Draft Law amending and supplementing a number of articles of the Law on Insurance Business: Supplementing regulations on post-audit implementation mechanism

The draft Law on amending and supplementing a number of articles of the Law on Insurance Business has shifted from a pre-audit mechanism to a post-audit mechanism, which is a step in line with the risk-based supervision model applied by many countries. To increase feasibility, delegates suggested that it is necessary to add provisions on the post-audit mechanism.

Amending the law to develop the insurance market more sustainably

On the morning of November 3, discussing the draft Law amending and supplementing a number of articles of the Law on Insurance Business (referred to as the draft Law), National Assembly deputies of Group 4 (including the National Assembly delegations of Khanh Hoa, Lai Chau and Lao Cai provinces) basically agreed with the necessity of promulgating the Law according to the Government's Submission and the Inspection Report of the Economic and Financial Committee.

Delegates discuss in Group 4. Photo: Ho Long

National Assembly Deputy Nguyen Thi Lan Anh ( Lao Cai ) analyzed that the Vietnamese insurance market is entering a period of rapid development, product diversification and expansion in scale. After more than two years of implementation, the Law on Insurance Business 2022 has created a basic legal framework for the market, but some regulations have not met practical requirements and international practices.

“If these restrictions are not adjusted promptly, they could pose systemic risks, affecting the financial safety and confidence of insurance participants,” said delegate Nguyen Thi Lan Anh.

National Assembly Delegate Nguyen Thi Lan Anh (Lao Cai) speaks. Photo: Ho Long

According to the delegate, reality shows that the rapid increase in the number of businesses, products as well as the rate of insurance disputes and claims requires tighter requirements on human resource capacity, governance structure and transparency in operations.

Along with that, preparing to implement international accounting standards requires a compatible legal framework on the principles of separating equity and premium sources, methods of surplus division and product pricing.

In addition, experience in handling cases related to insurance sales through banks in recent times shows that it is necessary to strengthen the authority and legal tools for state management agencies in specialized inspection, risk monitoring and consumer protection.

From the above analysis, delegate Nguyen Thi Lan Anh emphasized that amending and supplementing the Law on Insurance Business is necessary to promptly perfect the management mechanism, improve governance standards, ensure safety, transparency and sustainable development of the market.

Clearly define "individual insurance agent" as independent or intermediary

Giving specific comments, delegate Nguyen Thi Lan Anh said that in Clause 10, Article 1 on amending and supplementing Clause 1, Article 127, the draft Law established the principle of one agent - one enterprise of the same type of insurance, according to which an individual who is an agent for one enterprise cannot concurrently be an agent for another enterprise.

This regulation aims to prevent conflicts of interest, unfair competition and misleading and irresponsible advice from agents, especially in the field of life insurance.

However, according to delegates, the scope of the regulation is currently too broad, when applied to all "individuals working as insurance agents" without distinguishing between independent individuals and individuals working in intermediary distribution organizations (banks, financial companies, e-commerce platforms).

Grouping these groups together leads to difficulties in management, because many individuals only perform sales referral activities, do not sign direct agency contracts or simultaneously work as agents for other businesses, making it difficult to identify and control.

To ensure the goal of managing and professionalizing the agent team, while avoiding unnecessary expansion of the regulated subjects, ensuring feasibility and suitability with reality, delegate Nguyen Thi Lan Anh suggested that the Drafting Committee consider and clarify whether the concept of "individuals acting as insurance agents" only applies to those who sign direct agency contracts with insurance companies or also applies to individuals who are employees of intermediary distribution organizations?

In Clause 16, Article 1 on amending and supplementing Article 154, delegate Nguyen Thi Lan Anh said that the draft Law has shown the orientation of innovating the state management method in the insurance sector, shifting the focus from administrative pre-inspection to risk-based post-inspection, in line with modern management trends and international practices.

The shift to a post-audit mechanism allows for the concentration of monitoring resources on high-risk sectors and businesses, while reducing the burden of administrative procedures, creating conditions for businesses to develop more flexibly.

The content of this article also supplements the mechanism allowing the hiring of independent auditing organizations or experts to evaluate technical contents such as business reserves, solvency, reinsurance, capital separation and insurance premium tables.

“This is a step in line with the risk-based supervision model adopted by many countries.”

However, according to delegate Nguyen Thi Lan Anh, the current regulations are only at the principle level, and do not clearly state the process, selection criteria, frequency, methods and responsibilities in implementing post-audits, so it is difficult to ensure consistency and feasibility when applied.

Therefore, the delegates proposed that the Drafting Committee supplement regulations on the post-inspection implementation mechanism, including: principles for selecting inspection subjects, basic procedures, responsibilities of hired organizations and the mechanism for announcing results; at the same time, assign a specific competent authority to provide detailed instructions on the method and frequency of implementation to promote effectiveness, become an effective risk monitoring tool, and enhance transparency, discipline and safety of the insurance market.

The Draft Law also stipulates the conditions and standards for the Director or General Director, legal representative as follows: having a university degree or higher in insurance; in case of not having a university degree or higher in insurance, must have a university degree or higher in another major, including insurance subjects.

National Assembly Delegate Nguyen Huu Toan ( Lai Chau ) speaks. Photo: Ho Long

National Assembly Deputy Nguyen Huu Toan (Lai Chau) said that insurance is a conditional business field, the same is true in other countries. Therefore, setting this regulation is appropriate, but how can we determine which school has a subject on insurance business?

The delegate proposed that the draft Law should stipulate: in case of not graduating from university majoring in insurance, there must be a certificate issued by an insurance training institution as prescribed by law for these subjects.

Clearly define the conditions for conducting inspections and checks

What made National Assembly Deputy Le Huu Tri (Khanh Hoa) express his concern is the post-audit mechanism, inspection and examination mechanism, authority of the Ministry of Finance, and coordination mechanism with other state management agencies in performing post-audit work.

National Assembly Delegate Le Huu Tri (Khanh Hoa) speaks. Photo: Ho Long

According to the delegate, the draft Law has replaced the words "inspection", "inspection, examination" with the word "specialized inspection" to comply with the Inspection Law 2025 and Decree No. 217/2025/ND-CP on specialized inspection activities.

The draft Law raises the issue of limiting abuse in inspection and examination activities of competent management agencies, shifting from pre-inspection to post-inspection, ensuring simplification of administrative procedures, and avoiding causing difficulties for businesses, which is appropriate.

However, over the past long time, the insurance business has developed and has many problems, many loopholes, sometimes due to poor control leading to disputes, affecting the rights of insurance participants. Therefore, if there are only regulations on specialized inspection, later when there are problems without inspection activities, it will be difficult, creating a gap in management.

From the above analysis, delegate Le Huu Tri suggested that the draft Law should have regulations on inspection and examination, when and under what conditions this activity can be carried out; if there is no need for general regulations, the Government should be assigned to provide detailed regulations on inspection and examination activities in the insurance business sector.

Source: https://daibieunhandan.vn/du-an-luat-sua-doi-bo-sung-mot-so-dieu-cua-luat-kinh-doanh-bao-hiem-bo-sung-quy-dinh-ve-co-che-thuc-hien-hau-kiem-10394138.html