The Minister of Finance, Ho Duc Phoc, has reported to the National Assembly on some issues related to the questioning at the 31st Session of the Standing Committee on March 18th.
Recommendation for handling 21,000 billion VND
Minister Ho Duc Phoc stated that by the end of 2023, insurance enterprises had reinvested a total estimated amount of 762,580 billion VND into the economy and paid insurance benefits of an estimated amount of 86,376 billion VND. The total assets of the insurance enterprises are estimated at 913,308 billion VND, an increase of 11.12% compared to 2022.
The insurance enterprises have been operating safely, effectively, professionally, and their competitiveness has been continuously improving. The products and service quality have been enhanced to meet the diverse needs of policyholders.
However, due to rapid development, in recent times, the insurance market, especially life insurance, has encountered some issues regarding the quality of advisory activities, as well as the care and settlement of insurance benefits for customers, particularly in the bancassurance distribution channel.
 Minister of Finance Ho Duc Phoc. Photo: Hoang Ha |
This channel has helped diversify insurance operations, but it has also created more complexity and needs to be reassessed and adjusted to ensure the proper direction and healthiness of operations.
In recent times, the Ministry of Finance has implemented multiple solutions to rectify the deficiencies and deviations in the implementation of insurance product operations in general, and bancassurance channels in particular.
Specifically, inspections have been carried out on 10 out of 17 life insurance enterprises that have implemented insurance sales through credit institutions and branches of foreign banks in 2022 and 2023.
The inspected enterprises accounted for 96.83% of the total insurance premium revenue generated through the bancassurance channel in the life insurance market.
Through the inspections, violations in the bancassurance channel have been discovered, such as violations in the issuance of procedures and regulations, violations of product premium tables, insurance agents not complying with the company’s regulations and legal provisions.
The Ministry of Finance’s inspection agency has recommended financial handling of 21,000 billion VND, excluding the expenses that are deducted when determining the corporate income tax income for 2021 and 2022, which is nearly 1,956 billion VND; administrative fines have been imposed on two insurance companies, with fines totaling 310 million VND.
In addition, the inspection agency has suspended the signing of new insurance contracts through credit institutions and branches of foreign banks within a certain period of time; and requested the restoration of the initial state regarding violations.
Strict handling if violations are detected
Minister Ho Duc Phoc stated that, in 2024, the Ministry plans to inspect 6 insurance companies. Specifically, the inspection will focus on the implementation of insurance sales through credit institutions and branches of foreign banks by two life insurance companies (Mirae Asset Prévoir Life Insurance Limited Company, and Cathay Life Vietnam Limited Company).
The commander of the finance industry recognizes that the existing issues, which have been raised by the press and public opinion, are both challenges and great opportunities to improve the quality of the Vietnamese insurance market and strive towards safe and sustainable development in the future.
In addition to fundamental factors such as economic growth, large population, and technological development, the legal framework is expected to contribute to the further development of the insurance market in terms of “quantity” and “quality”.
Emphasizing that in the coming years, the Vietnamese insurance market will prioritize quality development, Minister Ho Duc Phoc believes that it requires synchronized solutions from both the management agencies and the active participation of insurance companies and policyholders.
In terms of the responsibility of the Ministry of Finance, he affirmed that the Ministry will continue to improve the policy mechanisms related to insurance products, publicly and transparently disclose information about the products and insurance companies, enabling the public to easily access information when researching and choosing suitable insurance products.
The regulatory agencies have reviewed and strengthened inspections and monitoring of insurance companies’ operations and will strictly handle violations if insurance agents are found to have violated legal provisions.
Thu Hang
