The ministry (MoF) has responded to inquiries regarding inspection of life insurance companies during the regular press briefing for the third quarter.
|MoF not finished with scrutiny of insurers, illustration photo/ Source: freepik.com
Doan Thanh Tuan, deputy director of Insurance Supervision at the MoF stated, “We have successfully completed our inspections on AIA and Dai-ichi. Currently, we are in the process of inspecting Manulife and another firm. Over the remainder of this year, we will continue to scrutinise insurance companies as outlined in our planned schedule.”
Concerning implementation of inspection findings for the four life insurance companies publicly named as Prudential, Sun Life, BIDV Metlife, and MB Ageas, Tuan revealed, “Our findings encompass key aspects of professional recommendations and financial considerations. The companies have diligently complied with the professional recommendations. Regarding financial aspects, companies are collaborating with tax authorities to ensure compliance.”
In the conclusion of the inspection of the four insurance companies, Tuan also stressed the need for corrective action. “We have identified a series of irregularities within the activities of insurance advisors, and we are requesting the CEOs of these companies to take stringent corrective measures and provide written reports,” he said.
Common irregularities among these insurance companies include, as Tuan pointed out, the improper execution of procedures and the sale of insurance products, failure to ensure the quality of insurance product consultations, and inaccurate customer information collection during the advisory process. Bank employees have also failed to comply with the regulations regarding the use of insurance agent identification numbers.
The MoF has taken a strict stance, requiring these four companies to increase their revenue significantly to account for corporate income tax, due to misallocating expenses.
They are required to supplement their taxable income, with Prudential contributing $29.41 million, Sun Life contributing over $25.3 million, BIDV Metlife contributing $7.33 million, and MB Ageas contributing $105,500.”
Since late 2022, numerous customers have lodged complaints about Manulife’s Peaceful Investment Mind product distributed through SCB, the banking affiliate of Van Thinh Phat Group.
Tuan shared the common thread of these complaints, stating, “Customers, when making deposits at the bank, were encouraged to invest for higher returns, but the investments were subsequently characterised as life insurance.”
At the end of June, the MoF announced the findings of a specialised inspection into the sale of insurance products through banks and related matters at several insurance companies. The inspection covered the year 2021 and related periods.
According to the inspection’s findings, in 2021, Prudential Vietnam received almost 1,800 customer complaints related to the sale of insurance products through banks. It revealed violations by 10 insurance agents and 25 bank employees in their agency operations.
Sun Life Vietnam, during 2021, received around 1,070 customer complaints related to insurance contracts distributed through banks. During this period, Sun Life Vietnam sold insurance products through ACB and TPBank.
As for MB Ageas, in 2021, they received 595 complaints regarding insurance contracts issued through bank channels, with almost 60 per cent coming through a hotline and the rest from various departments within the company. MB Ageas, at that time, was involved in selling insurance through MBBank and financial company MB Shinsei.
At BIDV Metlife, an inspection of a sample group revealed 21 instances where insurance agents and bank employees failed to adhere to proper insurance sales practices.
Against the backdrop of a crisis of trust in the insurance market, Minister of Finance Ho Duc Phoc had previously announced his intent to rectify and rigorously address the wrongdoings of the companies. “We will take significant actions to correct the situation, ensuring that the industry operates within the bounds of law and with integrity,” he said.
In addition to the issue of inspecting insurance companies, the MoF also provided insights into the state of the bond market.
Deputy Minister of Finance Nguyen Duc Chi said, “The government has taken steps to alleviate difficulties in the market, along with support from monetary policies, to stabilise the real estate market. In addition, the MoF has successfully organised a separate public bond trading market, which has helped restore investor confidence.”
|Life insurers under fire over policy deficiencies
Vietnam is working to urgently address shortcomings in the cross-selling activities of life insurance policies, highlighting concerns over advisory quality and the need for comprehensive market inspections.