ANNEXE I
INSURANCE LAW
CHAPTER 1
General Provisions
Article 1:
This law is enacted with the purpose of regulating insurance activities to protect the legitimate
rights of the parties to the insurance contract, to strengthen the supervision and control of the
insurance business and contribute to the development of the insurance industry.
Article 2:
This law shall apply to all insurance activities within the Kingdom of Cambodia.
Article 3:
The term “Insurance” as used in this law refers to the commercial contract whereby an
insurance applicant, as contracted, pay the insurance premium to the insurer, and the insurer
bears a liability to indemnify for property damage or loss caused by occurrence of possible
accidents or when the insured sustains death, bodily injuries, disabilities or sickness or when
the insured reaches the maturity agreed by both parties as specified on the insurance schedule.
Article 4:
Only insurance company, agent and broker are eligible to underwrite insurance business.
Article 5:
In carrying out the insurance business, insurance companies, agencies and brokers shall respect
the principle of fair competition in accordance with the provisions of this law.
Article 6:
Natural persons and legal entities who are allowed to conduct insurance business shall be
subject to the laws and regulations of the Kingdom of Cambodia.
Article 7:
The Ministry of Economy and Finance shall be responsible for the control and supervision of the
insurance business in accordance with this law.
CHAPTER 2
Insurance Contract
Section 1
General
Article 8:
Insurance which is beneficial to the insured natural persons or legal entities who have insurance
interest, whether life or non-life, over the subject matter shall be the subject of a contract
made only with insurance companies licensed to underwrite insurance business in the Kingdom
of Cambodia.
Article 9:
An insurance contract in Khmer language is an agreement whereby the relations of rights and
obligations of the insured and the insurer are enumerated.
An insured means a person who concludes an insurance contract with an insurer and undertake
to pay the insurance premium as contracted.
An insurer means an insurance company that concludes insurance contracts with the Insured
and bears the liability to indemnify and/or to pay the insurance benefit.
Article 10:
In making insurance contracts, the Insured and insurers shall respect the principles of fairness,
mutual benefit, and unanimity through negotiation and shall not harm the public interests.
Article 11:
In executing the insurance contract, each party shall have the rights to cancel the insurance
contract before expiration by a prior notification through a registered letter or letter of
notification duly acknowledged.
Article 12:
When the natural person or legal entity proposes an insurance policy and the insurance
company agrees to accept the proposal, and after an agreement on contract clauses are
reached, the insurance contract shall be deemed as concluded. The insurance company shall
then issue the insurance policy attached with the insurance certificate to the insurance
applicant. The insurance policy attached to an insurance certificate shall contain and specify
important terms and conditions agreed upon by both parties.
Article 13:
The insurance certificate shall contain the following particulars:
1. Full name and address of the Insured;
2. Person or subject matter to be insured;
3. Types of risks to be covered;
4. Commencement date and location of risk to be covered;
5. Insured value;
6. Insurance premium and method of payment;
7. Methods and conditions for declaration of risks;
8. Term of contract and period of coverage; and
9. Terms and conditions of nullification and forfeiture of rights under the insurance policy
and conditions allowing each party to terminate the insurance policy before the
expiration date.
Article 14:
Only the insurance policy or cover note specifies the mutual insurance between the insurance
company and the Insured. The insurance application shall not cover both parties.
A proposal for renewal, amendment or reactivation of the suspended insurance policy shall be
deemed approved if the insurance company has not refused such proposal within fifteen (15)
days.
Article 15:
The period of insurance contract is defined in the insurance policy. Any additions, modifications
to the original policy shall be made by an additional clause (endorsement) and signed by both
parties thereto.
Article 16:
The Insured shall have an insurable interest from the subject matter insured. An “insurable
interest” means an interest or benefit to which the Insured shall have the right in relation to the
insured subject matter.
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An “insured subject matter” means any property or benefits in relation to the property, life or
body of an individual.
Article 17:
After the insurance contract was concluded, the Insured shall pay the insurance premium as
agreed.
The coverage shall enter into force from the date of payment of the insurance premium by the
Insured as stated in the insurance policy.
Article18:
Any failure to make payment of insurance premium when due, the validity of coverage can not
be suspended more than thirty (30) days from the date the insurance policy is signed. The
insurance company shall notify through a registered letter or a letter duly acknowledged by the
Insured or person who is obligated to pay the premium to make payment at the agreed place
within twenty (20) days after the insurance contract is concluded. If the Insured still fails to pay
the premium within a period of ten (10) days after notification, the insurance company shall
have the right to cancel such insurance contract.
Article 19:
Any loss or damage arising out of the risks covered under the policy schedule shall be
indemnified by the insurance company. However, the insurance company shall not indemnify
for loss or damage caused by willful conducts or fraudulent acts of the Insured.
The insurance company shall also cover for loss or damage caused by persons being under
responsibility of the Insured, irrespective of the type or the seriousness of the case.
Article 20:
An insurance contract shall be deemed null and void if the insurance company has found that
the Insured had concealed the truth, or willfully misrepresented material facts which lead to
any change of the insured subject matter.
Forgetful, unintentional, and/or unclear declaration of the Insured shall not be a ground for
cancelling the insurance policy.
Article 21:
When it is found that the risk is intentionally created by the Insured, irrespective of the
settlement of the claim, and the insurance company has uncovered the fraud substantiated
with proofs and evidences, the insurance company shall have the rights to refer the case to the
court to void its liability or reclaiming back any settled amount.
Article 22:
The terms and conditions of coverage and any rights of the Insured specified in the insurance
policy shall be deemed null and void in the event the claim adjustor has uncovered the fraud
and the Insured had admitted to the wrongdoings.
Article 23:
In the liability insurance, if the insured causes loss or damage to a third party, the insurance
company will directly indemnify the victim.
The Liability insurance is a type of coverage whereby the indemnity must be made directly to
the third party being the insured subject-matter.
Article 24:
In the case of reinsurance, the principal insurance company still bears liability before the
Insured.
A reinsurance transaction is a system of insurance in which the principal insurance company is
insured by another insurance company that wholly or partially reinsured the risk accepted.
Article 25:
The Statute of limitation for claim settlement shall be provided for in the insurance policy.
However, the statute of limitation shall not exceed three (3) years from the date of occurrence
of risk.
The statute of limitation shall be terminated by the agreement of both parties, after the survey
report of the loss adjusters is finalized.
Section 2
Property Insurance
Article 26:
The Property insurance is a contract of indemnification when a risk occurs. The claim amount
paid by the insurance company to the insured shall not be over the value of the subject matter
insured as declared in the insurance contract, except otherwise agreed by both parties.
Article 27:
In the event of total loss of the subject matter insured caused by a risk which had not been
written in the insurance policy, then the insurance shall be legally terminated and the insurance
company shall refund the insured ninety percent (90%) of the insurance premium for the
remaining period.
Article 28:
When the insurance company has paid the claim, the Insured shall give the subrogation rights
to the insurance company to claim the third party that caused the damage and claim for refund
of the claim amount already paid. However, the insurance company cannot claim against the
descendants, heirs, relatives, manager or employees who are living in the residence of the
Insured, except for malicious acts caused by anyone of them.
Section 3
Individual Insurance
Article 29:
For individual insurance, the insured sum declared in the insurance policy is the maximum limit
of the compensation amount payable under the policy.
Individual insurance shall include life insurance, health insurance and physical injury insurance.
Article 30:
After payment for a claim, in the case of physical injury insurance, the insurance company may
not obtain any subrogation right from the contracting party or beneficiary for the purpose of
suing against any third party.
Article 31:
A person can purchase a life insurance for himself or for a third party subject to a written
approval of the latter and indicating the exact amount of the sum insured.
The following conditions shall invalidate an insurance policy in the case of death:
1) A person has a functional nervous disease.
2) A person who is hospitalized in a psychiatric hospital.
Article 32:
Other than the necessary terms and conditions specified in the insurance contract a life
insurance policy shall indicate the following:
1. Full name, date of birth of the applicant;
2. Full name of the beneficiary, if any;
3. Any events or terms providing for the refund of insurance premium; and
4. Conditions of exclusion if specified in the contract.
Article 33:
A life insurance policy shall be deemed null and void if the Insured commits suicide.
Article 34:
An insurance policy shall be voided against the beneficiary when the beneficiary intentionally
kills or conspires to kill the Insured.
Article 35:
Any dispute arising between the insurance company and the Insured which cannot be settled
through compromise or arbitration can be referred by both parties to the competent court in
the Kingdom of Cambodia.
CHAPTER 3
Compulsory Insurance
Section 1
Motor Vehicle or Third Party Liability Insurance
Article 36:
A natural person or legal entity owning and operating a commercial motor vehicle business on
the road shall required to buy from an insurance company a third party liability insurance policy
covering property loss or damage to third party arising out of the motor vehicle operation,
including all type of trailers.
This insurance policy shall cover the motor vehicle owner, the driver and the caretaker as well.
The type of commercial motor vehicles subject to compulsory insurance shall be defined by an
Anukret.
Article 37:
Any third party properly obeying the traffic rules and sustaining physical injuries or property
damages caused by the operation of any commercial motor vehicle shall be timely and properly
indemnified by the insurance company for losses or damages according to the degree of
damages.
Article 38:
The third party liability insurance shall not cover for losses or damages arising out of an event
occurring in a geographical area outside the Kingdom of Cambodia, unless otherwise provided
for in an agreement.
Article 39:
This insurance shall cover victims of traffic accidents who sustain physical injuries, disabilities or
death whether or not they were transported in the insured motor vehicle.
Section 2
Construction Insurance
Article 40:
A natural person or legal entity operating as building contractor shall be required to buy a
liability insurance policy.
At the commencement of project, the building contractor shall certify that he/she has
purchased a liability insurance policy from an insurance company.
The type of construction project subject to compulsory insurance shall be defined by an
Anukret.
Article 41:
Liabilities insurance contract issued pursuant to Article 40 of this law shall include the terms
and conditions indicating the insurance coverage period after the completion of construction
project.
Section 3
Insurance for Passenger Transport
Article 42:
A natural person or legal entity operating a passenger transport business using various means
of transport shall be required to purchase liability insurance covering passengers being
transported whether by road, sea, river, air or railroad.
The type of means of transport subject to compulsory insurance shall be defined by an Anukret.
CHAPTER 4
INSURANCE COMPANY AND STATE CONTROL
Section 1
Insurance Company
Article 43:
Every insurance company shall be registered in the Commerce Register and be subject to the
supervision and control of the Ministry of Economy and Finance.
Article 44:
No insurance company can delegate power of management, administration and liquidation role
to any person convicted of a crime such as theft, abuse of fiduciary, intentionally issue check
without provisions, effecting the State credit, fraudulent act, or concealment of items obtained
from illegal acts.
All punishments for attempts or conspiracy to commit the above crimes or all sentences to
imprisonment of at least one year shall be the ground of incapacity.
Article 45:
All insurance companies, whether state owned, private or mixed companies shall be allowed to
operate in the Kingdom of Cambodia only under the form of a public liability company.
Article 46:
Insurance companies can underwrite the following classes of insurance:
a. Life insurance company with a registered capital in Riel currency of at least equivalent to
five million (5,000,000) SDR based on the exchange rate on the date of the license
issuance;
b. General insurance company with a registered capital in Riel currency of at least
equivalent to five million (5,000,000) SDR based on the exchange rate on the date of the
license issuance;
c. Life insurance and general insurance company with a registered capital in Riel currency
of at least equivalent to ten million (10,000,000) SDR based on the exchange rate on the
date of the license issuance;
Article 47:
No insurance company mentioned below shall be allowed to conduct insurance business in the
Kingdom of Cambodia if it is:
a) Not authorized by the competent authority.
b) Not registered for any classes of insurance as provided under Article 46 of this Law.
Article 48:
Prior to commencement of the insurance business, the licensed insurance company shall fulfill
the following formalities as required by the Ministry of Economy and Finance:
Provide document or letter certifying that the deposit of 10 percent of the registered capital
has been deposited at the National Treasury of the Kingdom of Cambodia. This deposit shall be
maintained until the company ceases its business operation in the Kingdom of Cambodia.
Provide document or letter certifying that the solvency margin has been maintained at a
recognized bank in the Kingdom of Cambodia. This solvency margin shall be defined as per each
type of insurance company, but the minimum limit of solvency shall not be less than 50 percent
of the registered capital.
Section 2
State Control
Article 49.
The State control shall be conducted for the benefit of the Insured, applicant and beneficiary for the
purpose or capitalization.
State owned companies and mixed companies holding at least fifty one percent (51%) of state
shares shall comply with the Law on General Statutes of Public Enterprises.
Private insurance companies shall comply with the license granted by the Ministry of Economy
and Finance.
CHAPTER 5
Insurance Agent and Insurance Broker
Article 50:
An insurance agent is a natural person or legal entity who receives insurance commission from
insurance company and manages to handle the insurance business on behalf of the insurance
company under clearly specified mandate.
An insurance broker is a legal person who carries out insurance business for the benefit to the
Insured, providing intermediary services between the insured and the insurance company to
conclude an insurance contract and legally collect brokerage commission.
Article 51:
The formalities, terms and conditions for the activities of the insurance agent and broker shall
be defined by an Anukret.
CHAPTER 6
Penalties
Article 52:
Any person who violating Articles 36, 40 or 42 of this law shall be fined from one hundred and
fifty thousand (150,000) Riels to one million and five hundred thousand (1,500,000.00) Riels
and shall be required to buy insurance as well.
The exception in connection with the application of the above paragraph shall be set forth in a
Anukret in accordance with each type of motor vehicles and construction projects.
Article 53:
Any violation of Articles 44 or 48 of this law shall result to the imposition of fines from ten
million (10,000,000) Riel to fifty million (50,000,000) Riel and the revocation of the license.
Article 54:
Any person violating Article 47 of this law shall be fined in the amount of fifty million
(50,000,000) Riel. Any recidivism or subsequence offenses shall be subject to imprisonment
from one (1) year to five (5) years.
CHAPTER 7
Transitional Provisions
Article 55:
Any person conducting businesses as specified in Article 40 of this law shall be required to carry
an insurance policy from an insurance company no later than the 30th of June, 2001 after this
law enters into force.
Any person that carries out business as specified under Articles 36 and 42 of this law shall be
required to have insurance from an insurance company no later than the 31st of December,
2001 after this law enter into force.
The penalty specified in Article 52 of this law shall be applied after the two deadlines as
mentioned above have expired.
CHAPTER 8
Final Provision
Article 56:
Any provisions that are contrary to this law shall be deemed null and void.
ANNEXE II
Kingdom of Cambodia
National Religion King
Royal Government of Cambodia
– Ministry of Economy and Finance
– Ministry of Public Works and Transport
– Ministry of Tourism
– Ministry of Interior
No. 653 PRKr.SHV.SK.TC.MP Phnom Penh, 16th October, 2002
Inter-ministerial Prakas
On
Compulsory Motor Vehicle Third Party Liability Insurance
Ministries
Of
Economy and Finance – Public Works and Transport- Interior
Section: 1
An insurance company that writes compulsory motor vehicle third party liability insurance shall
be liable to settle insured claim arising from traffic accidents caused by the insured vehicle.
Section: 2
The following types of land vehicles must be covered by compulsory third party liability
insurance:
– All types of commercial motor vehicles carrying goods and passengers in the
Kingdom of Cambodia.
– All type of motor vehicles owned by a company, enterprise, or factory.
– Motor vehicles of Non-Government Organizations, International organizations and
association.
– Motor propelled or towed cement mixers.
– Motor tricycles used for the transport of goods or passengers.
Section: 3
Maximum compensation for Third Party Liability set as follows:
A/ For the vehicle with four wheels or more
– US dollars 5000.00 is minimum compulsory compensation for bodily injury or death
of third party per person
– US dollars 25, 000.00 is minimum compulsory compensation for bodily injury or
death of third party per accident
– US dollars 10, 000.00 is minimum compulsory compensation for damage of third
party’s property
B/ for the vehicle with less than four wheels
– US dollars 5000.00 is minimum compulsory compensation for bodily injury or death
of third party per person
– US dollars 12, 500.00 is minimum compulsory compensation for bodily injury or
death of third party per accident
– US dollars 5, 000.00 is minimum compulsory compensation for damage of third
party’s property
Section: 4
Vehicles owners who purchased compulsory motor vehicle third party liability insurance must
pay the insurance premium accordingly to the terms agreed to with the insurance company.
Insurance premium payment can be made in cash, check or account transfer. Once an accident
occurs, the vehicle owner or operator must immediately notify the insurance company. With
the period of 5 days at the latest from the date of the accident, the vehicle owner or operator
must provide written claim notice to the insurance company.
The insurance company shall, on behalf of vehicle owner or operator, indemnify accident
victims up to level of compensation agreeable to both parties and within the limit of the
insurance policy or cover note.
Section: 5
Under the compulsory motor vehicle third party liability insurance the insurance company shall
not be liable provided that:
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– The driver does not have a valid license for the type of vehicle being operated.
– The driver is actually drunk and found to have 80 grams or more of alcohol from 1
litter of blood or is under drug intoxication based on and expert medical or hospital
report attached with the insurance company’s claim report or a provincial, municipal
land traffic police report.
– The loss concerns passenger and the owner or operator failed to have the required
compulsory passenger liability coverage.
– The Department of Financial Industry of the Ministry of Economy and Finance
certified the insurance policy is illegal
Section: 6
All insured vehicles must have insurance stickers stuck on the front windscreen of the
insured vehicle. The stickers must identify the insurers and indicate the expiration date of the
insurance.
Section: 7
The insurance company shall have the following duties:
– To cooperate with the Department of Financial Industry of the Ministry of Economy
and Finance to develop a public education and advertisement programs so that all
the vehicle owners are informed about and purchase the compulsory motor vehicle
third party liability insurance required.
– To settle claims and indemnify the victims on behalf of the insured vehicle owner or
operator within ten (10) days, at the latest, after having received the completed
claim documents, traffic police report unless the insurer find out that no insurance
coverage exists or the compensation is not reasonable.
– To produce reports and statistics concerning insurance business to the Department
of Financial Industry of the Ministry of Economy and Finance.
– To provide notice to the appropriate Ministry of Transport and the Ministry of
Economy and Finance that issued the owner operator’s license whenever any
required compulsory motor vehicle third party liability insurance is cancelled by the
insurer for non-payment of the premium or for some other breach of the insurer’s
obligation
– To develop and educate driver on traffic accident prevention
Section: 8
Once a traffic accident occurs
– The parties involved in the accident shall make a written report to the insurer
indicating the cause of the accident.
– In case an agreement cannot be reached, the parties in dispute shall have to seek
Intervention from the traffic police so that they can investigate the cause of the
accident
– The provincial and municipal land traffic police shall have to make report of its
accident investigation and properly draw up a sketch of the accident scene and
submit them to the insurance company within 48 hours from the date of the
accident so That the insurance company may have a basis for settling the claim and
determining the losses within policy coverage.
– Should the accident take place in a remote are without available traffic police, the
vehicle owner or driver must contact the competent territorial police, and ask them
to certify the accident report.
– In case that the insured vehicle is suspended by traffic police, the vehicle will be
release after receiving formal letter from insurer which is allowed to operate in the
Kingdom of Cambodia
Section: 9
Upon granting any new license or renewal thereof to owners or operator of all types of vehicles
listed in Section 2, the General Direction of Transport or Provincial-Municipal department of
Public Works and Transport shall require evidence that the vehicle owner or operator has
purchased the compulsory motor vehicle third party liability insurance .Owner or operators
holding existing license for vehicles requiring compulsory motor vehicle third party liability
insurance when this Prakas goes into effect shall have 60 days to furnish the General Direction
of Transport of Provincial-Municipal Department of Public Works and Transport with evidence
of the required insurance. If the vehicle owner or operator fails to get the required insurance
the foresaid authorities shall temporarily suspend the applicable license and technical
certificate until the vehicle owner or operator can provide evidence of the required insurance.
Section: 10
The provincial and municipal land traffic police must strictly check to see that all vehicles
required having compulsory motor vehicle third party liability insurance have a valid insurance
sticker stuck on the front windscreen in order to find out which vehicles do not comply with this
requirement. In case that a vehicle is found not covered under this obligatory insurance, the
owner or operator shall be subject to a fine as stated in article 52 of the insurance law. The
traffic police must:
1. fine and instruct the vehicle owner to buy insurance within 7 days at least
2. suspend transportation operation permission and technical certificate in case that the
owner does not accept the above instruction
3. if still not accepted, the vehicle is temporally suspended until the owner can provide
third party liability insurance certificate on time
Section: 11
The Ministry of Public Works and Transport shall inspect technical certificates and transport
license of every motor vehicle in order to keep order and traffic safe on the public roads.
The Ministry of Tourism shall be responsible for inspecting owner’s document and means of
transport for their clients and ask for valid insurance and also be responsible for issuing tourism
license and educating tourist industry on compulsory insurance for their client to make sure all
the insurance agent use transportation means with insurance.
If the owner fails to provide compulsory insurance, he will be fined as stated article 52 of
insurance law and the tourist license will also be suspended.
The Ministry of Interior is responsible for pushing all type of vehicle owner to have technical
inspection and insure that they apply for transport license at the Ministry of Public Works and
Transport in a bid to prompt vehicle owner or operator to have third part liability insurance in
the Kingdom of Cambodia.
The Ministry of Economy and Finance shall be responsible to supervise and push for a prompt
and fair claim settlement to victims injured by the insured vehicle.
Section: 12
Any regulation contradicting this inter-ministerial Prakas shall be deemed null and void to the
extent of such contradiction.
Section: 13
All concerned authorities or organizations relating to these four Ministries shall respectively
and affectively implement this Prakas from the date of its signature