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The Ministry of Finance (MOF) has recently proposed raising fine levels for a lot of violations insurance-related violations.
Such is provided in a draft decree revising the decrees concerning the sanctioning of administrative violations in the field of insurance business and lottery business, including Decree 98 of 2013, Decree 48 of 2018, Decree No. 80 of 2019, and Decree 102 of 2021.
Specifically, the fine level for violations of life insurance and health insurance regulations would increase to VND 90-100 million (USD 3,702-4,113) from the current level of VND 40-50 million and there would be three cases in which insurers would be imposed a fine level of VND 90-100 million.
Firstly, their insurance brochures do not provide truthful information on the rules and terms of insurance products and clearly state insurance benefits and exclusion of insurance liability, or provide unambiguous information, making customers misunderstand the insurance benefits.
Secondly, their insurance brochures do not explicitly state that the products are not products of distribution partners but insurance products provided by insurance businesses or branches of foreign non-life insurance businesses and that the purchase of the insurance products is not a mandatory requirement for the performance or enjoyment of another service of the distribution partners.
Thirdly, they provide investment-linked insurance, pension insurance and health insurance products in contravention of law.
The fine level of VND 90-100 million would also apply to insurance businesses, foreign non-life insurance businesses’ branches and mutual organizations providing microinsurance that pay commission, bonus and support or provide other interests to insurance agents in excess of the maximum levels set by the MOF.
Noteworthily, the draft proposes a fine of VND 180-200 million (USD 7,404-8,227) for acts of providing transboundary insurance services in Vietnam when failing to fully meet law-prescribed conditions or not having head offices in countries or territories which have signed with Vietnam commercial treaties containing agreements on provision of transboundary insurance services in Vietnam. Foreign insurers that provide transboundary insurance services not via insurance brokers licensed to operate in Vietnam would also be subject to this fine level.
By: VLLF
