Ministry of Finance to scrutinise insurance sales via credit institutions and foreign bank branches

HÉ NỘI – The Ministry of Finance has announced its plan to inspect the sale of insurance products through credit institutions and foreign bank branches in Vietnam.

According to Finance Minister Hồ Đức Phạc, the inspections will specifically target two life insurance companies: Mirae Asset Prevoir Life Insurance Company Limited and Cathay Life Vietnam Insurance Company Limited.

The insurance market in Vietnam has grown significantly, with insurance companies reinvesting approximately VNĐ762.6 trillion in the economy by the end of 2023, he told Đạo Tư (Investment) newspaper.

Insurance benefits paid amounted to VNĐ86.4 trillion, and the total assets of insurance companies reached approximately VNĐ913.3 trillion.

While acknowledging the market's achievements, Minister Phệc expressed concern about the quality of advisory services, customer service and claims settlement, particularly in the fast-growing life insurance sector.

“Bancassurance has diversified insurance operations but has also brought complexity, requiring us to re-evaluate and improve our direction and ensure healthy operations,” the minister said.

He further informed that the Ministry of Finance has implemented several measures to address shortcomings and inconsistencies in the implementation of insurance product operations, especially in the life insurance market and bancassurance.

They have standardized rules related to insurance contracts to protect the rights of participants and ensure transparency. Credit institutions are required to inform customers that insurance products are not mandatory for using their services.

In relation to investment linked insurance products, insurance agents must record the advisory process, including confirmation of the client's voluntary participation. Insurance companies are not allowed to issue contracts if the recorded material does not confirm the client's voluntary participation.

Life insurance companies have been directed to set up dedicated departments and hotlines to promptly address customer feedback and queries. Any report received regarding forced insurance purchase during loan disbursement is 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 fines totaling VNĐ310 million.

In 2024, the ministry plans to continue inspections and focus on the above two life insurance companies to ensure compliance with regulations and proper implementation of insurance sales through credit institutions and foreign bank branches. -VNS