Ministry of Finance proposes to handle more than 740 billion VND

The Insurance Supervision and Management Department ( Ministry of Finance ) has just issued a conclusion on the thematic inspection at Prudential Life Insurance Company Limited (Vietnam).

39 cases were not carried out in accordance with regulations.

Accordingly, a sample inspection revealed 39 cases where insurance agents and bank employees did not comply with regulations during the insurance sales process.

Thanh tra Prudential: Bộ Tài chính đề nghị xử lý hơn 740 tỉ đồng - Ảnh 1. — Illustrative image

Specifically, four individual insurance agents and 13 bank employees failed to follow the correct procedures and steps for selling insurance products as stipulated by the company.

Three individual insurance agents and three bank employees failed to comply with the company's regulations regarding insurance premium collection management.

Three individual insurance agents and three bank employees failed to provide quality advice on insurance products and did not accurately collect customer information during the insurance product consultation process as required by the company.

Ten bank employees failed to comply with regulations regarding the use of the company's insurance agent code.

Regarding agency operating costs related to selling insurance products through credit institutions and foreign bank branches: The company incorrectly accounted for expenses related to the distribution of life insurance through the bank channel (bancassurance) as deductible expenses when determining corporate income tax for 2021, in violation of insurance business and tax laws, totaling over VND 740.2 billion.

Specifically, the initial support costs and cooperation fees paid to the agency partners are as follows: the company paid initial support costs and cooperation fees to the agency partners (banks) totaling over 4 billion VND, of which over 44 billion VND was deductible when determining taxable corporate income for 2021.

Marketing support costs paid to the agency, which is the bank, totaled over 342.6 billion VND.

Direct bonuses were paid to bank employees for introducing and selling the company's insurance products, totaling over 57.3 billion VND.

Payments of fixed allowances and bonuses to individual insurance agents were made improperly, totaling over 296.3 billion VND.

Proposal to handle financial irregularities totaling over 740 billion VND.

The Ministry of Finance has requested the General Director of Prudential Life Insurance Company Limited (Vietnam) to implement the proposed financial treatment for the 2021 accounting period: to reduce deductible expenses when determining corporate income tax for 2021 by more than VND 740.2 billion.

For expenses with similar content, names, payment methods, supporting documents, and related materials as those mentioned in the inspection report for the relevant accounting periods, the company is requested to adjust its accounting entries, recalculate and declare the corresponding corporate income tax; and not allocate expenses paid by insurance companies or improperly accounted for according to legal regulations to the policyholder's funds.

The Ministry of Finance has requested the General Director of Prudential Life Insurance Company Limited (Vietnam) to review and rectify the management of insurance agents, ensuring that insurance agents comply with legal regulations and company regulations.

During the process of receiving and handling information, suggestions, and feedback from insurance customers, if any violations with signs of criminal activity are detected, the relevant files and documents shall be immediately transferred to the competent investigative agency or People's Procuracy for handling in accordance with the law.

The Ministry of Finance also instructed the General Department of Taxation (Ministry of Finance) to direct the Ho Chi Minh City Tax Department and relevant units to urge and review Prudential Life Insurance Company Limited (Vietnam) to declare and comply with tax and invoice regulations regarding the expenses mentioned in the inspection report; thereby taking action against any administrative violations related to taxes and invoices (if any) and providing guidance and handling similar cases.

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