The Ministry of Finance has just issued an official dispatch responding to the petition of Lao Cai province voters sent to the National Assembly after the 5th session of the 15th National Assembly.
According to voters in Lao Cai province, currently, many life insurance agents market and advise people to sign insurance contracts, but the contracts contain many confusing terms that are disadvantageous to the insured. This leads to many cases where, when an incident occurs, the life insurance buyer is not entitled to the insurance benefits, causing economic losses to the insured.
"The Ministry of Finance is requested to coordinate with relevant ministries and branches to study and promulgate a mechanism for managing, inspecting and examining the operations of life insurance companies, strictly handling violations, and protecting the legitimate rights of insurance participants," proposed a Lao Cai voter.
Regarding this issue, the Ministry of Finance said that it has been implementing a number of solutions.
First, perfect legal regulations.
Accordingly, the Law on Insurance Business No. 08/2022/QH15 takes effect from January 1, 2023. In the process of completing guiding documents for the contents assigned in the Law, the Ministry of Finance has submitted to the Government for promulgation Decree No. 46/2023/ND-CP dated July 1, 2023.
Notably, this decree adds conditions for credit institutions to distribute insurance products to ensure transparency in the distribution of insurance products through credit institutions, the quality of distribution channels and the responsibility of credit institutions and insurance enterprises in carrying out this activity.
Accordingly, "credit institutions must set up separate counters to conduct insurance product consulting activities; must have a process to monitor and control the quality of insurance agency activities of credit institution employees to ensure that employees comply with the principles of agency activities, the authorized contents in the agency contract and relevant legal regulations," the Ministry of Finance stated.
In addition, Decree 46/2023/ND-CP also supplements the responsibility of enterprises in inspecting and supervising the quality of agency activities of employees in credit institutions, and coordinating with credit institutions in handling violations of employees in agency organizations.
Also according to the Ministry of Finance, this agency is currently in the process of completing the draft Circular guiding the Law on Insurance Business and Decree 46/2023/ND-CP of the Government.
Along with that, add requirements for documents in insurance contracts, especially for complex insurance products such as investment linkages, towards improving information transparency.
The draft also proposes to supplement a summary document on contract terms and conditions to help insurance buyers more easily access information, better understand the product, rights and obligations when participating in a life insurance contract before deciding to enter into a contract.
In addition, the Ministry of Finance is also drafting a Decree amending and supplementing Decree No. 98/2013/ND-CP, Decree No. 48/2018/ND-CP, Decree No. 80/2019 on administrative sanctions for violations in the fields of insurance business and lottery business.
"The content of this draft decree will clearly, transparently, and more specifically stipulate the penalties related to the sale of insurance through banks and credit institutions. The main penalties, additional penalties, and remedial measures are specifically prescribed for each violation and correspond to the nature and severity of the violation," the Ministry of Finance informed.
Accordingly, this agency proposed a fine of 90 - 100 million VND, double the current level of 40 - 50 million VND for one of the following violations: product introduction documents 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, unclear information, causing insurance buyers to misunderstand the benefits of the product; product introduction documents do not clearly show that the product is an insurance product, provided by an insurance company, a branch of a foreign non-life insurance company, and is not a product of distribution partners...
Second, on inspection and examination work.
Since September 2022, a specialized inspection of insurance sales through banks and credit institutions has been carried out for 6 life insurance companies.
The Ministry has circulated the inspection conclusions at 4 insurance companies (Prudential, MB Ageas, Sun Life, BIDV Metlife) and made the inspection conclusions public according to legal regulations, and at the same time informed the press about the inspection results at these 4 insurance companies.
The inspection discovered violations by 4 insurance companies related to the sale of insurance products through the bancassurance channel.
Specifically, many units issued procedures and regulations that did not fully ensure the content as prescribed, and did not comply with the insurance product fee schedule approved by the Ministry of Finance. Insurance agents did not comply with the regulations of the enterprise and the law when implementing investment-linked insurance products, or accounted for insurance agency operating costs in violation of the law.
The Department of Insurance Management and Supervision (Ministry of Finance) is reviewing violations by four insurance companies to handle them strictly and in accordance with the law.
The Ministry of Finance said that through inspection, it has proposed to handle a total amount of VND 15,488 billion, of which, it will exclude from deductible expenses when determining taxable income for corporate income tax in 2021 of the above 4 insurance companies with a total amount of VND 1,520.99 billion.
In addition, the authorities also conducted inspections of two life insurance companies. If violations are detected, the Ministry of Finance will strictly handle them according to the provisions of the law. For the remaining insurance companies, inspections will continue as planned.
Third, coordinate with relevant agencies.
In the past, the Ministry of Finance has transferred information reflecting on the hotline about being forced to buy insurance when disbursing loans to the State Bank Inspection and Supervision Agency for coordination in management and supervision. Currently, the Ministry of Finance is coordinating with the State Bank Inspection and Supervision Agency to complete and sign the Coordination Regulations between the two agencies in building and completing the policy mechanism, inspection, examination and supervision of insurance service provision activities through banks.
Pursuant to Joint Circular No. 85/2016/TTLT-BTC-BCA, the Ministry of Finance has coordinated and provided information with agencies of the Ministry of Public Security to ensure social order and safety in the financial sector. At the same time, the Ministry of Finance has also transferred petitions reflecting criminal acts to the Ministry of Public Security's security investigation agency for investigation and handling in accordance with the law.
The Ministry of Finance also coordinates in providing information and answering questions about legal regulations on insurance business and mechanisms to protect the rights of insurance participants for news agencies and the press.
Fourth, strengthen communication and dissemination of laws on insurance contracts.
Coordinate with the Ministry of Information and Communications and news agencies to promote propaganda and dissemination to people about their rights and obligations when participating in insurance contracts, content that can easily cause disputes in contracts that people need to pay attention to when participating, and mechanisms for handling disputes in insurance contracts.
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