Strict prohibition on coercing insurance purchase when borrowing from banks.

The State Bank strictly prohibits the act of "pressuring" customers to purchase insurance. Any bank that intentionally violates this will face severe consequences.

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Recently, Quang Ngai residents sent a petition to the State Bank regarding the ongoing practice of purchasing life insurance when borrowing money from banks. In response, the State Bank stated that it has regularly issued directives, warnings, and measures to rectify the activities of insurance agents from credit institutions.

Vietnam’s residents still buy insurance before disbursing capital

The State Bank has requested credit institutions to strictly abide by certain regulations and guidelines related to insurance agency operations. This includes the provision of complete and accurate information about insurance products and companies to policyholders, as well as clear and full explanations regarding insurance benefits, exclusion clauses, and the rights and obligations of policyholders. Credit institutions are prohibited from unilaterally providing policyholder information without their consent and are strictly forbidden from pressuring customers to purchase insurance policies.

The State Bank has included audits of insurance agency operations by credit institutions in the 2023 inspection plans of some joint-stock commercial banks. State Bank branches in provinces and cities have been instructed to strengthen inspection and supervision of insurance agency activities conducted by credit institutions located within their jurisdictions, and to take strict action against violations of insurance business regulations.

In October 2023, the State Bank and the Ministry of Finance signed a regulatory framework aimed at enhancing coordination in the construction, improvement of policy mechanisms, dissemination of regulations, and inspection, examination, and supervision of insurance companies, credit institutions, and branches of foreign banks engaging in insurance agency activities.

Furthermore, the State Bank and the Ministry of Finance have conducted discussions and established a hotline to promptly address any feedback or suggestions related to the provision of insurance services by credit institutions.

In the future, the State Bank will continue to closely coordinate with the Ministry of Finance to strengthen inspection and supervision of insurance services provided through banks. In cases of violations, appropriate measures will be taken in accordance with the law.

SOURCEcafef
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