Strengthen supervision to boost the insurance market

Mr. Ngo Viet Trung, Director of the Department of Insurance Management and Supervision (Ministry of Finance)

How do you evaluate the completion of legal regulations on insurance business in the past two years?

On November 2, 2023, the issuance of Circular 67/2023/TT-BTC guiding a number of articles of the Law on Insurance Business (Circular 67) and Decree No. 46/2023/ND-CP detailing the implementation of a number of articles of the Law on Insurance Business by the Ministry of Finance has marked a new milestone in perfecting legal regulations. Thereby, the system of legal documents on insurance business activities has been relatively consistent, from laws to decrees and circulars.

From now until the end of the year, the Department of Insurance Management and Supervision will try to complete the decree on administrative sanctions in the field of insurance business to ensure the legal system on insurance business consistent with other legal systems as well as strict management of the insurance business sector.

What are the new points in Circular 67?

Circular 67 has introduced many groups of regulations, including regulations to create a foundation for new activities of the insurance market and catch up with the world's development trends, such as regulations on the application of information technology in insurance business activities, detailed regulations on types of insurance operations and regulations on promoting supervision of insurance business activities.

In particular, Circular 67 has important contents to implement the directions of the National Assembly, the Prime Minister as well as the Minister of Finance in improving the quality of insurance agents’ activities. Thereby helping the insurance market develop sustainably. For example, as for regulations to enhance transparency in agency operations, insurance agents through credit institutions and foreign bank branches must set up a separate transaction counter, and credit officers are not allowed to consult insurance products directly at their counters.

Or the Circular has regulations that require credit institutions and insurance businesses to have shortened documents on contracts, rules, and terms, thereby helping customers better understand the nature of the product as well as decide whether to participate in insurance or not.

Furthermore, the Circular also provides regulations to limit  the situation where bank staff force customers to participate in insurance as recently reported in the press and media. Accordingly, credit institutions and bank staffs are required to clearly tell customers that insurance is neither a credit institution’s product nor a mandatory product.

At the same time, Circular 67 also requires insurance businesses to closely monitor the consulting process, such as recording during the consulting process, especially for complex products such as investment-linked products; or regulations requiring credit institutions to establish a separate specialized unit to manage and monitor the quality of their agents and staff when selling insurance products.

The circular also requires banks not to advise, introduce, offer, or arrange to sign investment-linked insurance contracts for customers within 60 days before and after the date of disbursement of the entire loan.

With these new points, what are your expectations for the development of the insurance market in the near future?

We hope that such comprehensive solutions, along with measures to strengthen management, supervision, inspection and examination at insurance enterprises and credit institutions will make the insurance market transparent, improve the quality of consulting service of insurance agents as well as of credit institutions to better protect the interests of insurance participants.

How do forms of punishment change, sir?

As I said above, we are implementing the final stages of completing the draft amending and supplementing the decree on sanctions for administrative violations in the insurance business sector. This document has many changes compared to the former one. The draft also aims to specify violations and strengthen sanctions, including monetary penalties and additional penalties, along with remedial measures to ensure strictness, deterrence against violations.

Thank you!