Recently, the Ministry of Finance has put forward several proposals in the Draft Decree amending regulations on handling administrative violations in the insurance sector. These include increasing the fines for certain actions related to the provision of insurance products and insurance sales operations.
Notably, the Ministry of Finance proposed that insurance companies could be fined 80-100 million VND if they provide inaccurate information regarding rules, conditions, terms, and summary documents illustrating benefits and product introductions to customers.
Providing insurance advice in violation of regulations can result in fines of up to 100 million VND (Photo: Provided)
This is also the penalty level applied to violations related to investment-linked insurance products, health insurance, and retirement insurance, aiming to create a clean and healthy insurance business environment.
In fact, under the old regulations, providing unclear or inaccurate product brochures or illustrative materials only resulted in a warning. Actions such as failing to provide sufficient information or notifying customers of the contract status were also only punishable by fines of 40-50 million VND.
In addition to proposed changes to penalties for insurance companies, regulations on insurance brokerage activities have also been tightened.
Specifically, brokerage firms can be fined between 20 and 40 million VND if they promise illegal benefits to entice customers to sign contracts, or abandon existing contracts to purchase new ones. Advising customers to purchase insurance with less competitive terms to earn higher brokerage commissions or providing false information will result in fines of 40 to 60 million VND.
A common violation is the use of unqualified brokers, and it is proposed that the penalty for brokerage firms be increased to 50-70 million VND. Insurance agents could face fines of 30-50 million VND for similar offenses.
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