Are there no regulations on disciplinary action against individuals who are bank employees in the MB Ageas Life ecosystem?
According to the Ministry of Finance, the insurance market and the insurance sales channel through banks have grown rapidly in recent times, but there have been cases where employees of some banks have introduced, solicited, and forced customers to buy life insurance and investment-linked insurance when they come to deposit money or borrow credit. Therefore, in 2022, the leaders of the Ministry of Finance have directed relevant units to organize inspections and checks on the sale of insurance through banks.
Accordingly, the Department of Insurance Management and Supervision inspected the operations of four insurance companies, including MB Ageas Life Insurance Company Limited (MB Ageas Life), and discovered many violations in the process of selling insurance through agent channels such as banks, especially in the consulting stage of bank employees and brokers.
Some typical violations include: Not directly advising customers or not fully guiding them through the procedures during the implementation of the process and required documents according to the company's regulations; Not ensuring the quality of advice on insurance products, leading to customers not understanding the insurance products; Allowing others (other personal agents, bank employees) to use iPads, agent codes to guide customers to enter information; and Not properly implementing the insurance fee schedule approved by the Ministry of Finance...
Regarding this issue, the Journalist & Public Opinion newspaper also published an article reflecting on a customer who, when depositing money at a bank, was given "ambiguous" advice, leading to the savings deposit being turned into a life insurance contract of MB Ageas Life in the article: "Customer 'mistakenly bought' life insurance, what did the bank say?"
It is known that during the inspection of the sale of insurance products through credit institutions, foreign bank branches and related contents at MB Ageas Life in 2021 and related periods, many violations were discovered. In 2021, MB Ageas Life only sold insurance through 2 credit institutions, foreign bank branches (Bancassurance) including a bank and a MC finance company, both of which are part of the ecosystem.
Accordingly, during its operation, MB Ageas Life has issued procedures and regulations stipulating contents related to the contents of insurance agency activities in general and insurance agents in the Bancassuranceurance channel (insurance cooperation distribution channel through banks), the process of receiving, recording information and feedback from customers participating in insurance, and disciplinary action against individual insurance agents of the Company. However, the company's procedures and regulations... do not have regulations on disciplinary action against individuals who are employees of agency organizations that are banks in the MB Ageas Life ecosystem.
In addition, the process of managing and evaluating the sales force of the Bancassurance channel does not have a control point to monitor the work items that need to be performed by the management level, the reporting and monitoring mechanism has not been specifically regulated, and quantitative criteria related to quality management have not been developed to evaluate the level of work completion of the management level; The process of recruiting and training agents of the Bancassurance channel does not have a step of checking with the bank about the list of employees participating in the training before organizing the training.
Many agents were found to have not complied with regulations during the insurance sales process. MB Ageas Life accounted for expenses not in accordance with the law on insurance business and tax law.
Through the sample inspection, 31 cases of insurance agents were discovered that did not comply with regulations during the insurance sales process, specifically as follows: There were 5 insurance agents (individual insurance agents, signed contracts with MB Ageas Life) that did not comply with the company's regulations on guiding customers to fill in information and declare insurance application forms;
There are 4 insurance agents (individual insurance agents, signed contracts with MB Ageas Life) who have not complied with the company's regulations on meeting and supervising customers to sign files and documents;
There are 2 insurance agents (individual insurance agents, signed contracts with MB Ageas Life) who have not complied with the company's regulations to let others use their agent codes or use other people's agent codes to perform insurance agency activities;
There are 11 insurance agents (individual insurance agents, signed contracts with MB Ageas Life) who have not ensured compliance with the company's regulations regarding the quality of agent consultation;
There are 9 insurance agents (individual insurance agents, signed contracts with MB Ageas Life) who have not ensured compliance with the company's regulations on the use of premium receipts, delayed handover of insurance contracts,...
In addition, MB Ageas Life has accounted for expenses related to Bancassurance activities as deductible expenses when determining taxable income in 2021, which is not in accordance with the law on insurance business and tax law with a total amount of VND 5.96 billion, specifically: MB Ageas Life paid agent commission expenses for insurance contracts that were canceled and not yet recovered by agents, an amount of VND 748,457 million; MB Ageas Life paid expenses for insurance contracts with estimated commission figures and bonuses for insurance contracts exploited by agents that were not accurate as of December 31, 2021, an amount of VND 950,515 million; MB Ageas Life paid expenses The company paid direct bonuses to branches and individuals who are employees of organized agents, an amount of VND 3.24 billion; MB Ageas Life paid the cost of fixed allowances for 31 individual agents in the amount of more than 1 billion VND.
How to handle MB Ageas Life's petition?
Based on the above violations, the Ministry of Finance requested the General Director of MB Ageas Life Insurance Company Limited to: Propose financial handling for the 2021 accounting period: Accounting for a reduction in deductible expenses when determining taxable income for corporate income tax in 2021, the amount is 5.9 billion VND;
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, declare additional corporate income tax accordingly, not allocate expenses paid by insurance companies, and not account for them in accordance with legal regulations into policyholder funds.
The Ministry of Finance assigned the Department of Insurance Management and Supervision to review the Company's administrative violations in the Inspection Conclusion (if any) to handle administrative violations in the insurance business sector; Assigned the General Department of Taxation to direct the Hanoi City Tax Department and related units to urge and review the declaration and compliance of MB Ageas Life Insurance Company Limited with the laws on tax and invoices for the expenses stated in the Inspection Conclusion, thereby handling administrative violations of tax and invoices (if any) and guiding and handling similar cases.
The Ministry of Finance also requested the General Director of MB Ageas Life Insurance Company Limited to carry out the following contents:
Review, complete the development, implementation and supervision of the implementation of procedures and regulations according to legal regulations, regularly check compliance with the law, business procedures and internal regulations of the Company.
The issuance of procedures and regulations related to insurance agency activities must ensure that agency management is strictly implemented, prevent and promptly detect violations by insurance agents and individuals belonging to organized insurance agencies in the implementation of insurance agency activities, and ensure the principles of honesty, openness and transparency in insurance business activities to ensure the rights of insurance participants. At the same time, procedures and regulations must have clear provisions to ensure strict handling of individual agents, organizational agents and exploitation staff belonging to organized agents when violating regulations in accordance with the law.
Review and strengthen the management of insurance sales through credit institutions and foreign bank branches to control the cancellation of insurance contracts to ensure the rights of insurance participants and financial safety of insurance companies.
Review and rectify agent training and insurance agent management to ensure that insurance agents comply with the law and the Company's 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.
Continue to review and adjust insurance agency operating expenses, ensuring that expenses must serve insurance business activities, have full supporting documents and evidence, and comply with legal regulations in Article 69 of Decree No. 73/2016/ND-CP, Article 22 of Circular No. 50/2017/TT-BTC of the Ministry of Finance and current legal regulations.
For insurance business operating expenses not yet regulated in the Law on Insurance Business and its implementing documents, please consult with the competent State agency for implementation.
Review and adjust accounting and bookkeeping work; do not allocate expenses paid by insurance companies, accounting incorrectly according to legal regulations into insurance contract owners' funds; adjust accounting for expenses stated in the Inspection Conclusion; Implement accounting adjustments to corporate income tax income in 2021 and corresponding related periods.
The General Director of MB Ageas Life Insurance Company Limited is responsible for seriously implementing the above recommendations and overcoming all the shortcomings in this Conclusion. Report in writing the implementation results to the Ministry of Finance.
In the next article, the Journalist & Public Opinion newspaper will inform about the business process of the "golden goose" MB Ageas Life, which has earned "huge" revenue through selling insurance thanks to the financial ecosystem.
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