Insurance contracts are 'long and confusing', delegates propose having a common contract form

At the group discussion on the draft Law amending and supplementing a number of articles of the Law on Insurance Business on November 3, some National Assembly delegates said that even those with experience in law-making, reading insurance contracts that are dozens of pages long still find them 'really difficult to understand'.

Customers read the terms before purchasing insurance - Photo: TTD

Chairman of the Committee for Science, Technology and Environment Nguyen Thanh Hai said that many voters reported the situation of "it is easy to deposit money but very difficult to withdraw it", many people were even discouraged because they had to follow the terms of the insurance contract with very long appendices, so they accepted to lose the money they had paid.

"We often do legal research, but reading and understanding insurance contracts is very difficult. Therefore, the revised law must clarify the principle of "paying and receiving", and the benefits must be legitimate and easy", Ms. Hai said, adding that there is a need for a general insurance contract model that has been approved by competent authorities.

Accordingly, this form must be made public and all insurance companies must comply. For example, a 100-page contract must have 40-50 pages with common standards, only differing in subjects and payment levels. "This will minimize risks so that when a dispute occurs, there is no need to discuss the general part, only the individual parts related to each subject need to be discussed," said Ms. Hai.

Ms. Nguyen Thi Thuy, Vice Chairwoman of the Law and Justice Committee , also said that she borrowed a number of insurance contracts from different companies for research, but for those with experience in law, those contracts are still "really difficult to understand" because each insurance contract is dozens of pages long with many specialized terms about finance and insurance.

Therefore, Ms. Thuy suggested that when amending the law, it is necessary to pay more attention to regulations related to the content of life insurance contracts. In particular, in addition to the requirement to ensure absolute honesty, it is necessary to add the principle of transparency of the contract.

From the principled regulations, according to Ms. Thuy, the Ministry of Finance can be assigned to provide detailed regulations to design the contents of life insurance contracts. Insurance companies will comply with them to ensure the rights of insurance participants.

However, Deputy Prime Minister Ho Duc Phoc said that life insurance is a conditional business insurance, in the Law on Insurance Business there is a provision for contracts. The basic contents of the contracts are designed when
licensed

Therefore, if the standard contract is stipulated, it will reduce the flexibility of companies, especially foreign companies. According to Mr. Phuc, when the contract expires, the insurance company must definitely pay. When the contract has not expired but the insurance buyer wants to withdraw, it may be difficult for the insurance staff because they have to maintain sales.

"Insurance consultants "live" on sales so they can point out technical problems to prevent insurance withdrawals," said Mr. Phuc, adding that amending this law must be very certain and careful with the ultimate goal of ensuring transparency, avoiding insurance fraud or profiteering, and protecting the rights of insurance participants.

Many projects whose ODA loan period has expired have not yet fully disbursed.

It is necessary to shorten the processing time for ODA loan procedures to improve loan efficiency. In the photo: Can Tho Oncology Hospital project, which borrowed capital from Hungary, has been 80% completed but has been stopped for 4-5 years now, and is being proposed to be adjusted until 2027 (photo taken in December 2024) - Photo: CHI QUOC

Explaining further the opinions of delegates on the draft Law amending and supplementing a number of articles of the Law on Public Debt Management, Minister of Finance Nguyen Van Thang said that the biggest difficulty in managing and using ODA capital is that the borrowing time from the time of raising the issue, negotiating to preparing project documents and signing the agreement takes too much time.

This leads to many projects, after signing the agreement, having to wait half the time of the agreement before disbursement can begin, or even after the end of the agreement, the disbursement has not been completed. Therefore, negotiations must be prolonged, taking a lot of time. If the sponsor does not agree to extend, the project will be unfinished, the form must be changed, the project must be closed, and other sources of capital must be sought to continue implementation.

"This is a huge problem for ODA capital sources," Mr. Thang said, adding that through consulting with the World Bank, the Ministry of Finance has reported to the Government and amended the decree on ODA in accordance with the goal of ensuring that normal loans must complete procedures to sign the agreement within 12 months, and that very complicated projects can take up to 14 months. "Only then can ODA loans be effective," Mr. Thang emphasized.

Public debt and foreign debt are both lower than the allowable limit.

National Assembly Chairman Tran Thanh Man said that by the end of 2025, public debt will be about 35-36% of GDP, government debt about 33-34% of GDP, and foreign debt about 31-32% of GDP, all lower than the allowable limit.

According to Mr. Man, the public debt issue is also related to the confidence of investors in Vietnam and the confidence of the people, so it is necessary to review the bill very carefully. At the same time, promote information and propaganda work so that people and investors can see that "we have public debt, but ensure effective public debt management".

Affirming that "to do business and develop, one must borrow from many sources", Mr. Man said that in the near future, Vietnam will implement many large projects such as the North-South high-speed railway, which is estimated to require about 67 billion USD in capital, many urban railway projects, connecting railways... so it is necessary to review all central and local loans to amend the law accordingly to serve double-digit growth.

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Source: https://tuoitre.vn/hop-dong-bao-hiem-dai-le-the-kho-hieu-dai-bieu-de-xuat-co-mau-hop-dong-chung-20251103233653306.htm