Overcoming the situation of forcing to buy insurance through banking channels

On the morning of November 18, discussing in the hall about the draft Law on amending and supplementing a number of articles of the Law on Insurance Business, many delegates agreed with the necessity of amending the Law to remove bottlenecks in implementing the Law on Insurance Business in 2022, especially the requirement to institutionalize major policies in Resolution 68-NQ/TW, creating a transparent, stable, feasible business environment and minimizing compliance costs for businesses.

However, there are opinions suggesting that the drafting agency only amend and supplement the contents that are truly urgent and have a direct impact on the market. Expanding the scope or amending immature contents will cause unnecessary disruption. It is necessary to thoroughly grasp the requirement to innovate legislative thinking, strongly shifting from pre-control to post-control but must be synchronous in terms of enforcement mechanism.

There are cases of forced purchase of insurance.

National Assembly delegate of Thai Nguyen province Ha Sy Huan speaks. Photo: Doan Tan/VNA

One of the contents that many delegates are interested in is the operating principles of insurance agents (Clause 11, Article 1 of the draft Law amending and supplementing Clause 1, Article 127 of the Law on Insurance Business 2022). Delegate Ha Sy Huan (Thai Nguyen) analyzed that Clause 1, Article 127 of the current law is amended to create conditions for agents to cross-sell life insurance, non-life insurance and health insurance. This is the right policy. Allowing agents to cross-sell insurance types, if well managed, will help reduce social costs in training, granting certificates, organizing networks and meeting the diverse needs of customers. People can receive comprehensive advice on health insurance, property, life, accident... in one transaction.

However, this delegate emphasized that cross-selling insurance must have conditions, limits and strict monitoring mechanisms to ensure the quality of advice, avoid conflicts of interest and risks for people. He suggested that there should be specific conditions for this content. First, cross-selling agents must register and clearly disclose which company they are agents of, and in what type, to avoid conflicts of interest. Consumers must be transparently informed when the agent advises products of another company or another type.

Second, the management agency needs to clearly stipulate that cross-selling must not be accompanied by binding conditions, for example, compulsory life insurance must be purchased with motor vehicle insurance or vice versa. Enterprises must be jointly responsible if agents take advantage of cross-selling to give wrong advice, causing damage to customers, and there must be a mechanism to periodically check the quality of cross-selling agents.

Delegate Nguyen Huu Thong ( Lam Dong ) pointed out that recently, many people have reported being given misleading advice and forced to buy insurance through banks and agents. Therefore, if we expand cross-selling without strengthening legal requirements and control mechanisms, it will be very difficult to overcome this situation.

The draft law allows individuals who are insurance agents of life insurance companies to simultaneously act as agents distributing health insurance and non-life insurance products of other insurance companies and vice versa, further expanding the mechanism of cross-selling products. However, in the context of the current inadequate supervision system for insurance agency activities, this provision poses a great risk of conflicts of interest. Agents are authorized representatives of insurance companies. When representing multiple companies at the same time, they may be influenced by commission levels and preferential policies, thereby no longer fully ensuring the obligation to prioritize the interests of insurance buyers.

"If cross-selling is allowed, the draft law needs to have a stricter binding mechanism such as clearly stipulating the number of businesses that an individual agent is allowed to represent, for example, no more than two businesses (one life insurance, one non-life insurance/health insurance); and requiring agents to publicly inform customers of which businesses they are agents of and what the commission difference is," said delegate Thong.

Explaining later, Finance Minister Nguyen Van Thang said that recently, there has been a phenomenon of bank employees consulting on banking services and selling insurance, causing confusion between banking products and insurance products. There have even been cases of forcing people to buy insurance.

The State Bank has given very strong instructions. The Law on Credit Institutions prohibits credit institutions, foreign bank branches, managers, operators, and employees of credit institutions and foreign bank branches from linking the sale of non-compulsory insurance products to the provision of banking products and services in any form. The Law on Insurance Business also strictly prohibits the threat or coercion of entering into insurance business contracts. In the coming time, the Ministry of Finance will continue to inspect, handle violations, and submit to competent authorities regulations to limit this situation.

Reducing barriers to market access

National Assembly delegate of Quang Tri province Ha Sy Dong speaks. Photo: Doan Tan/VNA

Referring to the provisions on conditions for capital contribution, establishment, management and control of insurance enterprises (Article 3a), delegate Ha Sy Dong (Quang Tri) agreed with the spirit of reducing barriers to market access, but suggested a comprehensive review of this provision to ensure consistency with the Enterprise Law. Currently, the draft only cites subjects prohibited from establishing and managing enterprises, but does not fully cover cases where there is no right to contribute capital, purchase shares, or purchase capital contributions according to Clause 3, Article 17 of the Enterprise Law. He suggested that the drafting agency supplement the full legal basis for the provisions on "controlling insurance enterprises", avoiding legal gaps and increasing transparency. At the same time, it is necessary to study the renaming of Article 3a in a direction that reflects the correct content.

Delegate Nguyen Huu Thong said that the concept of "controlling insurance enterprises" has not been explained in the draft law as well as in the Enterprise Law, which can easily lead to disputes when determining prohibited subjects, causing difficulties for state management agencies in the process of appraising dossiers. The delegate proposed to amend Clause 1, Article 3a in the direction of clearly stipulating that organizations and individuals participating in contributing capital, establishing, managing, and controlling insurance enterprises must be subjects with the right to contribute capital, have the right to establish and manage enterprises, and at the same time not be in cases of being prohibited from contributing capital, buying shares, buying capital contributions, being prohibited from establishing and managing enterprises according to the provisions of the Enterprise Law and related laws. It is necessary to specifically explain the meaning of "controlling insurance enterprises" on the basis of ownership ratio, voting rights or controlling agreements to have a basis for unified application.

Source: https://baotintuc.vn/thoi-su/khac-phuc-tinh-trang-ep-mua-bao-hiem-thong-qua-kenh-ngan-hang-20251118135912846.htm