Enhancing the competitiveness of Vietnam's insurance market

Discussing at Group 8 (including the National Assembly Delegation of Bac Ninh and Ca Mau provinces) on the morning of November 3, delegates highly agreed on the necessity of amending and supplementing a number of articles of the Law on Insurance Business to "eliminate" inappropriate business conditions, simplify administrative procedures; create an open and transparent legal corridor, contributing to improving the competitiveness of the Vietnamese insurance market.

Head of the National Assembly Delegation of Ca Mau province, Lu Van Hung, chaired the discussion session at Group 8. Photo: An Nhien

Review of compulsory insurance regulations for motorbikes

Appreciating the purpose of promulgating the Law to reduce investment and business conditions for insurance business activities; simplify administrative procedures... However, National Assembly Deputy Nguyen Quoc Han (Ca Mau) said that the guidance should not be "left entirely" to the Government . The delegate suggested that it is necessary to specify more clearly the criteria and scope of guidance to avoid the situation of "framework law, tube law". At the same time, it is necessary to review the consistency between the Law on Insurance Business and Law amending and supplementing a number of articles of the Law on Enterprises and the Law on Inspection (amended), to ensure consistency and uniformity in the legal system.

National Assembly Deputy Nguyen Quoc Han (Ca Mau) speaks. Photo: An Nhien

Discussing the rationality of the regulation on compulsory insurance for motorbikes in the draft law, National Assembly member Dinh Ngoc Minh (Ca Mau) said that, in reality, many people are not interested in buying compulsory insurance, because the compensation level is low and the implementation is still a formality.

“People who have accidents are only compensated a few hundred thousand dong, which is not significant, so they are reluctant to buy. In many places, motorbike insurance is even sold at gas stations, which is no different from charging people for nothing.” Therefore, delegates suggested that it is necessary to reduce unnecessary complicated procedures related to this type of insurance.

National Assembly Delegate Dinh Ngoc Minh (Ca Mau) speaks. Photo: An Nhien

Agreeing with the view of delegate Dinh Ngoc Minh, National Assembly delegate Tran Thi Van ( Bac Ninh ) said that people are not too "keen" on this type of insurance. Through actual meetings with voters, many people reported that they bought this insurance product only to "deal" with the authorities, not because of the benefits they enjoy.

One of the "core" issues, according to delegate Tran Thi Van, that makes people not too "interested" in this type of insurance is because the rate of payment for compulsory civil liability insurance for motorbikes in the event of an accident is still very low.

National Assembly Delegate Tran Thi Van (Bac Ninh) speaks. Photo: An Nhien

Citing data from the Department of Insurance Management and Supervision (Ministry of Finance), the latest updated data from reports of insurance companies shows that in the first 11 months of 2024, the total revenue from compulsory civil liability insurance for motorbikes, motorbikes and similar motor vehicles was 736.9 billion VND; estimated compensation costs were 28.5 billion VND. The compensation rate was only about 4%.

It is clear that compared to other types of insurance, the current compensation rate of motorbike insurance is too low, this policy is almost ineffective. Therefore, delegate Tran Thi Van suggested that the Drafting Committee needs to thoroughly study this content, especially adjusting the compensation rate to ensure the rights and trust of customers.

Delegates attending the discussion at Group 8. Photo: An Nhien

It is necessary to clearly define the responsibilities of the Insurance Contract Consultant.

Speaking at the discussion, National Assembly Deputy Leo Thi Lich (Bac Ninh) emphasized that amending the Law is necessary to perfect the legal mechanism, improve management standards, ensure safety, transparency and sustainable development of the market, creating a legal foundation for the Vietnamese insurance market to develop in a safe and professional direction in international integration...

From the reality of issues related to insurance buying and selling in recent times, delegate Leo Thi Lich said that, in order to strengthen the work of ensuring customers' rights, the drafting agency needs to clearly define the responsibilities of insurance consultants and insurance companies...

National Assembly Delegate Leo Thi Lich (Bac Ninh) speaks. Photo: An Nhien

Typically, one of the important responsibilities of an insurance consultant is to advise objectively and honestly. They are not allowed to point out insurance products that are beneficial to the company without considering the interests of the customer. Insurance consultants must provide customers with accurate and complete information about insurance products. Insurance staff need to explain in detail the terms related to benefits, premiums, insurance period, additional benefits, as well as cases that are not covered by insurance... At the same time, they should also give warnings about insurance risks including risks arising from the insurance contract.

However, according to delegate Leo Thi Lich, currently there are many insurance consultants who only advise on things that are "beneficial" to their businesses without warning customers about risks, so when problems occur, customers are still the ones who suffer the most.

Discussion scene at Group 8. Photo: An Nhien

Therefore, to ensure the rights of insurance participants, in addition to a written contract, to ensure transparency, clarity and honesty, delegates believe that there should be a recording between the two parties as data and evidence to be kept. This will be an important legal basis, helping authorities have a basis for inspection and examination, while ensuring fairness and transparency in transactions.

"Recording the consultation process not only helps clarify the responsibilities of consultants when disputes arise, but also contributes to improving professional ethics and standards of conduct of the insurance consulting team. Thereby, strengthening people's trust in the insurance market, towards the goal of sustainable and transparent development of this field," said National Assembly member Leo Thi Lich.

National Assembly Delegate Nguyen Duy Thanh (Ca Mau) speaks. Photo: An Nhien

Agreeing with the opinions of the above delegates, National Assembly member Nguyen Duy Thanh (Ca Mau) suggested that the draft law should clearly stipulate the legal responsibilities of insurance agents and sellers. According to the delegate, reality shows that there are many cases where agents give incorrect or incomplete advice, causing people to misunderstand insurance benefits, thereby causing disputes when incidents occur.

"There needs to be specific and strong enough sanctions to protect the rights of insurance buyers, especially in the life insurance sector, where contracts are often long-term and of great value," National Assembly Deputy Nguyen Duy Thanh emphasized.

Source: https://daibieunhandan.vn/nang-cao-nang-luc-canh-tranh-cua-thi-truong-bao-hiem-viet-nam-10394162.html