Borrowers are still forced to buy insurance, what does the State Bank say?

The act of forcing customers to buy or sign insurance contracts when borrowing capital is strictly prohibited (Illustration photo)

Petitioning to the State Bank of Vietnam (SBV) after the 7th session of the 15th National Assembly , voters said that recently, when borrowing capital from banks, people were still "forced" to buy insurance such as life insurance, health insurance, fire insurance... before the loan could be disbursed, causing frustration among the people.

To protect the rights and interests of the people, voters recommend that the State Bank strengthen inspection and examination work; strictly handle the above acts to create conditions for people to access loans.

Responding to voters' petitions, the State Bank of Vietnam said that current laws have provisions prohibiting the act of forcing customers to buy or sign insurance contracts.

Specifically, Clause 5, Article 9 of the Law on Insurance Business 2022 prohibits the act of "threatening or forcing the conclusion of insurance contracts"; Clause 5, Article 15 of the Law on Credit Institutions 2024 prohibits "credit institutions, foreign bank branches, managers, operators, and employees of credit institutions and foreign bank branches from linking the sale of non-compulsory insurance products to the provision of banking products and services in any form".

The State Bank of Vietnam said that the Ministry of Finance is the agency responsible for state management in the insurance sector. For credit institutions with insurance agency activities, the Law on Credit Institutions 2024 also has regulations on this issue.

Regarding the banking sector, within the scope of functions, tasks and management objects, related to this issue, in recent times, the State Bank has regularly issued documents directing, warning and rectifying the insurance agency activities of credit institutions.

Accordingly, the State Bank requires credit institutions to strictly comply with legal regulations and instructions of competent authorities related to insurance agency activities, and not to allow credit institutions, managers, operators, and employees of credit institutions to associate the sale of non-compulsory insurance products with the provision of banking products and services in any form.

At the same time, strengthen the inspection, control and internal audit of insurance agency activities, proactively implement preventive measures, strictly handle violations according to regulations; strengthen the review and close supervision of insurance agency activities of credit institution branches with low second-year insurance renewal rates.

The State Bank of Vietnam has organized an online conference on insurance agency activities and directed commercial banks with insurance agency activities to implement a number of contents to ensure safe and effective insurance agency activities, comply with legal regulations, and minimize risks arising from banking activities.

The State Bank of Vietnam has also added the inspection of insurance business and insurance agency activities of credit institutions to the 2023 inspection plan of a number of joint stock commercial banks.

At the same time, request the State Bank branches in provinces and cities to strengthen inspection and supervision of insurance agency activities of credit institutions based in the area, and strictly handle cases of violations of legal regulations on insurance business activities.

According to the report of the Ministry of Finance, total insurance premium revenue (including life and non-life) in the first 9 months of 2024 reached 165,500 billion VND, down 0.41% over the same period last year. Of which, non-life insurance revenue is estimated at 58,540 billion VND, up nearly 12.8%, life insurance revenue continued to decrease by 6.4% over the same period, reaching 106,980 billion VND.

TB (according to Vietnamnet)

Source: https://baohaiduong.vn/khach-vay-von-van-bi-ep-mua-bao-hiem-ngan-hang-nha-nuoc-noi-gi-395668.html