Ministry of Finance to scrutinise insurance sales via credit institutions and foreign bank branches
While acknowledging the market's achievements, Minister of Finance Hồ Đức Phớc expressed concern about the quality of advisory services, customer care and claims settlement, particularly in the rapidly expanding life insurance sector.
The Ministry of Finance has announced its plans to inspect the sales of insurance products through credit institutions and foreign bank branches in Việt Nam.
The inspections will specifically target two life insurance companies: Mirae Asset Prévoir Life Insurance Company Limited and Cathay Life Vietnam Insurance Company Limited, according to Minister of Finance Hồ Đức Phớc.
The insurance market in Việt Nam has undergone significant growth, with insurance companies reinvesting about VNĐ762.6 trillion in the economy by the end of 2023, he told Đầu Tư (Investment) Newspaper.
Insurance benefits paid out amounted to VNĐ86.4 trillion, and the total assets of insurance companies reached approximately VNĐ913.3 trillion.
While acknowledging the market's achievements, Minister Phớc expressed concern about the quality of advisory services, customer care and claims settlement, particularly in the rapidly expanding life insurance sector.
"Bancassurance has diversified insurance operations but has also introduced complexity, requiring us to reevaluate and rectify our direction and ensure healthy operations," the minister said.
He further highlighted that the Ministry of Finance had applied several measures to address shortcomings and discrepancies in the implementation of insurance product operations, especially in the life insurance market and bancassurance.
They have standardised regulations related to insurance contracts to protect participants' rights and ensure transparency. Credit institutions are required to inform customers that insurance products are not mandatory for using their services.
Regarding investment-linked insurance products, insurance agents must record the advisory process, including the customer's confirmation of voluntary participation. Insurance companies are not allowed to issue contracts if the recorded content lacks the customer's confirmation of voluntary participation.
Life insurance companies are instructed to establish dedicated departments and hotlines to address customer feedback and inquiries promptly. Any reports received regarding forced insurance purchases during loan disbursement are forwarded to the State Bank's inspection and supervision agency for appropriate action.
In 2022 and 2023, the Ministry of Finance conducted inspections and examinations on 10 out of 17 life insurance companies involved in sales through credit institutions and foreign bank branches. Two insurance companies faced administrative penalties, resulting in a total fine of VNĐ310 million.
In 2024, the Ministry plans to continue inspections and will focus on the above two life insurance companies to ensure compliance with regulations and the proper implementation of insurance sales through credit institutions and foreign bank branches. — VNS
