Previously, the insurance market only had traditional agency channels, but now many other distribution channels have been formed, such as organizational agents, typically the bancassurance distribution channel, helping insurance exploitation activities become more diverse but also more complicated.
Hot growth
The Vietnamese insurance market has grown rapidly and relatively stably in recent times, demonstrating its role and position in socio-economic development. According to the Director of the Department of Insurance Management and Supervision (Ministry of Finance) Ngo Viet Trung, the average growth rate of this market is 20%/year, basically completing the goals set out in the Insurance Market Development Strategy for the period 2011-2020.
By the end of 2023, insurance companies had reinvested an estimated total of VND 762,580 billion into the economy and paid out an estimated VND 86,376 billion in insurance benefits. Total assets of insurance companies are estimated at VND 913,308 billion, up 11.12% compared to 2022. This is a great achievement of the insurance industry, contributing to the national fiscal and monetary policies.
However, due to rapid development, in recent times, the insurance market, especially life insurance, has encountered a number of problems regarding the quality of consulting activities, as well as customer care and insurance benefit settlement services.
General Secretary of the Vietnam Insurance Association Bui Gia Anh said that the Ministry of Finance has strengthened many solutions to rectify negative aspects and deviations in the implementation of insurance product exploitation activities in the life insurance market in general and the bancassurance channel in particular. The Ministry has researched to submit to competent authorities to issue and supplement many regulations to promptly adjust emerging market issues, enhance information transparency and better protect insurance participants.
In 2022 and 2023, the Ministry of Finance conducted inspections and audits of 10 out of 17 life insurance companies that sold insurance through credit institutions and foreign bank branches. These are companies whose premium revenue exploited through the bancassurance channel accounts for 96.83% of the total premium revenue exploited through the bancassurance channel of the entire life insurance market. In 2024, according to the approved plan, the Ministry of Finance plans to continue the inspection, including inspections of the implementation of insurance sales through credit institutions and foreign bank branches for Mirae Asset Prévoir Life Insurance Company Limited and Cathay Life Vietnam Insurance Company Limited.
Through inspection, violations were detected and handled, financial handling recommendations were made for 21,000 billion VND, of which 1,956 billion VND was excluded from deductible expenses when determining taxable income for personal income tax in 2021 and 2022...
Tighten management of consulting activities
According to Director Ngo Viet Trung, the insurance industry has standardized a number of regulations on insurance contracts to ensure the rights of insurance participants; supplemented regulations to enhance the responsibility of insurance companies in the process of consulting and concluding insurance contracts, ensuring transparency. People are properly advised, with sufficient and clear information about insurance products, to choose insurance products on a voluntary basis and in accordance with their needs.
Regarding the addition of regulations to prevent the situation of “forcing” to buy insurance through banks or providing incorrect advice on investment-linked insurance products, the Ministry of Finance has requested credit institutions operating as agents to clearly explain to customers that insurance products are not products of the credit institution. Participating in insurance is not a mandatory condition for using other products and services of credit institutions operating as agents.
Credit institutions that conduct insurance agency activities are not allowed to advise, introduce, offer, or arrange the conclusion of investment-linked insurance contracts for customers within 60 days before and 60 days after the date of disbursement of the entire loan, in order to avoid the situation where bank employees use their right to review and approve loans to pressure borrowers to purchase insurance.
For investment-linked insurance products, insurance agents or employees of insurance agency organizations must record the consultation process, including confirmation from the customer that the insurance participation is voluntary and in accordance with financial needs. Insurance companies are not allowed to issue contracts in cases where the recording does not include confirmation from the insurance buyer that the insurance participation is voluntary...
The Ministry of Finance also held a meeting with all life insurance companies and requested them to review and strengthen supervision of the implementation of business processes and quality management of agents and employees of credit institutions, increase sanctions on agents and strictly handle violations.
In order to enhance the effectiveness and efficiency of the management and supervision of insurance sales through banks, the Ministry has recently transferred information to the State Bank of Vietnam's Inspection and Supervision Agency for coordination in management and supervision. According to the assessment of Vice Chairman of the National Financial Supervision Committee Vu Nhu Thang, this is a very important step in tightening the management and supervision of the insurance industry.
The Ministry of Finance has coordinated and provided information to agencies of the Ministry of Public Security, and transferred petitions reflecting criminal acts to the Ministry of Public Security's Investigation Police Agency for investigation and handling according to regulations.
General Secretary of the Vietnam Insurance Association Bui Gia Anh said that in the coming time, the insurance market needs to improve the quality of human resources, market database, apply information technology, strengthen risk management and transparency of insurance companies...
These are very necessary issues, a solid foundation for the insurance market to develop sustainably, promote its role as a "midwife", contributing to the stable and sustainable development of other entities in the sectors and fields of the economy; at the same time, it also requires synchronous solutions from management agencies, the joint participation of insurance companies, the Vietnam Insurance Association and insurance participants on the basis of "harmonized benefits, shared risks".
Source
Comment (0)