Why didn’t the Ministry of Finance decide earlier to change the requirement of a civil liability insurance policy for drivers laid down in Decision No 23/2003/QD-BTC?

Since the mandate was carried out, the requirement that drivers hold civil liability insurance has been in need of reform to make it in tune with reality. For example, the insurance payouts for individual and property damages are still lower than the compensation needed for accident victims. The method of defining the damage compensation level still has inefficient administrative procedures which leads to unfair situations, like excessively long waits for compensation.

The implementation of the insurance requirement for drivers still faces problems. For one, there are not enough places to sell insurance. What’s more, the process of dealing with insurance compensation is complicated and requires drivers to have a lot of papers in their vehicle at all times.

The co-operation with relevant agencies to carry out Decision 23 has not been good enough, nor have violations been dealt with strictly enough. As a result, drivers buy insurance to get through police’s checks not because it actually benefits them. Insurance buyers don’t understand their responsibility to carry insurance, and in fact only 30-50 per cent of motorbike drivers have it.

What does the Ministry of Finance expect from Decision 23/2007/QD-BTC?

The required insurance policy is for the benefit of the community as well as the individual, to protect the rights of every driver. In most countries civil liability insurance to compensate for vehicle damages is compulsory.

The Ministry of Finance expects that the new policies will solve past problems, but only time will tell. With the motto of simplifying administrative procedures and increasing the protection of the rights of those who’ve suffered accidents, the major problems of the old Decision 23 will at least be addressed in the new Decision 23.

Although publicity for insurance have been carried out in recent years, its effectiveness remains low. How will these problems be sorted out with the new decision?

According to the new decision, the Viet Nam Insurance Association has offered to set up a fund to publicise traffic safety. The fund will spend 2 per cent of the total required civil liability insurance fees on this.

First, the fund will co-operate with the National Committee for Traffic Safety, the Traffic Police Department and other relevant agencies to educate people about traffic safety and civil liability policies. Second, the fund will assist vehicles with road signs warning about dangerous areas and other materials. Third, it will assist accident victims in cases in which determining fault is impossible and, finally, it will reward individuals, companies and other groups who successfully preventing traffic accidents.

You said the new civil liability insurance requirement would increase compensation for vehicle damages. Can you elaborate?

For motorbike damages, the insurance compensation payments will be a maximum of VND30 million per person, as they are now. Car compensation rates for damages will increase by 67 per cent while insurance fees will be 50 per cent higher.

Why is only the responsibility for car increased and not motorcycle?

At present, motorbikes account for 95 per cent of registered motor vehicles. If we increased the responsibility of motorbike drivers with higher insurance fees it would affect the vast majority of drivers. Therefore, the new Decision 23 will keep the same level of insurance compensation and fees as the old Decision 23.

But for car drivers, the rate of insurance ownership is at 80 per cent and the compensation rate remains too low, so it will be increased.