More tight management and supervision of Bancassurance

The distribution of insurance through the banks (“Bancassurance”) is rapidly developing, so there is an inadequacy in management and supervision of service quality. The Ministry of Finance (“MoF”) is submitting to Vietnam Government for consideration and approval for additional solutions of strict management of Bancassurance activities.

In order to rectify the situation of bank staff "forcing" customers to buy insurance when coming to the transaction in recent years, Mr. Ngo Viet Trung - Director of Insurance Supervisory Authority (“ISA”) of MoF - have been some sharing about this situation.

Mr. Ngo Viet Trung said that recently, MoF and ISA also received many reflections on the situation of commercial bank staff forcing customers to buy insurance.

According to Mr. Trung, the bank is a good and effective channel, especially with the developed insurance market in the world. The distribution of insurance via bank has made a great contribution to the total revenue of the Vietnam Insurance Market (about 20% of the total revenue of the life insurance market and about 14% of the total revenue of the market non -life danger). However, due to rapid development leads to a number of inadequacies in management and supervision of the quality of insurance selling services through the bank channel.

As a management agency, since 2014, MoF and the State Bank have issued Joint Circulars to manage the distribution of insurance through the bank channel.  Thereby, certain principles have stipulated to ensure strict management and monitoring of this channel.

“During the past years, especially in the period of 2020-2022, MoF and ISA have had many documents guiding the market, insurance enterprises tightening the insurance distribution activities through the banking channel, especially are issues of improving the quality of insurance counselors”, Mr. Trung said.

The Law on Insurance Business Law No. 08/2022/QH15 is being submitted to the Government for consideration and supplementing the solution to strictly manage insurance channels through the bank. Solutions include: Conditions with agents are organizations (including credit institutions); conditions for agents; regulations on transparency of sales documents, avoid misleading bank products and insurance products; Regulations on restricting agents may take advantage to confuse and damage the interests of the insurance participants.

“With the role of a state management agency in the field of insurance, ISA has strengthened the inspection, examination and management of insurance market supervision. In 2022, we submitted and was approved by MoF to approve the inspection and examination plan on the field of selling insurance via bank channels for 10 insurance enterprises and have implemented 4 inspections and inspections are in the process of finishing the conclusion. If the violation is detected, it will be strictly handled or coordinated with the police to strictly handle it if there are signs of criminal violations. In 2023, we will continue to further promote the inspection and supervision inspection with this channel”, Mr. Trung said.

According to Mr. Trung, MoF is submitting to the Government amending the regulations on sanctioning administrative violations in the field of insurance business. The sanction includes the form of fines and additional fines. Even additional penalties may be a form of banned or stop business for a definite term if serious violations.

“I think, punishment is part. The most important is the awareness of insurance enterprises, commercial banks, how to understand and comply with the provisions of law”, Mr. Trung shared.

From September 2022 up to now, people often reflect to the hotline of Tien Phong newspaper about the situation when saving at SCB was consulted by advice, switching to buying Life Insurance of Manulife. After the people submitted the complaint, ISA transferred the people's applications to the Ministry of Public Security's investigating agency.

Source: Cục trưởng Quản lý bảo hiểm: Sẽ quản chặt kênh bán qua ngân hàng (