On February 24, 2023, the State Bank of Vietnam (SBV) organized a Conference on the insurance agency operations of the credit institutions. The Conference was held in hybrid format (both in-person and virtually), under the chairmanship of Deputy Governor Doan Thai Son of the SBV, with the participants being representatives of several entities under the SBV as well as the commercial banks.
At the Conference, the representative from the Banking Supervision Agency delivered an overview presentation on the insurance agency operations of the domestic commercial banks.
After that, the participants from the credit institutions, the SBV provincial and municipal branches provided several feedbacks on the situations and the orientations for the development of the insurance agency operations of the credit institutions; the implementation results of the SBV's directions on the insurance agency operations, and also discussed about the difficulties and obstacles, as well as the orientations for the insurance agency operations of the domestic commercial banks in the future.
Speaking at the Conference, Deputy Governor Doan Thai Son assessed that, in the recent years, the distribution of insurance products via banks has become a trend thanks to its convenience, efficiency and the benefits for all involved parties. Over the past time, the SBV has regularly issued documents directing the credit institutions to strictly comply with the legal regulations related to the insurance operations.
However, recently some mass media agencies have reported the cases of credit institutions “coercing” their customers into buying insurance. Dealing with this information, the SBV has directed the credit institutions to urgently review and seriously correct the insurance agency operations in their entire systems, stopping all cases of coercing customers into buying insurance products in any form; strictly handling with any violation of the internal regulations and the laws related to insurance; etc.
The SBV has also established a hotline to receive and promptly handle with any feedbacks and recommendations of the people and the businesses related to the insurance agency operations of the credit institutions.
Overview of the Conference.
The SBV Deputy Governor further requested the credit institutions to strictly comply with the applicable regulations as stipulated in the Law on Credit Institutions, the Law on Insurance Business, and other applicable legal texts related to the insurance agency operations.
The credit institutions must provide accurate and full information on the insurance products and the insurance companies to the policy buyers; explain clearly and completely about the insurance benefits, the benefit payable exclusions, the rights and obligations of the insurance buyers; make sure that the customers understand that insurance products distributed through the credit institutions are not products of the credit institutions. The credit institutions must not share any information about the potential insurance buyers without their permission, nor coerce their customers into buying insurance products.
The credit institutions are further requested to enhance the internal control and supervision over the insurance agency operations in their whole systems in order to promptly identify and handle with any violations related to these operations, especially the act of “coercing” customers, combining optional insurance products with the provision of banking products and services.
The credit institutions must further review and update their internal regulations on the insurance agency operations, ensuring full compliance with the laws; continue to review, study to develop and update the key performance indicators (KPIs) in order not to put pressure on their employees/business units, preventing possible cases of any employee/business unit “coercing” their customers into buying insurance products; continue to strengthen, disseminate and communicate the laws on insurance operations to all credit officers and officers involved in the insurance agency operations.
The SBV Deputy Governor went on to request the credit institutions to consider to implement the insurance agency operations in another form, in which the bank employees introduce the customers who want to buy insurance, and the insurance companies directly advise and offer the customers with their insurance products; etc.
For the SBV entities, Deputy Governor Doan Thai Son requested them, upon receiving feedbacks and recommendations of the people and the businesses related to the insurance agency operations through the hotline, to classify, handle and transfer to the Banking Supervision Agency, the SBV branches in the city or province where the case occurs in order to take action in accordance with the laws.
The SBV provincial and municipal branches are requested to receive and verify the information in the feedbacks and recommendations of the people and the businesses. In case of detecting any violation, the SBV provincial and municipal branches shall make a record of administrative sanctions against the violation and transfer the dossiers on the violation to the Banking Supervision Agency; periodically summarize and report on the sanctioning results to the Banking Supervision Agency to monitor and follow up on the sanctioning.
The Banking Supervision Agency shall coordinate with the Insurance Supervisory Authority (under the Ministry of Finance) to handle with any violations in accordance with the laws, and periodically summarize the information to report to the competent authorities.
The Banking Supervision Agency, the SBV provincial and municipal branches are requested to strengthen the inspection and supervision of the insurance business and insurance agency operations of the credit institutions; integrate this inspection requirement into their annual inspection plans.
LK