Minister of Finance Ho Duc Phoc has sent a report to the National Assembly delegates serving the question and answer session of the National Assembly’s Standing Committee, held on March 18. The report of the Ministry of Finance has mentioned the management of the insurance business.
Minister of Finance Ho Duc Phoc
According to the Ministry of Finance, due to rapid development, recently the insurance market, especially life insurance, has encountered some issues regarding the quality of consultancy activities, customer care services, and claim settlement for customers.
Along with that, if in the past, the market only had traditional agency channels, then recently other distribution channels have been established, such as corporate agency channels, with a typical example being the distribution channel through banks (bancassurance). The Ministry of Finance emphasizes that this channel helps diversify insurance activities, but it also creates more complexity and needs to be reevaluated and adjusted.
The Ministry of Finance stated that recently it has strengthened many solutions to rectify the drawbacks and discrepancies in the implementation of insurance activities in general and bancassurance channels in particular. Among them are solutions to improve regulations and standardize insurance contracts to ensure the rights of policyholders.
At the same time, additional regulations have been added to strengthen the responsibilities of insurance companies in the process of consultancy, contract execution, ensuring transparency, and providing customers with accurate and sufficient information about insurance products.
The state management agency has also increased inspections, supervision, and added regulations to prevent the situation of “forced” insurance purchase through banks or incorrect insurance product advice on investment-linked policies. The existing regulations have also enhanced the responsibilities of credit institutions.
The report of the Ministry of Finance also clearly states that in 2022 and 2023, the Ministry carried out inspections of 10 out of 17 life insurance companies that implemented insurance sales through credit institutions and branches of foreign banks.
Through the inspections, violations were found in bancassurance channels, such as violations in issuing procedures, regulations, fee miscalculations, insurance agents not complying with company and legal regulations.
The Ministry of Finance’s inspection agency has recommended penalties totaling 21,000 trillion VND, excluding expenses deducting when determining taxable incomes for 2021 and 2022 with a total amount of over 1,955 trillion VND. Along with that, administrative fines were imposed on 2 insurance companies, with a fine of 310 million VND.
According to the Ministry of Finance, in 2024, the Ministry plans to inspect 6 insurance companies. Among them, inspections will be conducted on the implementation of insurance sales through credit institutions and branches of foreign banks for 2 life insurance companies.
The question and answer session is scheduled to take place on March 18, during the 31st meeting of the National Assembly’s Standing Committee. Minister of Foreign Affairs Bui Thanh Son and Minister of Finance Ho Duc Phoc will answer the National Assembly delegates’ questions.
Deputy Prime Minister Le Minh Khai; Deputy Prime Minister Tran Luu Quang; Ministers of Planning and Investment, Industry and Trade, Public Security, Defense, Culture, Sports and Tourism, Labor – Invalids and Social Affairs, Home Affairs; Governor of the State Bank of Vietnam will also participate in answering questions and explaining issues related.
