How much is the fine imposed fon a bank forcing customers to buy insurance to disburse loans in Vietnam?
How much is the fine imposed fon a bank forcing customers to buy insurance to disburse loans in Vietnam?
Under Clauses 2 and 3, Article 17 of Decree 98/2013/ND-CP (supplemented by Clause 7, Article 1 of Decree 48/2018/ND-CP) as follows:
Penalties for violations of life insurance and health insurance implementation regulations
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2. A fine of 40,000,000 VND to 50,000,000 VND shall be imposed for one of the following violations:
a) Failing to provide full information related to the insurance contract, failing to explain insurance terms and conditions to the policyholder upon entering into the insurance contract;
b) Failing to notify the policyholder about the status of the insurance contract as prescribed by law;
c) Forcing the policyholder to enter into supplementary insurance contracts attached to the main insurance contract;
d) Implementing insurance products in the fields of investment-linked insurance, pension insurance, health insurance not in accordance with the provisions of the law.
đ) Forcing organizations and individuals to buy insurance in any form
3. Additional forms of penalties:
Suspending operations for 02 to 03 months for part of the content directly related to the administrative violation in the Establishment and Operation License for violations specified in Clause 2 of this Article.
Thus, an administrative fine ranging from 40,000,000 VND to 50,000,000 VND may be imposed for forcing customers to buy insurance to disburse loans in Vietnam.
Note, that the aforementioned fine is only applicable to individuals. The fine for an organization will be twice that of an individual. Therefore, a bank forcing customers to buy insurance to disburse loans in Vietnam may face a fine ranging from 80,000,000 VND to 100,000,000 VND.
Additionally, the bank may have part of its operations related to the violation suspended for 02 - 03 months as specified in its establishment and operation license.
How much is the fine imposed fon a bank forcing customers to buy insurance to disburse loans in Vietnam? (Image from the Internet)
What are the methods for making reports on forcing customers to buy insurance for loan disbursement by banks in Vietnam?
Banks, when engaging in insurance-related activities, should only encourage customers to voluntarily participate in insurance rather than making it a mandatory condition for loan disbursement.
If encountering such a situation, the State Bank of Vietnam has set up a hotline to capture and handle complaints and suggestions from citizens, agencies, and businesses related to banking operations.
Therefore, citizens can call the following hotline to make reports on forcing customers to buy insurance for loan disbursement by banks:
- Fixed line: (024) 3936.1017
- Mobile phone: 0942.966.854
- Or send an email to: duongdaynong.cqttgsnh@sbv.gov.vn
What are the prohibited acts in the insurance business?
Article 9 of the Insurance Business Law 2022 stipulates the following prohibited acts in the insurance industry:
- Insurance, reinsurance, reinsurance ceding and insurance brokerage business activities are performed when none of establishment permits or business licences is obtained.
- Insurance, reinsurance, reinsurance ceding and insurance brokerage business activities are performed outside of the permissible scope of business.
- Insurance brokerage, insurance ancillary service business is done when eligibility conditions for doing so as prescribed in law are not met.
- The following fraudulent acts are committed:
+ Conspire with insurance beneficiaries to settle insurance claims and pay insurance illegally;
+ Forge documents, intentionally falsify information shown in documents required for filing claims for insurance coverage and payout;
+ Forge documents, deliberately falsify information to reject payment of insurance indemnities and insurance when insurable events happen;
+ Cause self-harm or bodily self-injury or deliberately self-inflicted loss or damage to property to claim insurance benefits.
- Using threats and force to obtain the consent to insurance contracts.
What are the classes of compulsory insurance in Vietnam?
Under Article 8 of the Insurance Business Law 2022 as follows:
Compulsory insurance
1. Compulsory insurance means an insurance product or plan serving the purposes of protection of public interest, environment and social safety.
2. Classes of compulsory insurance, including:
a) Compulsory insurance against civil liability of vehicle owner;
b) Compulsory fire and explosion insurance;
c) Compulsory insurance in the construction industry;
d) Classes of compulsory insurance prescribed in other laws that meet the regulations laid down in clause 1 of this Article.
Thus, currently, classes of compulsory insurance in Vietnam include:
- Compulsory insurance against civil liability of vehicle owner;
- Compulsory fire and explosion insurance;
- Compulsory insurance in the construction industry;
- Classes of compulsory insurance prescribed in other laws that meet the regulations in Clause 1, Article 8 of the Insurance Business Law 2022.
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