How do the State Bank of Vietnam and the Ministry of Finance of Vietnam handle the problem of forcing customers to buy insurance when depositing money and taking loans from banks?
- What are the administrative penalties for forcing customers to buy insurance when borrowing money?
- The State Bank of Vietnam speaks out about forcing customers to buy insurance when depositing money and taking loans from banks?
- The Ministry of Finance of Vietnam directs to strengthen inspection and supervision so that there is no longer a situation where bank employees force customers to buy insurance when taking loans?
What are the administrative penalties for forcing customers to buy insurance when borrowing money?
Pursuant to Clauses 2 and 3, Article 17 of Decree 98/2013/ND-CP (supplemented by Clause 7 Article 1 of Decree 48/2018/ND-CP) stipulating as follows:
Penalties for violations against regulations on provision of life insurance and health insurance
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2. A fine of between VND 40,000,000 and 50,000,000 for any of the following violations:
a) Failing to provide sufficient information about the insurance contract; failing to explain the terms and conditions of the insurance contracts to the insurance buyer when concluding the insurance contract;
b) Failing to inform the insurance buyer of the status of the insurance contract as prescribed by law;
c) Forcing conclusion of auxiliary insurance contracts enclosed to the main insurance contracts;
d) Providing insurance products of investment-linked insurance, retirement insurance, or health insurance against the law.
dd) Forcing entities to buy insurance in any manner.
3. Additional penalties:
Suspension of operation for 02 - 03 months, for a part of content and scope directly related to administrative violations, in license of establishment and operation, for violations specified in Clause 2 of this Article.
Thus, in case bank employees force customers who borrow money, deposit money to buy insurance, they can be administratively penalized with a fine of VND 40-50 million.
On the other hand, the operation may be suspended from for 02 - 03 months, for a part of content and scope directly related to administrative violations, in license of establishment and operation.
Note, the above fine level applies to violators, in case of violations by organizations, the fine level is 2 times higher than that of individuals.
How do the State Bank of Vietnam and the Ministry of Finance of Vietnam handle the problem of forcing customers to buy insurance when depositing money and taking loans from banks?
The State Bank of Vietnam speaks out about forcing customers to buy insurance when depositing money and taking loans from banks?
In a press release on the afternoon of February 21, 2023, the State Bank of Vietnam stated that in the past time, in order to protect the legitimate rights and interests of customers using banking and financial services, and at the same time, ensure that credit institutions strictly comply with the provisions of the law, the State Bank has regularly issued documents to direct and warn credit institutions about the provision of insurance-related services.
According to that, the State Bank requires credit institutions to strictly abide by the provisions of the Law on Credit Institutions, the Law on Insurance Business and other relevant documents; provide complete and accurate information about insurance products, insurance enterprises, and insurance buyers, and fully and clearly explain insurance benefits, insurance liability exclusions, and rights and obligations of the insurance buyer. Credit institutions are not allowed to voluntarily declare information to the insurance buyer without the consent of the insurance buyer; It is strictly forbidden to "force" customers to buy insurance.
The State Bank also directs credit institutions to review, research, develop and update performance evaluation criteria so as not to put pressure on employees/business units in introducing and selling products. insurance products, not allowing employees/business units to "force" customers to buy insurance; strengthen internal inspection and control activities to detect and promptly handle violations in insurance agency activities.
However, recently, a number of mass media continue to reflect the phenomenon that some credit institutions "force" customers to buy insurance when borrowing, increase interest rates / "force" customers to pay off their loans if canceling insurance contracts, providing incomplete and unclear information about insurance products, transferring from savings at the customer's bank to buying life insurance, etc.
Previously, on February 15, 2023, the SBV issued Official Letter 506/NHNN-TTGSNH in 2023 on the provision of insurance-related services. In this official letter, the State Bank of Vietnam continues to direct credit institutions to strictly abide by the provisions of law and the direction of the State Bank on business activities and insurance agents;
Urgently review and seriously correct the provision of insurance-related services throughout the system, so as not to allow the case that business officers/units "force" customers to buy insurance in any form; at the same time, strictly handle cases of violations of internal regulations and laws related to the insurance field.
At the same time, the State Bank of Vietnam affirmed that it will take strict measures in case it is discovered that employees/business units "force" customers to buy insurance and credit institutions take full responsibility before the law with this act.
In addition, the State Bank of Vietnam has set up a hotline to capture and handle complaints and suggestions of people and agencies and businesses related to banking activities. Therefore, people can call the SBV's hotline as follows to report the situation that the bank forces customers to take out loans to buy insurance:
* Landline number: (024) 38266344/ (024) 39361017
* Email: duongdaynong.cqttgsnh@sbv.gov.vn.
The Ministry of Finance of Vietnam directs to strengthen inspection and supervision so that there is no longer a situation where bank employees force customers to buy insurance when taking loans?
The Ministry of Finance has just issued Document No. 1544/BTC-VP on strengthening inspection and supervision of activities in the insurance market.
Accordingly, the Ministry of Finance said that in 2022, the Ministry has repeatedly directed and requested to strengthen the inspection, examination and close supervision of the activities of insurance enterprises and companies. Insurance brokerage to minimize fraud, insurance fraud as well as maximize the interests of insurance buyers.
At the same time, at the briefing meeting of the Ministry of Finance in September 2022, Minister Ho Duc Phuc assigned the Insurance Management and Supervision Department (QL&GS) to actively monitor the insurance market closely to prevent any situation from happening. Bank employees entice, suggest, force customers to buy insurance along with other financial products when borrowing capital, conduct inspection, examination and strictly handle violations.
The official dispatch also stated that through the media's feedback, in recent years, there are still situations where employees of some banks introduce, solicit, and force customers to buy life insurance and investment-linked insurance when going to a bank to deposit or borrow money.
In this regard, Minister Ho Duc Phuc continued to request the Insurance Administration and Supervision Department to step up the management and supervision of the insurance market's activities.
Carry out inspection and examination of insurance companies, including insurance agents and insurance brokers, to prevent the situation of insurance enterprises associated with banks forcing customers to the transaction must buy new insurance to lend capital or introduce to depositors to invest in associated insurance products contrary to relevant laws.
At the same time, the Ministry of Finance directed the organization to publish a hotline (phone number, email) to receive feedback from people and businesses about the above situation.
Assign officers to be on duty 24/7 and promptly check and verify information to take measures to inspect, coordinate with police agencies and the State Bank's inspection and supervision agencies to prevent and strictly handle under the law.
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