Vietnam: Draft decree proposes mandatory construction insurance
Source: Asia Insurance Review | Oct 2015
Project owners and contractors undertaking construction work will be required to purchase insurance for their work and workers, according to a draft government decree issued by the Ministry of Finance.
Compulsory construction insurance would be required in important national projects, large-scale complex construction works and works that may potentially affect community safety or the environment, and works subject to special technical requirements, reported Vietnam News citing the draft.
Contractors undertaking construction survey and design for construction works of a specified grade would be obliged to buy professional liability insurance, while construction contractors would have to purchase insurance for their construction workers.
The draft further sets detailed conditions for construction insurers and reinsurers. Specifically, a non-life insurer wishing to sell compulsory construction insurance must be licensed to provide asset and damage insurance.
Reinsurers’ equity must at least be equal to the legal capital, while their solvency margin must not be lower than the required minimum solvency level. Foreign reinsurers must have a rating of at least “BBB+” by Standard & Poor’s or Fitch, “B++” by A.M. Best, “Baa” by Moody’s or equivalent ratings, in the fiscal year immediately preceding the year of entry into reinsurance contracts.