Nation –Religion –King






Preah Bat Norodom Sihanouk, King of the,


– Having seen the Constitution of the Kingdom of Cambodia:


– Having seen Reach Kram No. NS/RKT/0399/01 of March 08,1999 promulgated the  Constitutional law on the amendment of Articles 11, 12, 13, 18, 22, 24, 26, 28, 30, 34, 51,90, 91, 93, and Articles of Chapter 8 through Chapter 14 of the Constitution of the Kingdom of Cambodia;


– Having seen Reach Kram No. 02/NS/94, date July 20,1994, promulgating the Law on the  Organization and Functioning of the Council of Ministers;


– Having seen Reach Kram No. NS/RKM/0196/18 of January 24, 1996 promulgating the Law on the Establishment to the Ministry of Economy and Finance;


– Pursuant to the proposal of the Samdech Prime Minister and the Senior Minister and  Minister of Economy and Finance:




Hereby Promulgate


The Insurance Law enacted by the National Assembly on the 20th of June 2000 at its 4th  Plenary session of the 2ndlegislature and entirely approved by the Senate on its form and  legal concepts on the 6th of July 2000 at its 3rd plenary session of the 1st legislature and include the following provisions:








General Provision



Article 1:


Law is enacted with the purpose of regulating insurance protecting the legitimate  rights of the parties to insurance strengthening supervision and control over the insurance business and contributing to the development of the insurance



Article 2:


This law shall apply to all insurance activities within the.



Article 3:


As used in this law, the term “Insurance” refers to the commercial contract whereby an Insurance applicants 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, physical injury, disability or sickness or when the insured reaches the maturity being agreed by both parties as specified on the insurance




Article 4:


Only insurance company, agent and broker are eligible to carry out insurance business. Article 5:

In carrying out the insurance business, the insurance companies, agencies and brokers have  to follow the principle of fair competition in accordance with the provisions of this law.



Article 6:


The natural persons and legal entities whose mandates are to conduct insurance business  shall be require to respect law and regulations of the.



Article 7:


The Ministry of Economy and Finance is responsible for the control and supervisions over  Insurance business in accordance with this law.






Insurance Contract


Section 1





Article 8:


Insurance which is beneficial to the insured natural persons or legal entities who have insurance interest against whether o not life risks shall enter into the contract only with the insurance companies licensed to carry out insurance business in the.



Article 9:


An insurance contract in khmer language is an agreement whereby the relations or rights and obligations of the insured and  the insurer are enumerated.


The “Insured” means a person who concludes an insurance contract with an insurer and  undertake to pay the insurance premium as contracted.


The “Insurer” means an insurance company that concludes insurance contracts with the  Insured and bears the liability to indemnify and/or pay the insurance benefit.



Article 10:


In making insurance contracts the Insured and Insurers shall follow the principles of fairness  mutual benefit, and unanimity through negotiation and shall not harm the public interests. Article11:

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  with a duly acceptance.



Article 12:


When the natural person or legal entity proposes for insurance and the insurance company agree 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 policy attached with the insurance certificate to an insurance applicant. The insurance policy being 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 item ( 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)            Certain methods and conditions for declaration of risk;


8)            Term of contract and period of coverage; and


9)            Terms and conditions about nullification and loss of rights to the insurance policy and conditions that allow each party to terminate the insurance policy before the expiration date.





Only the insurance policy or cover note which specifies the mutual insurance between the  insurance company and the Insured. The insurance application shall not be authentic to both parties.


The proposal for renewal, alteration or reattachment the suspended insurance policy shall be 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 additional  modifications or to the original policy shall be made by an additional clause (endorsement) and signed by both parties thereto.


Article 16:


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 insured subject matter.


The “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 the insurance premium has been by the  Insured as stated in the insurance policy.





Any failure to make payment of insurance premium when it is due, the validity of coverage  cannot 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 with duly acceptance 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. After notification, if the Insured still fails to pay the premium within a period of ten (10) days, the insurance company shall have the right to cancel such insurance contract.



Article 19:


Any loss or damage arising out of the risks covered by the policy schedule shall be indemnified by the insurance company. However, the insurance company shall not indemnify the loss or damage caused by willful conducts or fraudulent of the Insured.


The insurance company shall also cover the loss or damage caused by person being under responsibility of the Insured, whatever type or how serious is the case may be.



Article 20:


An insurance contract shall be deemed null and void if the insurance company has found that the Insured have concealed the truth, or willfully misinterpreted the fact which leads to any change of subject matter of the Insured risk.


The forgetfulness or unintentional and unclear declaration of the Insured shall not cause a cancellation of the insurance. Article 21:


If it is found that risk is intentionally created by the Insured, whether the claim is already               settled or remain unresolved, in the case that the insurance company has found the fraudulent or made­up risk and produced proof and evidences, the insurance company shall have right to refer the case to the court to void its liability or claiming back the settled amount.



Article 22:


Terms and condition of coverage and any rights of the Insured specified in the insurance  policy shall be deemed null and void in the case that the arbitrator has found that the Insured had committed any wrong and admitted by it latter.



Article 23:


In the liability insurance, if the Insured causes any loss or damage to the third party, the  insurance company was directly indemnity such third party victim.


The liability insurance is the type of coverage whereby the indemnity must be made directly  to the third party who  the subject matter of insurance.



Article 24:


In case of reinsurance, the principal insurance company still bears liability before the Insured  Another insurance company that wholly or partially reinsured the accepted.



Article 25:


Statute of limitation for the claim settlement shall be provided in the insurance policy.  However, the statute 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 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 ninety (90%) of the insurance premium for the remaining period.


Article 28:


Then 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, ancestors relatives, manager or employee who are living in the residence of the Insured, except such malicious case caused by anyone of these persons.



Section 3


Individual Insurance


Article 29:


The insured sum declared in the insurance policy is the maximum limit of the compensation amount payable for individual insurance.


The individual insurance shall include life insurance, health insurance and physical injury insurance. Article 30:

After payment for the claim, in case of physical injury insurance, the insurance company may not clam for any subrogation from the contracting party or beneficiary for the purpose of making a complaint against the third party.



Article 31:


A person can make a proposal for his/her life insurance or for a third party subject to a written  approval of the latter and with the clear declaration of the sum insured.


The following conditions are not eligible for the insurance in case of death:


1)            A person has functional nervous disease: and


2)            A person who is being hospitalization in a psychiatric hospital. Article 32:

Other than necessary terms and conditions specified in the insurance contract the  life insurance policy shall indicate as follow:


1)            Full name, date of birth of the applicant


2)            Full name of the beneficiary, if any,


3)            Any events or terms providing about refunding of insurance premium; and


4)            Condition of exclusion if specified in the contract Article 33:

The life insurance shall be deemed null and void if the Insures commits suicide. Article 34:

The insurance policy shall be voided for the beneficiary when the beneficiary intentionally  kills or colludes to kill the Insured.



Article 35:


Any dispute arising between the insurance Company and the Insured which cannot be settled through the compromise or arbitration, both parties can refer the case to the competent court.






Compulsory Insurance


Section 1


Motor Vehicle or Third Party Liability Insurance


Article 36:


The natural or legal person who owns motor vehicle owner but also the driver and the caretaker as well. The type of commercial motor vehicle which is required to be insured shall be defined in the Sub­decree.



Article 37:


The third party liability who property obey the traffic rules and sustain a physical injury or property damage caused by the operation of commercial motor vehicle shall be timely and property indemnified by the insurance company for loss or damage according to the degree of damage.



Article 38:


The third party liability insurance shall not be applied to loss or damage out of an event occurred outside the geographical area of the unless there is an agreement provide otherwise.



Article 39:


This insurance shall be applied to the victim of the traffic accident who sustains physical Injury, disability or death whether this person being transported in the insured motor vehicle.



Section 2


Construction Insurance


Article 40:


A natural person or legal entity, who is the constructor shall be required to buy liability insurance.


At the commencement of project where an insurance is compulsory shall be defined in a  Sub­decree.



Article 41:


The insurance contract on liabilities in accordance with Article 40 of this law shall include the  terms and conditions which indicate the insurance period after the completion of construction project.



Section 3


Insurance for Passenger Transport


Article 42:


A natural person or legal entity who operates the passenger transport business by various transport means shall be required to purchase liability insurance for passengers being transported on their own means of transport by road, sea, river, air, or railroad.


Type of means of transport where an insurance is compulsory be defined in s Sub­decree.





Insurance Company and State Control




Section 1


Insurance Company



Article 43:


Every insurance company shall be registered in the commercial register and be subject to the supervision and control of the Ministry of Economy and Finance.



Article 44:


An insurance company cannot delegate any leading management power and settlement role to any person who is 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 the temptations or conspiracy in committing the above crimes or all  punishments for at least one year imprisonment, regardless of type of crime committed shall  be the ground of incapacity.



Article 45:


All insurance companies, whether the state owned, private company or joint­venture shall be allowed to operate in the only in the form of public liability company.



Article 46:


Insurance companies can carry out the following insurance classes.


a)            Life insurance company which is required to have registered capital in Riel  currency at least equivalent to five million (5.000.000) SDR based on exchange rate on the date of license granting:


b)            General insurance company which is required to have registered capital in Riel currency at least equivalent to five million (5.000.000) SDR based on the exchange rate on the date of license granting:


c)            Life insurance and general insurance company which is required to have registered capital in Riel currency at least equivalent to ten million (10.000.000) SDR based on the exchange rate on the date of license granting:


Article 47:


The insurance company as mentioned below shall not allowed business in the if:


a)            Not being authorized by the competent authority.


b)            Not being registered for any classes of insurance as provided in Article 46 of this law.



Article 48:


Before starting the insurance business, the licensed insurance company shall fulfill the  following formalities as required by the Ministry of Economy and Finance:


– Provided document or letter being certified that the deposit of 10 percents of the registered capital has been put at the Nation Treasury of the .This deposit shall be maintained until the company ceases the business operation in thee:


– Provided document or letter being certified that the solvency margin has been maintained at a recognized bank in the. This solvency margin shall be defined as per type of each insurance company, but the premium 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 of capitalization.


The state owned and joint­venture companies holding at least fifty one percents (51%) being the state shares, shall comply with the Law on General Statute of Public Enterprise.


The private insurance company shall comply with the license granted by the Ministry of  Economy and Finance.




Insurance Agent and Insurance Broker


Article 50:


An insurance agent is a natural person or legal entity who receives insurance commission from insurance company under the clearly specified mandate.


An insurance broker is a legal person who carries out insurance business for the benefit to the Insured, providing the 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 insurance agent and broker shall be defined by a Sub­decree.







Article 52:


Any person who violates 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 Sub­decree in accordance with each type of motor vehicles and construction projects.



Articles 53:


Any violation of article 44 or 48 of this law shall be fined from ten million ( 10,000.00 ) Riel to fifty million ( 50,000.00 ) Riel and the license shall be revoked.



Articles 54:


Any person who violates Article 47 off this law shall be fined on 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.





Transition Provisions


Article 55;


Any person who conducts a business as specified in Article 49 of this law shall be required to have insurance from an insurance company no later than the 30th of June,2001 after this law enter in to force.


Any person who conducts a business as specified in Article 36 and 42 of this law shall be  required to have insurance from an insurance company no later than the 31th of December 2001 after this law enters into force.


The penalty specified in Article 52 of this law shall be applied if the two deadlines as  mentioned above are expired.





Final Provision


Article 56:


Any provisions that are contrary to this law shall be deemed null and void.




Phnom Penh, July 25, 2000






Norodom Sihanouk




Having submitted to the King for signature.



Prime Minister




Hun Sen               Samdech Prime Minister





Senior Minister and Minister of Economy and Finance




Keat Chhon