Vietnam: The Ministry of Finance requires strict handling of life insurance agents who violate the law? What are the rights of the policyholder?
The Ministry of Finance of Vietnam requires strict handling of insurance agents who violate the law?
Immediately after a document was sent to MVI Life Insurance Co., Ltd. requesting to strengthen control over the business's operations, on the afternoon of April 10, 2023, the Insurance Management and Supervision Department (Ministry of Finance) issued the Official Dispatch No. 453/QLBH-NT in 2023 to life insurance enterprises, requesting to strengthen inspection and supervision of the performance of insurance agency contracts.
This is the latest move by the regulator to further strengthen control over the life insurance business.
In Official Dispatch No. 453/QLBH-NT in 2023, it is clear that through the mass media, the Insurance Management and Supervision Department receives information reflecting on the quality of consultancy and support for entering into insurance contracts of life insurance agents.
The Department of Insurance Management and Supervision proposes life insurance businesses to do the following:
- Strengthen inspection and supervision of the performance of insurance agency contracts, evaluate the quality of insurance agents' advice, introduction and offer for sale.
- Request the agent to provide complete and accurate information on insurance products of the insurance enterprise to the insurance buyer.
- Strictly handle the responsibility of insurance agents in case of violating the law in performing activities authorized by insurance enterprises.
- The Insurance Administration and Supervision Department also requested these businesses to review and improve the quality of customer care services, complete professional processes, internal regulations, policies on risk management, ensure compliance with the law.
- When customer complaints arise, insurers must actively work and resolve customer complaints; In case the customer has reported through the press agencies about the signing and performance of the contract with the insurance enterprise, the insurance enterprise must actively respond to objective and transparent information to press agencies.
Vietnam: The Ministry of Finance requires strict handling of life insurance agents who violate the law? What are the rights of the policyholder?
What are the rights of the policyholder according to current law?
Pursuant to the provisions of Clause 1, Article 21 of the 2022 Law on Insurance Business in Vietnam stipulating as follows:
Rights and obligations of the policyholder
1. The policyholder shall have the following rights:
a) Decide on the insurer or the foreign non-life insurer’s branch with which the policyholder may conclude the insurance contract;
b) Request the insurer or the foreign non-life insurer’s branch to provide proposal and questionnaire related to risks covered against, subject matters insured, rules, terms and conditions of insurance, and interpret contractual terms and conditions;
c) Request the insurer or the foreign non-life insurer's branch to provide proof of conclusion of the insurance contract referred to in Article 18 herein;
d) Request the insurer or the foreign non-life insurer's branch to issue premium invoices as agreed upon in the insurance contract and stipulated in regulatory provisions of relevant law;
dd) Revoke the insurance contract under clause 3 of Article 22 and 35 or unilaterally terminate the insurance contract under Article 26 herein;
e) Request the insurer or the foreign non-life insurer's branch to pay insurance claims or coverage or indemnity in case of any policy event that occurs;
g) Transfer the insurance contract under contractual terms and conditions or as provided by law;
h) Other rights stipulated by law.
Thus, the policyholder will have full rights under the above provisions.
What are the principles of conclusion and execution of insurance contracts in Vietnam?
According to Article 16 of the 2022 Law on Insurance Business in Vietnam, the conclusion and implementation of insurance contracts must adhere to the fundamental principles in civil law and the following principles:
- Principle of utmost good faith: Parties to an insurance contract must provide information and implement contractual rights and obligations in a most honest and trustful manner, and must place the absolute mutual trust in each other during the period of conclusion and implementation of insurance contracts;
- Principle of insurable interest: Policyholders must be entitled to the insurable benefit varying according to specific types of insurance contract under this Law;
- Principle of indemnity: The amount of coverage or indemnity that the insured can get shall not exceed the actual loss incurred in a policy event, unless otherwise agreed upon in the insurance contract;
- Principle of subrogation: the insured shall be responsible for giving the insurer or foreign non-life insurer the right to claim the amount of loss from the third party responsible for such loss if such amount falls within the permissible loss limit. This principle shall not apply to life and health insurance contracts;
- Principle of unpredictable risk: in order for a risk to be covered or insured against, it must be a sudden or unanticipated one.
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