Correcting violations in selling insurance through banking channels

The Department of Insurance Management and Supervision ( Ministry of Finance ) has concluded an inspection of two life insurance companies, including Cathay Vietnam and Mirae Asset Prévoir.

A consultant helps a customer buy an insurance package at a bank in Ho Chi Minh City - Photo: TTD

Rectifying insurance agency management

According to information from the Ministry of Finance, inspection teams from the Department of Insurance Management and Supervision conducted inspections at two life insurance companies, Cathay Vietnam and Mirae Asset Prévoir. This is a specialized inspection on the sale of insurance products through credit institutions - banks.

The two above enterprises have committed violations in complying with legal regulations when selling insurance through banking channels, related to: product sales implementation, agency activities and costs for insurance agents.

From the results obtained, the inspection team recommended handling measures for each specific company.

Regarding Cathay Vietnam , it is necessary to review and complete the construction, implementation and supervision of the implementation of business processes and internal regulations to deploy the sale of joint insurance through credit institutions.

At the same time, increase supervision of insurance agency activities. Review agency operating expenses, ensure compliance with insurance business laws and other laws.

Enterprises must also adjust the accounting of expenses that are not in accordance with the law on insurance business and comply with tax regulations.

Meanwhile, the inspection team requested Mirae Asset Prévoir to review and strengthen management of the implementation of insurance product sales through credit institutions and foreign bank branches.

At the same time, complete the development, implementation and supervision of the implementation of processes and regulations, and regularly conduct inspections to ensure compliance with laws, business processes and internal regulations.

According to the inspection agency, the issuance of regulations related to insurance agency activities must ensure that agency management is strictly implemented.

Prevent, detect early and handle violations by insurance agents and individuals belonging to insurance agencies in the performance of insurance agency activities to ensure the rights of customers.

At the same time, businesses must also review and rectify the management of insurance agents and individuals belonging to organized insurance agents.

In addition, the inspectorate also requested that life insurance companies review agency operating expenses and ensure insurance business operating expenses are in accordance with the law. Review and adjust accounting and bookkeeping work in accordance with the law.

Customers buy insurance through the bank, pay for one year of insurance and then leave.

Life insurance is considered the "golden egg" of many banks. Recently, many people have complained about being forced to buy insurance when borrowing money, creating great frustration.

According to the previously announced inspection conclusions of insurance sales activities through banks, the rate of life insurance contract cancellation after one year of purchase through banks is very high.

Typically, in 2022, AIA sold insurance through six banks, with sales of thousands of billions of VND, but the cancellation/invalidity rate in the first year was 57%.

In 2023, the Ministry of Finance also publicly announced the inspection conclusion of four major life insurance companies (related to 2021), including MB Ageas, BIDV Metlife, Prudential and Sunlife. Thereby revealing the average contract lapse rate ranging from 32 - 73%, customers paid for insurance through the bank channel, then abandoned it after a year, not maintaining the contract.

Source: https://tuoitre.vn/chan-chinh-sai-pham-ban-bao-hiem-qua-kenh-ngan-hang-20250305232754988.htm