Illegal accounting of more than 600 billion VND
According to the report in the Inspection Conclusion 811/KL-BTC of the Ministry of Finance , Sun Life Vietnam Life Insurance Company Limited (Sun Life Insurance) is a 100% foreign-owned enterprise established in Vietnam under the Establishment and Operation License No. 68 GP/KDBH dated January 24, 2013 of the Ministry of Finance . The company's field of operation is life insurance, health insurance; reinsurance; fund management, capital investment according to the provisions of Vietnamese law.
By 2021, Sun Life Insurance began selling insurance through two credit institutions and foreign bank branches (bancass). Through inspection, it was determined that in 2021, the company accounted for expenses and revenues related to bancass activities as deductible expenses when determining income subject to corporate income tax (CIT). This accounting is not in accordance with the law on insurance business and tax law.
Sun Life Vietnam Life Insurance Company is a member of Sun Life Financial Group.
The amount of money incorrectly accounted for is more than 600 billion VND, including: Accounting for reduced revenue for canceled contracts with an amount of more than 620 million VND, not in accordance with the provisions of Clause 1, Article 21 and Point b, Clause 3, Article 25 of Circular No. 50/2017/TT-BTC of the Ministry of Finance;
By the end of 2021, Sun Life Insurance paid initial support costs and cooperation fees for 2 affiliated banks with a total amount of 10.3 trillion VND, accounting for deductible expenses when determining taxable income for corporate income tax in 2021, the total amount was more than 343 billion VND;
Payment and accounting of support for banks not in accordance with legal regulations on insurance business and tax regulations of more than 247 billion VND;
The implementation of the emulation program was inconsistent with the original proposal, unrelated to the production and business activities of the insurance company and accounted for as deductible expenses when determining taxable income for corporate income tax with an amount of nearly 9 billion VND.
Also according to the Inspection Conclusion, in the 2021 financial report and reported data of Sun Life Insurance, the total premium revenue through the bancassurance channel of this company reached more than 2 trillion VND, equivalent to 61.15% of total premium revenue. New revenue from the bancassurance channel reached 1.9 trillion VND, equivalent to 82.27% of new premium revenue.
Of the 80,000 insurance contracts executed through the bancassurance channel, more than 3,200 insurance contracts were cancelled during the consideration period (equivalent to a rate of 4.05%). Notably, the cancellation and termination rates of insurance contracts after the consideration period (first year) of contracts issued through the two banks were 73% and 39%, respectively.
There are no sanctions for agents who are bank employees?
Despite having a large revenue through the bancass channel, however, the Inspectorate found that Sun Life Insurance's procedures and regulations do not have regulations on disciplinary action against individuals who are agents who are employees of the bank. The implementation of Sun Life Insurance's procedures and regulations on agent management also has some shortcomings and inadequacies related to the activities of handling agent discipline and evaluating the quality of agent services.
In addition, Sun Life Insurance has not yet coordinated and cross-checked information between departments regarding feedback and complaints. The checking and verification of information to serve complaint settlement is not complete according to the company's procedures.
Sun Life Insurance is a 100% foreign-owned enterprise.
Sun Life Insurance has not yet taken measures to handle or remind individual insurance agents and bank employees who have not properly followed the procedures and regulations in coordination with the bank. The Inspectorate's conclusion clearly stated that through the sample inspection, 44 cases of insurance agents and bank employees were discovered who had not properly followed the regulations in the process of implementing insurance sales. This led to violations of regulations such as allowing others to sign on behalf of the buyer, signing on behalf of the insurance buyer on the insurance request form prepared via the SunSmart application, signing on behalf of the insurance buyer on the insurance contract handover receipt, violating regulations on handover of insurance contracts or regulations on supervising customers signing documents, etc.
In addition, Sun Life Insurance also has many "loopholes" in the discipline and training of insurance agents. There are many cases where bancass agents were found to be unqualified for training and taking the insurance agent certification exam but were still granted agent certificates by Sun Life Insurance. However, these cases were later revoked of their agent codes immediately after being reviewed and found to have errors.
At the end of the Inspection, the Ministry of Finance recommended that Sun Life Insurance reduce deductible expenses when determining taxable income in 2021 by more than VND 600 billion. In addition, Sun Life Insurance must adjust accounting, determine, recalculate, and declare additional corporate income tax accordingly, not allocate expenses paid by the insurance company, and incorrectly account for them in contract owner funds according to legal regulations.
The Ministry of Finance also assigned the Department of Insurance Management and Supervision to review administrative violations of Sun Life Insurance in the Inspection Conclusion (if any) to handle administrative violations in the insurance business sector.
Assign the General Department of Taxation to direct the Ho Chi Minh City Tax Department and related units to urge and review Sun Life Insurance's declaration and compliance with tax and invoice laws for the expenses stated in the Inspection Conclusion, thereby handling tax and invoice administrative violations (if any) and providing guidance and handling of similar cases.
In addition, the Ministry of Finance also requested Sun Life Insurance leaders to review, strengthen management and overcome the issues mentioned in the Inspection Conclusion.
Source
Comment (0)