Insurance firms, agents will face stricter scrutiny
Insurance firms, agents will face stricter scrutiny
Insurance companies and their agents face stricter scrutiny as a number of Government decisions designed to regulate agents qualifications are set to take effect in November.
Agents, who consult and sell policies independently, must possess insurance-relevant university degrees and certificates, according to Government Decision 73.
Risk analysts must possess a university or higher degrees in risk management majors or relevant certificates.
The decision also requires insurance actuaries, who analyse financial risks, to possess a university or higher degrees.
Simultaneously, Government Decision 98 has been amended to deliver additional penalties to firms and agents who violate Viet Nams Laws on Insurance Business.
Agents who fail to adhere to technical standards and responsibilities such as providing policies without a signed contract or before a contract was signed, face fines of up to VND30 million (US$1,300). Their respective firms face double said amount.
Agents who sell policies or support services they are not allowed or not qualified to provide could be fined up to VND70 million ($3,000) with their firms being fined double.
Those who break the law may also have their insurance licenses revoked.
The Government decisions, which were drafted by the Ministry of Finance, were based on Law 42/2019/QH14 to govern and overlook insurance support services in Viet Nam. The law has been approved by the National Assembly in June.
Viet Nam is considered by experts as a fast-growing market thanks to rising income and robust GDP growth yet the country has one of the worlds lowest insurance penetrations at just less than one per cent of GDP.
The average premium was reported at $30, significantly lower than the global average of $595 and Southeast Asias average of $74, according to a report released in June by the Insurance Supervisory Authority under the Ministry of Finance, the countrys regulatory body for insurance activities.
The country has 64 insurance companies, including 30 non-life insurers, 18 life insurers, two reinsurance companies and 14 insurance brokerage companies. There are up to 850 non-life insurance products and 450 life insurance products sold on the Vietnamese market.
