Proposed 'huge' fines for life insurance consultants who violate regulations

The Ministry of Finance is seeking comments on the draft Decree amending and supplementing a number of articles of Decree No. 98/2013/ND-CP, Decree No. 48/2018/ND-CP, Decree No. 80/2019/ND-CP, Decree No. 102/2021/ND-CP of the Government regulating administrative sanctions for violations in the fields of insurance business and lottery business.

Accordingly, the Ministry of Finance proposed to double the current fine, to 90 million to 100 million VND for many violations of life insurance.

Acts that are penalized at this level include: product introduction documents that do not truthfully reflect basic information in the rules and terms of the insurance product, do not clearly state insurance benefits and exclusions of insurance liability, and provide unclear information, causing the insurance buyer to misunderstand the benefits of the product.

The Ministry of Finance proposes to double fines for many life insurance violations. (Illustration photo: QN)

Product introduction documents do not clearly state that the insurance product is provided by an insurance company or a branch of a foreign non-life insurance company, and is not a product of a distribution partner; do not clearly state that participating in the insurance product is not a mandatory requirement to perform or enjoy any other service of the distribution partner; deploy insurance products belonging to investment-linked insurance, retirement insurance, and health insurance not in accordance with the provisions of law.

The Ministry of Finance proposed to punish violations of regulations on insurance products and insurance commissions with fines of 60 - 70 million VND for many acts.

Penalties include: providing insurance products in the fields of life insurance, health insurance, motor vehicle insurance, microinsurance before registering and having the Ministry of Finance approve the method and basis for calculating insurance premiums as prescribed in Clause 3, Article 87 of the Law on Insurance Business No. 08/2022/QH15.

Failure to comply with the method and basis for calculating insurance premiums for insurance products under the life insurance, health insurance, motor vehicle insurance, and microinsurance business lines registered with the Ministry of Finance and approved by the Ministry of Finance as prescribed in Article 145 of the Law on Insurance Business No. 08/2022/QH15.

Accumulated from 2013 to present, the Department of Insurance Management and Supervision (Ministry of Finance) has fined 29 insurance companies and insurance brokerage companies. The total fine is 2.95 billion VND.

Responding to voters in some localities such as Lam Dong about strengthening inspection and examination of life insurance companies, the Ministry of Finance said it is inspecting insurance companies.

In 2023, the Ministry of Finance will develop a plan to inspect and examine 10 insurance companies. To date, the Ministry of Finance has surveyed, collected information and plans to inspect 3 life insurance companies and will continue to inspect and examine the remaining insurance companies as planned.

In June, the Ministry of Finance announced the inspection results of four bank insurance companies: Prudential, Sun Life, MB Ageas and BIDV Metlife.

In particular, many violations in selling insurance through banks were pointed out, such as: Not ensuring the quality of insurance product consultation, leading to customers not understanding the insurance products; Allowing others (other personal agents, bank employees) to use iPads and agent codes to guide customers in entering information; Not following the insurance fee schedule approved by the Ministry of Finance...

(Source: Tien Phong)

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