Ministry of Finance proposes to handle more than 740 billion VND

The Department of Insurance Management and Supervision (Ministry of Finance) has just issued conclusions on the thematic inspection at Prudential Life Insurance Company Limited (Vietnam).

39 cases of improper implementation

Accordingly, through sample inspection, 39 cases of insurance agents and bank employees were discovered that did not comply with regulations during the insurance sales process.

Thanh tra Prudential: Bộ Tài chính đề nghị xử lý hơn 740 tỉ đồng - Ảnh 1. — Illustration

Specifically, there were 4 individual insurance agents and 13 bank employees who did not properly implement the procedures and steps for selling insurance products as prescribed by the company.

There are 3 personal insurance agents and 3 bank employees who have not properly implemented the company's insurance premium collection management regulations.

There are 3 personal insurance agents and 3 bank employees who have not ensured the quality of insurance product consultation and have not accurately collected customer information during the process of consulting insurance products for customers according to the company's regulations.

There are 10 bank employees who have not complied with regulations on using the company's insurance agent code.

Regarding agency operating costs related to selling insurance products through credit institutions and foreign bank branches: The company accounted for expenses related to life insurance distribution activities through the banking channel (bancass) as deductible expenses when determining taxable income for corporate income tax in 2021, which is not in accordance with the law on insurance business and tax law with a total amount of more than 740.2 billion VND.

Specifically, initial support costs and cooperation fees paid to organizational agents: the company pays initial support costs and cooperation fees to organizational agents, which are banks, with a total amount of more than 4 billion VND, of which the deductible expenses when determining taxable income for corporate income tax in 2021 are more than 44 billion VND.

Marketing support costs paid to the bank's organizing agency totaled more than VND 342.6 billion.

Direct bonuses paid to bank employees for introducing and selling insurance products for the company, totaling more than 57.3 billion VND.

Payment of fixed allowances and bonuses to individual insurance agents in violation of regulations with a total amount of more than 296.3 billion VND.

Proposal to handle financial matters of more than 740 billion VND

The Ministry of Finance requested the General Director of Prudential Life Insurance Company Limited (Vietnam) to implement the financial handling proposal for the 2021 accounting period: accounting for a reduction in deductible expenses when determining taxable income for corporate income tax in 2021, an amount of more than VND 740.2 billion.

For expenses with similar content, name, payment method, vouchers and related documents as the expenses stated in the inspection conclusion of related accounting periods, the company is requested to adjust accounting, determine, recalculate, and declare additional corporate income tax accordingly; do not allocate expenses paid by insurance companies, and do not account for them in accordance with legal regulations into policyholder funds.

The Ministry of Finance requested the General Director of Prudential Life Insurance Company (Vietnam) to review and rectify the management of insurance agents, ensuring that insurance agents comply with legal regulations and company regulations.

In the process of receiving and processing information, recommendations and feedback from insurance customers, if any violation with signs of crime is detected, the records and documents must be immediately transferred to the competent investigation agency or People's Procuracy for handling in accordance with the law.

The Ministry of Finance also assigned the General Department of Taxation (Ministry of Finance) to direct the Ho Chi Minh City Tax Department and related units to urge and review the declaration and compliance of Prudential Life Insurance Company (Vietnam) with tax and invoice laws for the expenses stated in the inspection conclusion; thereby handling tax and invoice administrative violations (if any) and providing guidance and handling of similar cases.

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