Penalties for forcing people to buy insurance will increase

The Ministry of Finance is seeking comments on the draft Decree amending and supplementing a number of articles of the Government regulating administrative sanctions for violations in the fields of insurance and lottery business. In this draft, the Ministry of Finance proposes to increase the level of penalties for a number of violations in the field of insurance.

Sẽ tăng mức xử phạt khi cưỡng ép người mua bảo hiểm - Ảnh 1. — Violations in insurance sales will be subject to increased penalties.

For example, for the sale of life insurance and health insurance products, a violation will be fined from VND90 million to VND100 million instead of the fine of VND40 million to VND50 million as currently regulated. Or violations of regulations on insurance products and insurance commissions will be fined from VND60 million to VND70 million instead of the current fine of only VND10 million to VND20 million. A fine of VND90 million to VND100 million will be imposed on insurance companies and branches of foreign non-life insurance companies that pay agent commissions, support, bonuses and other benefits exceeding the maximum prescribed level.

The draft regulation stipulates that violations include not providing insurance buyers with documents during the contract signing process; Not clearly and fully explaining to the buyer about insurance benefits, terms of exclusion of bank liability, rights and obligations of the buyer when signing an insurance contract as prescribed; Not providing the buyer with evidence of signing an insurance contract; Threatening or forcing the signing of an insurance contract; Product introduction documents that do not truthfully reflect the basic information in the rules and terms of the insurance product.

In addition, the draft also adds provisions on sanctions for violations of risk management, internal control, internal audit, provisions on implementing improvement measures, provisions on implementing early intervention measures, provisions on implementing control measures, and failure to perform responsibilities when being subject to improvement measures, early intervention measures, and control measures.

Supplementing violations of information disclosure, some new regulations on penalties for legal regulations on anti-money laundering, anti-terrorist financing in the insurance business sector. For example, insurance companies will be fined from 20 to 30 million VND for violations of deposit regulations instead of just being warned as at present...

According to the Ministry of Finance, in the period 2011-2020, the insurance market achieved an average growth rate of 17%/year. In 2022, the total assets of the insurance market reached VND 811,312 billion (up 14.51% over the same period in 2021), of which non-life insurance enterprises reached VND 117,229 billion, life insurance enterprises reached VND 694,083 billion, reinvestment in the economy : reached VND 656,423 billion (up 12.56% over the same period in 2021). The insurance market is increasingly demonstrating its role and position in socio-economic development, as well as partly providing financial and health protection for the people. However, through the practice of management and supervision of banking business activities, it shows that regulations on administrative sanctions in this field must be amended and supplemented accordingly.

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