Foreign customer “accuse” MIC of delaying insurance settlement

In the letter, Julie Sandlau Vietnam affirms that the company has strictly complied with the law on firefighting and fire prevention, as well as purchased a compulsory insurance package for fire and explosion at MIC under the contract No.275/16/HD-TS.1.1/05-KDBANCAS dated April 20, 2016 pursuant to the Ministry of Finance’s regulations.

After an unfortunate fire event on March 26, 2017, which caused heavy damage to the company, they sent the case file to MIC in accordance with Article 17 of Circular No.220/2010/TT-BTC. However, the insurance company still delays the settlement of insurance benefits.

“MIC has repeatedly requested us to provide a certificate of full conditions for firefighting and fire prevention that we cannot have as it was beyond our competency. Particularly, pursuant to Article 17(3) of Circular 220, insurance claim documents must include “A qualified certificate of full conditions for fire prevention and firefighting or a written and officially authorised document on full satisfaction of conditions for fire prevention and firefighting,” Pedersen said.

"Even though we have not been granted the certificate of full conditions for firefighting and fire prevention by competent fire prevention and firefighting agencies, we had fully certified documents which confirmed that the company had met all requirements for fire prevention and firefighting in accordance with the law. Also, we have never been notified that we were not qualified or received any kind of administrative fine in this respect,” he said.

After receiving the letter, VIR had arranged a talk with MIC about this case on October 11, 2017. Accordingly, MIC deputy general director Nguyen Duc Tuan said that the requirement to provide a certificate of full conditions for fire prevention and firefighting was meant to complete the insurance claim form, which would be used later as a basis for dealing with insurance compensation, and the company has never intended to raise any difficulties for its customer.

Previously, in the letter Tuan sent to JSV on October 6, 2017, the company clearly stated that as the customer did not have all the required documents, based on Article 17 of Circular 220 and the contract signed between the two parties, documents related to the certification of the time when its production facility had been put into operation needed to be submitted. Additionally, JSV requested the construction design for the building in line with the actual situation at the time of the loss.

According to Tuan, based on the search results of JSV’s enterprise code number on the national business registration portal, the company was established on March 16, 2010 and registered to do business in the field of jewellery manufacturing and a number of other activities.

However, it is still unclear when the company’s production facility was put into operation. Therefore, as said by MIC, the application of the law on fire prevention and firefighting to JSV shall be divided into two cases.

Regarding the first case, if JSV was put into operation before July 15, 2012, it would be subject to Decree No.35/2003/ND-CP, which requires compulsory documents on fire prevention and firefighting to be certified (as a ratified certificate of full conditions for fire prevention and firefighting) and officially stamped by competent authorities (as an approval for fire safety conditions) in accordance with Circular No.04/2004/TT-BCA.

In the second case, if the company was put into operation after July 15, 2012, according to Decree No.46/2012/ND-CP, JSV’s design conditions for fire prevention and firefighting must be approved by the fire prevention police department before going into operation. At the same time, the company must sign a written document as an official commitment with the fire prevention police department.

After receiving the above requirements, JSV said: “We are ‘foreign investors’. Competent authorities must be responsible for guiding and requesting foreign investors to comply with the regulations and the law of Vietnam. The fact that the authorities did not issue the “Certificate of full conditions for fire prevention and firefighting” for JSV was the decision of the fire prevention police department, and is not our responsibility.”

The representative of JSV added: “MIC’s arguments and inference of the regulations on fire prevention and fire fighting are not appropriate. If we commit any violations against the law, the authorities will impose the necessary punishments. MIC does not have the right or authority to attribute anything to the company and cannot invoke these conditions to refuse our insurance claim. Again, we ask MIC to quickly resolve the case to guarantee the best benefits for its customer."

JSV’s legal representative Truong Minh Cat Nguyen, director of TILA Insurance Agent Advisory Services Co., Ltd., said that MIC does not make a convincing case and JSV will continue sending further official responses to MIC in the future.

Answering the questions why MIC sold its compulsory insurance package for fire and explosion to JSV without asking for authorised certificates and why they did not refuse to sell the insurance from the beginning but only asking for the certificates after the damage had occurred, Tuan said that, pursuant to the law, customers who wish to purchase compulsory fire insurance packages must satisfy a number of requirements, including meeting relevant conditions for fire prevention and firefighting (as specified in Circular 220). Insurance companies can provide insurance packages to customers without forcing them to submit the above certificates.

“The customer said there was a written confirmation of full conditions for fire protection and firefighting. However, it was not in accordance with the form stipulated in Circular 66/2014/TT-BCA. In order to ensure that the compensation process complies with regulations, we have tried to work with the customer to arrange the best possible settlement,” said Tuan.

VIR will update readers with new information.