Cost of Inspection of Import and Export Goods Transported by

During the appraisal process, the appraiser must propose opinions and instruct the customer to take all measures to prevent and limit losses. At the same time, upon appraisal request, the appraiser may record additional costs and labor performed during the appraisal service in the minutes. However, the opinions and costs mentioned above during the appraisal process do not mean that the insurer accepts the loss that occurred under the insurance's responsibility and accepts the above service costs. For large, important and complicated losses, it is necessary to have the opinions of the collective and the leadership before making the appraisal minutes.

2.4. Provide appraisal report and collect appraisal fee.

After making the appraisal report, the appraiser must comply with the following regulations:

following:

- In principle, the appraisal report is only issued to those who request the appraisal. No appraisal content shall be disclosed to any agency or individual other than the agency or individual requesting the appraisal, except in cases where the person requesting the appraisal has agreed or the insurance company's leadership has permitted it.

- Documents related to all appraisals must be stored together with the appraisal report, unless they are borrowed documents that must be returned after the appraisal is completed. Documents that need to be used as evidence must be copied for storage before being returned.

- The issuance of additional appraisal reports to any other person must have the written agreement or authorization of the person requesting the appraisal and will incur additional fees if necessary.

- The correction of the appraisal report or data as requested by the person requesting the appraisal must be carefully considered. If this correction is due to the appraiser's own calculation or typing error in the appraisal report, this correction is a natural thing to do and the appraiser must correct it for the customer. If this correction is related to the issue of concluding the cause of the loss or the rate of trade discount, the appraiser must make the correct decision. Based on the documents provided by the appraiser during the appraisal, the insurance company and the customer can meet to negotiate the points that need to be corrected. If the two parties do not agree with the results of the new appraisal report, they can jointly hire another appraisal agency to conduct the appraisal and the party not satisfied with the appraisal results of the insurance company will bear the costs. This new appraisal result can be evidence to be included in the claim file for insurance compensation later.

- The appraiser must collect appraisal fees according to industry regulations and guidelines.

- Periodically, the surveyor must have a statistical report on the loss and assessment situation. Try to find out the main and frequent causes to propose measures to prevent and limit losses for future shipments to reduce compensation costs.

The characteristic of risks causing losses in insurance of import and export goods transported by sea is that they often occur in a very complicated manner, over a large area, causing a loss of a high value of goods, related to many subjects, fields and many practices and laws of many countries in the world, so the appraisal work encounters many difficulties and obstacles. This is not a problem unique to PJICO but is a problem for all insurance companies in the insurance market. Since officially coming into operation on June 17, 1995, PJICO has made many efforts to improve the effectiveness of appraisal work in general and of the insurance business of import and export goods transported by sea in particular. However, because this work requires the performer to have qualifications, practical experience and especially because the role of this work has not been properly assessed, in the first years of operation, the support of appraisal work for other stages in insurance business activities was not much, the appraisal work itself still had many limitations. In recent years, with the correct direction of the company's leaders and the efforts of appraisal staff, appraisal work at PJICO has had many positive changes and increasingly affirmed its role in insurance business activities. In recent times, appraisal work for import and export goods transported by sea at PJICO has been increasingly improved and has achieved encouraging results, clearly shown in the following data table:

Table 8: Cost of inspection of import and export goods transported by sea

sea route at PJICO from 1995-2000

Unit: Thousand VND

Target

Year

Self-assessment fee	Outsourced appraisal fee	Commissioned appraisal fee
1995	0	65.8573	0
1996	75,485	164,192	0
1997	92,617	181,795	0

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1998

165,588	127,682	17,215
1999	159,712	102,374	20,175
2000	238,642	77,593	33,656

Data source: Compensation Appraisal Department - PJICO. The above table shows: The cost of self-appraisal of import-export goods insurance business transported by sea at PJICO has not been

stopped increasing over the years. In 1995, because it had only been in operation for 6 months,

The last month of the year, so the arrangement of staff to work as appraisers has not been unified and some appraisers are still being sent for training to improve their qualifications in appraisal work, therefore the appraisal of damaged goods is completely delegated to intermediary appraisal companies, this cost is 65,873 thousand VND. Since 1996, business activities have been stable, however, the Compensation Appraisal Department has not been established to carry out its specialized duties and functions in the organizational structure of the company, but the officers of the Maritime Department and some functional departments have to concurrently undertake the appraisal of compensation for damaged import and export goods. Although the appraisal of imported and exported goods transported by sea at PJICO has achieved very positive results, showing that self-appraisal fees, entrusted appraisal fees have always tended to increase gradually over the years and outsourced appraisal fees have tended to decrease gradually, the establishment of a specialized department for compensation appraisal at PJICO is very urgent and necessary. As soon as it started operating, PJICO actively prepared in all aspects: human resources, appraisal technical equipment, training programs, practical training... and by 2000, the company's Compensation Appraisal Department was officially established and performed its functions by appraisal specialists. The results of the appraisal work in 2000 demonstrated the great role of the department: self-appraisal fees reached 283,642 thousand VND, 3.2 times higher than in 1996; Outsourced appraisal fees have decreased sharply over the years. If in 1996, outsourced appraisal fees accounted for 68.5% of total appraisal fees, by 2010, this rate was only about 22.2% and the entrusted appraisal fee reached 33,656 thousand VND, the highest since the company's establishment.

The business of insurance for import and export goods transported by sea as well as other insurance activities at PJICO are usually carried out in the following stages: exploitation, assessment, prevention and limitation of losses, compensation, and third party claims. Each stage plays a certain role in the entire insurance business process. At the same time, the quality and efficiency of each stage of operation

This stage has a direct impact on the remaining stages as well as on the results and business efficiency of the company. Therefore, the positive impacts or effects of the work of assessing import and export goods transported by sea on the remaining stages of the business process as well as on the results and business efficiency of insurance for import and export goods transported by sea at PJICO in the past time are very large, and cannot be listed in detail by numbers or figures.

With the results achieved, the appraisal work is increasingly affirming its great role in improving the efficiency of insurance business in general and insurance activities of import and export goods transported by sea in particular. However, due to the complexity of the work, up to now, the appraisal work of import and export goods transported by sea at PJICO still has many limitations that need to be actively improved:

- Conducting appraisals at PJICO still faces many difficulties because the company's system of branches and agents is not yet complete. Up to now, PJICO only has 9 company branches in some provinces and cities across the country: Ho Chi Minh City, Hai Phong, Da Nang, Can Tho, Quang Ninh, Quang Binh, Thua Thien Hue, Nghe An, Khanh Hoa, and only at these company branches does the company have the authority and staff to do appraisal work. Therefore, when risks occur in other areas, the branches still do not have close coordination with each other in appraisal work to achieve optimal efficiency.

- Appraisal is a very complicated job, especially in the import-export goods insurance business. The subjects of appraisal are import-export goods with very large value, a wide variety of goods, determining the cause and extent of loss is very difficult, the risk of loss often occurs, requiring the person performing the appraisal to have high professional qualifications and knowledge of many fields. On the other hand, because the company has just started operating, the qualifications and experience of the appraisers are limited, so this work has not yet met the needs in the company's business operations.

- Although the inspection of imported and exported goods transported by sea at PJICO in recent years has achieved many great results, there are still some problems that need to be overcome and improved in the coming time. The inspection fee that PJICO receives from outside commissions is still too low and almost non-existent. In 1995 - 1997, the company did not collect a single dong from this fee, from 1998 - 2000, it only collected a few tens of millions of dong, lower than

much more than Bao Viet which earns billions of dong and Bao Minh which earns hundreds of millions of dong a year.

- Although the practice of entrusting independent, intermediary appraisal organizations to carry out appraisal work when there is a risk of causing damage to goods is on the rise, not only for PJICO but also for most insurance companies in Vietnam today, investing in purchasing equipment for appraisal work, or focusing on training and improving the qualifications of appraisers is very necessary and important to promote internal strength to improve the overall business efficiency.

- Especially in cases where the company entrusts foreign appraisal organizations. PJICO not only has to bear the pressure of high appraisal fees but also has to bear the consequences of the lack of responsibility and timeliness of foreign appraisers during the appraisal process as well as in advising insurance customers to take effective measures to prevent and limit losses.

- Management and inspection of the activities of surveyors are not strict and not regular. In survey work, negative phenomena can easily occur to exploit insurance and cause damage to the company.

- The remuneration for appraisers has not really received due attention, there has not been appropriate and timely rewards for appraisers with good achievements. Therefore, there has not been any leverage to encourage them to work enthusiastically and complete their assigned tasks well.

3. Resolving claims for compensation in insurance for import and export goods transported by sea at PJICO.

In order to ensure the principle of enhancing the authority and responsibility of branches and at the same time serving customers quickly and effectively, PJICO has issued regulations on compensation decentralization. For company branches, the compensation decentralization limit that the branch is allowed to pay in import-export cargo insurance business is 15,000 USD or equivalent in VND/case. With the above-decentralized files, the branch must collect complete compensation files according to regulations, promptly make a report and have the unit's opinion sent to the company for consideration and settlement of compensation. In some cases, although the files are under the decentralization, within the scope of responsibility and authority of the company branch that is allowed to settle compensation, but in this process there are complicated circumstances, the branch must ask for the opinion of the company's leadership.

then be considered for compensation settlement. The process of settling complaints for compensation at PJICO is carried out in the following order:

3.1. Receive complaint records.

Includes two steps as follows:

Step 1: Receive documents - Documents for claiming compensation include:

- Insurance contract and additional terms and conditions if any (original)

- Maritime protest certified by local authorities where the loss occurred or the first port of destination if the incident occurred on an offshore voyage.

- Bill of lading (original)

- Purchase invoice (original)

- Minutes of appraisal by PJICO, PJICO's agent or appraisal organization authorized by PJICO (original)

- Packing list (original)

- Delivery documents from the port or competent authority.

- Notice of loss

- Complaint letter from the shipper

- Documents related to third parties (if the loss is related to the liability of a third party)

- Invoices/receipts of other expenses.

In addition, depending on each case, PJICO requires the claimant to present a number of other relevant documents to facilitate the process of assessing the application and considering compensation settlement accurately and fairly.

Step 2:Check the documents: Check if the above documents are complete and legal?

- Check the documents to ensure that they meet the complaint deadline as stipulated in the contract (if there are missing documents, additional documents must be requested within 30 days of the contract).

- Enter the order book to easily track arising transactions.

- Arrange and classify files in order of priority for resolution, files that are about to expire according to the contract, files on major losses.

- If the file is missing documents or papers that need to be supplemented, there must be a written request for additional documents and a deadline for supplementing them sent to the complainant.

3.2. Compensation consideration:

Includes 3 steps as follows:

Step 1:To determine the liability of insurance compensation, it is necessary to consider whether the loss is within the scope of the contract's liability or not? The following factors must be considered:

- Does the claimant have insurance benefits?

- Did the loss occur during the term of the contract?

- Does the loss violate any particular terms?

- Was the loss caused by excluded risks?

- Is the loss covered by the agreed insurance terms?

- In case the loss is not within the scope of PJICO's responsibility, PJICO will send an official dispatch to the complainant regarding the refusal of compensation, along with the reasons for the refusal.

Step 2:Calculate the compensation amount. If the loss is covered by insurance, the compensation officer must calculate the compensation level, prepare a report for the compensation hierarchy leader to review and give opinions on the compensation.

Step 3:Consider other costs that are the responsibility of the insurance such as costs of prevention and loss limitation, appraisal costs, transportation costs... requiring the above costs to be reasonable and in special cases must have the agreement and permission of PJICO.

3.3. Leadership:

- Prepare a report clearly analyzing the cause of the loss, the scope of insurance liability and how to calculate the compensation amount, clearly stating the reasons for accepting or refusing compensation. Reasons for increasing or decreasing the compensation amount compared to the estimated claim amount of the cargo owner. Request compensation in Vietnamese Dong or foreign currency.

- For large and complicated loss cases, after the draft report has been completed, it is necessary to send it to the Legal, Financial Accounting, Business Management and Market Department for comments before submitting it to the leadership for approval.

- Review the leader's opinion after approval, can supplement opinions or necessary documents if necessary, draft an official dispatch to the complainant to notify the compensation amount or refuse compensation.

- All complaints must be reviewed, approved and compensated according to

within the time specified in the contract is 90 days from the date of receipt of complete documents.

- For compensation cases below the level of hierarchy, branches proactively resolve compensation and are responsible for that compensation. After compensation, a notice must be sent to the company.

- For complaints for compensation in foreign currency, the compensation letter is made in 7 copies (1 copy sent to the complainant, 1 copy sent to the document office, 1 copy kept for business purposes, 2 copies sent to the financial accountant, 2 copies sent to the company with a notice of compensation for imported and exported goods according to PJICO's pre-printed form).

- For complaints requesting compensation in Vietnamese Dong, the compensation letter is made in 6 copies (1 sent to the complainant, 1 sent to the financial accountant, 1 kept in the business, 2 sent to the company, 1 kept in the branch office).

- For compensation cases above the hierarchy, it is necessary to send an official dispatch to the company for

have solution

3.4. Record keeping:

- All resolved compensation records must be entered into a book, classified by type of loss, insured risk and type of goods to have data for calculating fees and instructions for preventing and limiting losses.

- Enter the compensation book to track the number of arising records, the number of resolved compensation records, the number of disputed records, the number of pending records and the amount of compensation to avoid confusion, loss and delay in settlement.

- Completed compensation settlement files must be arranged in chronological order and by type of goods for storage (storage period is 5 years).

Note:After considering compensation, if the fault is related to the responsibility of a third party, the company will ask the complainant to make a power of attorney to file a complaint to demand compensation from the third party and collect related documents.

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