Foreign insurers found violating multiple Vietnamese regulations
Foreign insurers found violating multiple Vietnamese regulations
Five foreign insurance companies providing life and non-life insurance as well as insurance broking have been discovered to be committing a set of violations.
Newspaper infonet reported that in the third quarter of 2016, the Insurance Supervisory Authority, under the Ministry of Finance (MoF), carried out three investigations on life insurers Dai-ichi Life Vietnam and Prudential Vietnam, and non-life insurer Cathay Vietnam Ltd. The authority conducted two more investigations on insurance brokers Marsh Vietnam and Jardine Lloyd Thompson.
The department discovered that the life insurers did not comply with the regulations i separating the owners’ and the company’s funds from that of the policy holders. Further violations were uncovered in the provisioning, paying the proceeds, management and payment of commission to agents, the monitoring of debts, and accounting.
The non-life insurers were found not complying with the MoF’s regulations on the minimum premium for the compulsory fire and explosion insurance, insurance for vehicles, and health insurance. Their policies on training, certifying, and managing agents were also different from Vietnamese legislation. They paid agents more than the allotted ceiling set by regulation, paid proceeds when they were not supposed to and even when there was simply not enough verifiable proof.
Similarly, broking companies committed several counts of violations, including acting outside the mandate or the physical territory warranted by their licenses, or conducting business without adequate documentation. They also violated regulations on monitoring and accounting debts, and accounting in general.
The department proposed that the MoF impose monetary fines on the companies and admonished them to adapt legally fitting policies. The companies also have to report higher corporate income tax than they previously declared and the department has collected VND625 million ($28,000) of this additional sum.
In the first six months of 2016, the total premium revenue of all insurers in Vietnam was estimated at VND28.8 trillion ($1.3 billion), up 22.58 per cent on-year. Of this amount, non-life premium was VND17.6 trillion ($800 million), up 15.3 per cent, while life premium was VND21.17 trillion ($950 million), up 29.37 per cent.
