Prohibit the situation of forcing to buy insurance

Tight control of cross-selling activities of insurance agents

Delegate Nguyen Huu Thong ( Lam Dong delegation) pointed out that in recent times, 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.

Delegate Nguyen Huu Thong (Lam Dong).

According to the delegate, the draft Law amending and supplementing a number of articles of the Law on Insurance Business Allowing individuals who are insurance agents of life insurance companies to simultaneously act as distribution agents for 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 current situation where the monitoring system for insurance agency activities still has many shortcomings, delegates are worried that this regulation poses a great risk of conflict of interest.

“As we know, 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. It is recommended that if cross-selling is allowed, the draft Law needs to have a tighter binding mechanism such as: clearly stipulating the number of companies that an individual agent is allowed to represent, for example, no more than two companies (one life insurance, one non-life insurance/health insurance); and requiring agents to publicly inform customers of which companies they are agents of, how the commission levels differ…”, the delegate proposed.

Agreeing with the regulation allowing cross-selling of insurance agents in the draft, delegate Ha Sy Huan ( Thai Nguyen ) said that this regulation will help reduce social costs in training, granting certificates, organizing networks and meeting diverse customer needs. People can be consulted and have comprehensive health, property, life, accident insurance... in one transaction.

However, delegates also suggested that there should be conditions, limits and a strict risk monitoring mechanism. Firstly, cross-selling of insurance must be registered and clearly publicized which company and type of agent it is, to avoid conflicts of interest. Consumers must be transparently informed when the agent advises products belonging to another company or another type.

Second, regulatory agencies need to clearly stipulate that cross-selling insurance must not be accompanied by binding conditions. “For example, buying compulsory life insurance with motor vehicle insurance or vice versa. Businesses must be jointly responsible if agents take advantage of cross-selling to give wrong advice, causing damage to customers, and have a mechanism to check and verify the quality of cross-selling agents.”

Explaining and receiving delegates’ opinions this morning on the draft Law amending and supplementing a number of articles of the Law on Insurance Business, Minister of Finance 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. According to the Minister, there have even been cases of forcing people to buy insurance.

Minister of Finance Nguyen Van Thang at the meeting this morning.

According to the Minister, on this issue, the State Bank has given very strong instructions. The Law on Credit Institutions has also prohibited 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 threats and coercion to enter into insurance business contracts. The Law and guiding documents also strictly regulate consulting and recording work to improve agent quality.

Minister of Finance Nguyen Van Thang affirmed that in the coming time, the Ministry of Finance will continue to conduct inspections, handle violations and submit to competent authorities to issue regulations to limit this situation.

Removing many barriers to market entry for insurance companies

The draft Law amending and supplementing a number of articles of the Law on Insurance Business has removed many barriers to market entry for insurance enterprises as well as promoted the transition from pre-inspection to post-inspection. National Assembly deputies highly appreciated this innovation of the draft law.

Delegate Ha Sy Dong (Quang Tri) said: "I agree with the spirit of reducing market access barriers of the draft, but propose a comprehensive review of Article 3a 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, buy shares, or buy capital contributions according to Clause 3, Article 17 of the Enterprise Law."

Similarly, regarding the conditions and official operating period, delegates agreed with the draft to shift from pre-inspection to post-inspection, but it is necessary to clarify the content of post-inspection and clearly define the responsibilities of the management agency as well as quantify the conditions that businesses must meet before officially operating.

At the same time, delegates also requested the Ministry of Finance to carefully review regulations on internal control, internal audit, risk management, deposits, and license revocation to ensure the transition to post-audit is both open and strict.

Regarding the draft's provision on removing the requirement for investors to have confirmation from foreign management agencies that they have not seriously violated the law on insurance business and brokerage within a certain period of time, delegate Nguyen Huu Thong (Lam Dong) agreed with the direction of reducing administrative procedures, but was concerned that this provision would weaken the screening mechanism to assess the reputation and level of compliance with the law of foreign investors.

Therefore, the delegates proposed to regulate in a way that both ensures reform goals and management goals, specifically: not rigidly maintaining the sole requirement of "certificate of foreign management agency", but the Law needs to stipulate that foreign investors must provide documents proving their history of compliance with the law such as: audit reports, monitoring reports, credit ratings, self-declaration with post-audit mechanism; at the same time, clearly stipulate that if there is false declaration or concealment of violations, the State has the right to suspend or revoke the License according to Article 75 of the Law on Insurance Business and handle corresponding responsibilities. This will both meet the requirements of administrative procedure reform and ensure market safety.

Regarding the opinion of delegate Nguyen Huu Thong, Minister of Finance Nguyen Van Thang accepted and said that the content will be edited and reported to the National Assembly upon approval.

He emphasized that this draft only amends truly urgent issues, aiming to reduce business conditions, simplify procedures, and remove difficulties for businesses. The Ministry of Finance has recorded the opinions of National Assembly deputies for review and inclusion in the overall revision plan in the coming time.

Issues within the scope of decrees and circulars will be reviewed and appropriate amendments proposed. Issues related to management and supervision will be noted by the Ministry in the upcoming inspection work.

Source: https://baodautu.vn/nghiem-cam-tinh-trang-ep-mua-bao-hiem-d436810.html