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Monday, May 16, 2022

Risk insurance proposed for homebuyers

The Saigon Times

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HCMC – The HCMC Real Estate Association (HoREA) has proposed issuing regulations on risk insurance for homebuyers to ensure customers benefit.

The association said in its proposal sent on March 8 to the Standing Committee of the National Assembly as part of feedback to a draft amended Law on Insurance Business, stressing that it was necessary to add regulations on property investors’ financial obligations.

Insured customers might be paid if real estate investors fail to hand over homes as scheduled and committed, the local media reported.

Clause 1 of Article 56 in the 2014 Law on Property Business stipulates that before selling or leasing a home project, investors must guarantee their financial obligations to customers via capable commercial banks.

This is a mandatory regulation. HoREA, however, said that guaranteeing financial obligations is not enough, so it is vital to provide homebuyers with risk insurance, meaning that insurers must cover risks facing insured customers if investors fail to hand over homes as committed.

Besides, HoREA also proposed reinstating a regulation allowing insurers to purchase corporate stocks and bonds and exchange-traded funds, contribute capital to other firms and invest in real estate projects in line with the Government’s regulations as stipulated in Clause 2 of Article 98 of the 2000 Law on Insurance Business.

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