Do banks have the right to consult and sell investment-linked insurance to customers when they borrow money in Vietnam?

Do banks have the right to consult and sell investment-linked insurance to customers when they borrow money in Vietnam?

Pursuant to Clause 3, Article 53 of Circular 67/2023/TT-BTC stipulating the sale of investment-linked insurance as follows:

Insurance products provided through insurance agents

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3. Insurance agent organizations must comply with the following regulations:

a) Explain to the policyholder that the insurance products distributed through the insurance agent organization are insurance products. Participation in the insurance product is not a mandatory condition for using other products and services of the insurance agent organization.

b) Be responsible for comparing data on newly launched insurance contracts, insurance premium revenue, and effective insurance contracts implemented by the insurance agent organization with the insurance company on a monthly basis.

c) Financial institutions and foreign bank branches that carry out insurance agent activities are prohibited from consulting, introducing, promoting, or arranging the conclusion of investment-linked insurance contracts for customers within 60 days before and 60 days after the full amount of the loan is disbursed.

Therefore, banks are prohibited from consulting or selling investment-linked insurance to customers who are applying for loans within 60 days before and 60 days after the full amount of the loan is disbursed.

Do banks have the right to consult and sell investment-linked insurance to customers when they borrow money in Vietnam? - Source: Internet

What are regulations for individual insurance agents when providing investment-linked insurance products in Vietnam?

As prescribed in Clause 2 of Article 53 of Circular 67/2023/TT-BTC, when providing investment-linked insurance products in Vietnam, individual insurance agents and employees of insurance agent organizations must follow following regulations:

- Collect information and complete the documents specified in Clause 2.b of Article 30 of Circular 67/2023/TT-BTC;

- Inform the policyholder about the calculation tool that helps the policyholder to build their own insurance plan and the rules and terms of the product that the customer plans to participate in on the website of the insurance company specified in clause 4, Article 97 of Decree 46/2023/NĐ-CP.

Analyze customer information, including the needs and financial capabilities of the policyholder; survey the policyholder's risk tolerance level and then advise the policyholder to participate in the appropriate unit-linked fund (for unit-linked insurance products).

- Explain clearly to the policyholder about the benefits of the product and the specific risks of the product, and require the policyholder to confirm in the documents specified in Article 30 of Circular 67/2023/TT-BTC.

- Not compare or guarantee that the investment results of one unit-linked fund are better than those of another unit-linked fund or of another insurance company.

+ Record some of the content related to product consulting at the time the policyholder signs the insurance proposal.

+ The recording content must ensure at least the following information:

+ Name, insurance agent certificate number;

+ Name, address, phone number of the policyholder;

+ Content of the consultation of the agent or employee in the organization performing the agency activity on insurance benefits, investment benefits and investment risks that the policyholder may encounter when participating in the investment-linked insurance product, information on the fees charged by the insurance company to the policyholder and the conditions for receiving the benefits according to the agreement in the insurance contract;

+ Notification of the insurance premiums and payment terms that the policyholder chooses to confirm that they are appropriate to the policyholder's financial capacity;

+ Notification to the policyholder of the time to consider participating in insurance, the rights and obligations of the policyholder, including clearly stating the obligation to honestly declare, the main contents of the agreed benefits in the insurance contract and the conditions for receiving those benefits;

+ Confirmation of the policyholder's participation in insurance on a voluntary basis and in accordance with the financial needs and insurance needs of the policyholder.

In cases where there are other related information and these information relate to private life and personal secrets, the recording must be agreed by the policyholder to record the content of that information.

Insurance companies must ensure compliance with this regulation no later than 1 year from November 2, 2023.

What are requirements for life insurance companies when providing investment-linked insurance products in Vietnam?

As prescribed in Clause 5 of Article 53 of Circular 67/2023/TT-BTC, the requirements for life insurance companies when providing investment-linked insurance products in Vietnam are as follows:

- Independently review the content of the product consulting provided by the agent. For cases where the product is provided through an insurance agent organization, the review must be conducted before the decision to issue the contract is made.

The content of the review must be aimed at assessing whether the policyholder is participating in the product on a voluntary basis and whether the products being advised are appropriate for the policyholder's financial needs.

- Do not issue a contract of insurance in the event that the content of the recording as specified in Clause 2.dd, Article 53 of Circular 67/2023/TT-BTC does not have the policyholder's confirmation of participating in insurance on a voluntary basis, in accordance with the financial capacity, insurance needs of the policyholder.

- Store and secure the documents and recording data as specified in Clause 2.dd, Article 53 of Circular 67/2023/TT-BTC for at least 05 years from the date the insurance contract takes effect.

Life insurance companies may only use this information for the purpose of evaluating the quality of agent activities, resolving complaints and objections related to agent activities, and anti-fraud activities in the insurance business, and providing to the competent authority upon request.

Best regards!