Latest operating principles of insurance agents in Vietnam

Latest operating principles of insurance agents in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Latest operating principles of insurance agents in Vietnam

Operating principles of insurance agents in Vietnam according to Article 127 of the Law on Insurance Business 2022 are as follows:

- Persons cannot be insurance agents for other insurance companies or branches of foreign non-life insurance companies operating in the business lines or sectors that are the same as those in which the principal insurance companies or branches of foreign non-life insurance companies for which these persons are acting as agents are performing transactions.

A person acting as an insurance agent for a mutual providing microinsurance products shall not be allowed to act as the insurance agent for the other mutual providing microinsurance products.

- An entity cannot be an insurance agent for the other insurance company or branch of a foreign non-life insurance company or mutual providing microinsurance products without the written approval from the insurance company, branch of the foreign non-life insurance company or mutual providing microinsurance products for which that entity is acting as the agent.

- Persons rendering insurance agent services or employees of entities doing insurance agent business can only render insurance agent services for insurance schemes or products in which they are trained.

- Biodata about persons rendering insurance agent services and staff members of entities rendering insurance agent services that are directly involved in insurance agent services must be registered and updated in the database of insurance agent services according to Article 11 Article 127 of the Law on Insurance Business 2022.

- Persons that have obtained certificates of practising in the insurance agent business sector, but have not operated in the insurance agent business sector, during 03 consecutive years must take tests to obtain new ones before commencement of the insurance agent services.

2. Rights and obligations of insurance agents in Vietnam

Rights and obligations of insurance agents according to Article 129 of the Law on Insurance Business 2022 are as follows:

* Insurance agents shall have the following rights:

- Decide on and conclude insurance agent agreements. This right is intended for insurance companies, branches of non-life insurance companies or mutuals providing microinsurance products in accordance with law;

- Have access to information and preconditions for successful execution of insurance agent agreements;

- Receive insurance agent commissions, rewards and grants for insurance agents and other interests from insurance agent services according to insurance agent agreements;

- Request insurance companies, branches of non-life insurance companies and mutuals providing microinsurance products to return security deposit or collateral under contractual terms and conditions of insurance agent agreements;

- Exercise other rights in accordance with law.

* Insurance agents shall take on the following obligations:

- Discharge their contractual obligations;

- Provide security deposit or collateral on behalf of insurance companies, branches of non-life insurance companies and mutuals providing microinsurance products if this obligation is prescribed in an insurance agent agreement;

- Fulfill financial obligations in accordance with law;

- Provide insurance product consulting, offering and marketing services; provide full and accurate information about insurance products, insurance companies, branches of non-life insurance companies or mutuals providing microinsurance products to policyholders and give clear and comprehensive explanations about insurance benefits, disclaimer clauses, rights and obligations of policyholders; avoid providing information for policyholders without approval from policyholders; implement other obligations falling within the scope of authorization specified in insurance agent agreements;

- Participate in training and knowledge updating sessions designed for insurance companies, branches of non-life insurance companies and mutuals providing microinsurance products;

- Submit to the inspection and supervision by insurance companies, branches of non-life insurance companies or mutuals providing microinsurance products;

- Refund insurance companies, branches of foreign non-life insurance companies or mutuals providing microinsurance products sums that they have paid as insurance indemnities or coverage to insured persons or policyholders in the event that insurance agents or staff members of entities rendering insurance agent services are in breach of insurance agent agreements, causing loss or damage to legitimate rights and interests of these insured persons or policyholders;

- Adhere to eligibility standards for operation of insurance agents that are set by insurance companies, branches of non-life insurance companies and mutuals providing microinsurance products;

- Protect client privacy and personal information of clients; use client’s information to serve permitted purposes; avoid providing information for any third party without client's consent, except as provided in law;

- Take on other obligations prescribed by law.

* Insurance agents shall be prohibited from performing the following acts:

- Provide false information and advertisements about insurance services and scope of business of insurance companies, branches of non-life insurance companies and mutuals providing microinsurance products; insurance terms and conditions prejudicing legitimate rights and interests of policyholders;

- Prevent policyholders from providing information related to insurance contracts or incite policyholders or insured persons not to declare information related to insurance contracts;

- Compete for clients by precluding, enticing, bribing and threatening employees or clients of other insurance companies, branches of foreign non-life insurance companies, mutuals providing microinsurance products, insurance agents or insurance brokerage companies;

- Incite clients to nullify insurance contracts that are in effect in any form.

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