Inspection of bancassurance sales for 2 major insurance companies

Minister of Finance Ho Duc Phoc has just reported to National Assembly deputies some contents related to the group of questions at the 31st session of the National Assembly Standing Committee on March 18.

Proposal to handle 21,000 billion VND in finance

Minister Ho Duc Phoc said that by the end of 2023, insurance companies had reinvested an estimated total of VND762,580 billion into the economy and paid out an estimated VND86,376 billion in insurance benefits. Total assets of insurance companies are estimated at VND913,308 billion, an increase of 11.12% compared to 2022.

Insurance companies have been operating safely, effectively, with increasing professionalism and competitiveness. Products and service quality have been enhanced, increasingly meeting the diverse needs of insurance participants.

However, due to rapid development, in recent times, the insurance market, especially life insurance, has encountered a number of problems regarding the quality of consulting activities, as well as customer care and insurance benefit settlement services; notably the distribution channel through banks (bancassurance).

Minister of Finance Ho Duc Phoc. Photo: Hoang Ha

This channel helps diversify insurance exploitation activities, but also creates more complexity and needs to be reviewed and adjusted to operate in the right direction and healthily.

Recently, the Ministry of Finance has strengthened many solutions to rectify negative aspects and deviations in the implementation of insurance product exploitation activities in the life insurance market in general and the bancassurance channel in particular.

Specifically, 10 out of 17 life insurance companies that sold insurance through credit institutions and foreign bank branches in 2022 and 2023 were inspected and examined.

The inspected enterprises have premium revenue exploited through the bancassurance channel accounting for 96.83% of the total premium revenue exploited through this channel of the entire life insurance market.

The inspection discovered violations through the bancassurance channel such as violations in issuing procedures and regulations; violations in complying with product fee schedules, and insurance agents not complying with company regulations and legal regulations.

The Ministry of Finance's inspection agency has recommended financial handling of VND 21,000 billion, of which nearly VND 1,956 billion will be excluded from deductible expenses when determining taxable income for corporate income tax in 2021 and 2022; administrative sanctions will be imposed on 2 insurance companies, with a fine of VND 310 million.

In addition, the inspection agency has suspended the signing of new insurance contracts through credit institutions and foreign bank branches for a limited period of time; and requested the restoration of the original status for violations.

Strict handling if violations are detected

The Minister of Finance said that in 2024, the Ministry has a plan to inspect 6 insurance companies. Of which, it will conduct inspections on the implementation of insurance sales through credit institutions and foreign bank branches with 2 life insurance companies (Mirae Asset Prévoir Life Insurance Company Limited, Cathay Life Insurance Vietnam Company Limited).

The Commander of the financial sector acknowledged that the shortcomings that have been raised by the press and public opinion in recent times are both challenges and great opportunities to improve the quality of the Vietnamese insurance market, aiming for safe and sustainable development in the future.

In the coming years, in addition to fundamental factors such as economic growth, large population, technological development trends, etc., the legal foundation is expected to contribute to supporting the insurance market to develop further in both "quantity" and "quality".

Affirming that in the coming time, the Vietnamese insurance market will prioritize development quality, but to "harmonize benefits and share risks", Minister Ho Duc Phoc said that synchronous solutions are needed from both management agencies and the real participation of both insurance companies and insurance participants.

Regarding the responsibility of the Ministry of Finance, Mr. Phoc affirmed that it will continue to improve policy mechanisms related to insurance products, publicize and make transparent information about products and insurance companies so that people can easily access information when researching and choosing suitable insurance products.

The management agency has and continues to request to review and strengthen inspection and supervision of insurance companies' operations and strictly handle cases where insurance agents are found to violate the law.

(Source: Vietnamnet)

Source: https://vietnamnet.vn/thanh-tra-ban-bao-hiem-qua-ngan-hang-doi-voi-2-cong-ty-bao-hiem-lon-2258613.html

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