Penalties for violations of providing insurance products in Vietnam from February 15, 2025

Penalties for violations of providing insurance products in Vietnam from February 15, 2025​ (Image from Internet)

On December 30, 2024, the Government of Vietnam issued Decree 174/2024/ND-CP stipulating the penalties for administrative violations in the field of insurance business.

Penalties for violations of providing insurance products in Vietnam from February 15, 2025

Article 16 of Decree 174/2024/ND-CP prescribes penalties for violations in providing insurance products in Vietnam from February 15, 2025 as follows:

- A fine ranging from 30,000,000 VND to 50,000,000 VND for insurers, foreign non-life insurers' branches, mutual organizations providing microinsurance, and insurance brokerage enterprises that do not notify the Ministry of Finance about the provision of insurance services or products online within 7 working days from the date of offering these services or products. This includes details about the enterprise, services, products, the format of the offering organization, and other pertinent information related to the online provision of insurance services or products.

- A fine ranging from 60,000,000 VND to 100,000,000 VND for insurers, foreign non-life insurers' branches that commit any of the following violations:

+ Failure to provide policyholders with documents during the conclusion of insurance contracts as prescribed by law, stipulated at point a, clause 2, Article 20 of the Law on Insurance Business 2022;

+ Failure to clearly and fully explain to policyholders about insurance benefits, insurance liability exclusions, and the rights and obligations of the policyholder when concluding an insurance contract as prescribed by law, stipulated at point b, clause 2, Article 20 of the Law on Insurance Business 2022;

+ Failure to provide policyholders with proof of the insurance contract conclusion as prescribed by law, stipulated at Article 18 of the Law on Insurance Business 2022;

+ Threatening or coercing the conclusion of an insurance contract, as stipulated at clause 5, Article 9 of the Law on Insurance Business 2022.

In addition to being fined, organizations committing violations are required to undertake remedial measures as follows:

- Must notify the Ministry of Finance regarding the provision of insurance services or products online for the violation at clause 1, Article 16 of Decree 174/2024/ND-CP;

- Must provide policyholders with documents during the conclusion process for insurance contracts not yet expired at the time of discovering the violation for the violation at point a, clause 2, Article 16 of Decree 174/2024/ND-CP;

- Must clearly and fully explain to policyholders about insurance benefits, insurance liability exclusions, and the rights and obligations of policyholders for insurance contracts not yet expired at the time of discovering the violation for the violation at point b, clause 2, Article 16 of Decree 174/2024/ND-CP;

- Must provide policyholders with proof of the conclusion of insurance contracts not yet expired at the time of discovering the violation for the violation at point c, clause 2, Article 16 of Decree 174/2024/ND-CP.

More details can be found in Decree 174/2024/ND-CP effective from February 15, 2025.

For cases where administrative penalty decisions have been issued before the effective date of this Decree, but after the effective date of Decree 174/2024/ND-CP, individuals and organizations subject to administrative penalties may appeal, which will be resolved according to the Decree governing administrative penalties in the insurance business field that was effective at the time of the administrative violation.

For administrative violations occurring and concluding before Decree 174/2024/ND-CP comes into effect but discovered or being considered for penalties afterwards, the Decree effective at the time of the violation will be applied. However, if Decree 174/2024/ND-CP does not prescribe legal responsibility or prescribes a lighter responsibility for the violator, then the penalty regulations of Decree 174/2024/ND-CP will be applied.

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