million VND per person.

The decree requires insurance companies to establish 24/7 hotlines for accident reports, guidance and inquiries, with calls recorded to ensure compliance. Insurers must provide claim filing instructions within one hour of notification and conduct damage assessments within 24 hours. Compensation for health and life damages must be advanced within three working days, even if the full claim amount is not yet determined.

Additionally, the decree mandates the collection of necessary documentation from law enforcement in fatal cases and encourages the use of information technology in claims processing.

The Ministry of Finance said it will continue to monitor and enforce these regulations, with inspections focusing on compliance and strict penalties for violations. The Ministry will collaborate with relevant agencies to refine policies and address any issues to enhance the effectiveness of the requirements./.

VNA
#non-life insurance companies #motor vehicle insurance #transparency #insurance premiums
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