On the morning of November 18, the National Assembly discussed the draft Law amending and supplementing a number of articles of the Law on Insurance Business (KDBH).
Delegate Ha Sy Huan (Thai Nguyen Delegation) commented on supervising insurance business activities through banks. Circular 34 dated June 30, 2024 of the State Bank stipulates: Commercial banks and foreign bank branches shall conduct insurance agents according to the provisions of the Law on Social Insurance and guiding documents.
However, he pointed out that the past practice has shown many shortcomings in implementing social security through banks, especially the situation of forced insurance purchase associated with loans. Therefore, in this amendment to the draft law, the delegate suggested that social security activities through banks must be placed within a strict legal framework, with substantial supervision, strict sanctions, ensuring and protecting the legitimate rights and interests of insurance participants.
"I propose to add to the draft law regulations on the principles and supervision of social security. In particular, it clearly stipulates the transparency between insurance consulting and lending activities, capital mobilization of banks, absolutely prohibits acts of forcing insurance purchases when borrowing capital. Strengthen sanctions against banks and insurance companies when violating the consulting principle", the delegate expressed his opinion.
The delegate suggested that there should be specific conditions, that is, insurance cross-subsidy agents must register and clearly publicize which business they are agents for? Of which type? To avoid conflicts of interest, consumers must be transparent when the agency advises on products of other companies in other types.
Management agencies need to clearly stipulate that the sale of cross-subsidy insurance is not subject to binding conditions. For example, buying compulsory life insurance must be accompanied by motor vehicle insurance and vice versa.
Enterprises must take joint responsibility if the dealer takes advantage of cross-selling to provide wrong advice, causing damage to customers and have a mechanism to check and inspect the quality of cross-selling agents.
Delegate Nguyen Huu Thong (Lam Dong Delegation) said that the draft law supplements the direction of allowing individuals who are insurance agents of life insurance companies to simultaneously be distributors of health insurance products, non-life insurance of other insurance companies and vice versa.
According to the delegate, the expansion of the cross-selling mechanism of products in the context of the current monitoring system of insurance agency activities still has many shortcomings, this regulation has potential risks and conflicts of interest.
Recent practice shows that many people have reported being consulted on being distorted and forced to buy insurance through banking and agents.
If we expand cross-subsidy without strengthening legal measures and control mechanisms, it will be very difficult to overcome this situation, said the delegate.
Therefore, the delegate suggested that if the drafting agency still chooses the option of allowing cross-selling, the draft law should have a more strict mechanism for binding. As clearly regulated the number of enterprises that an individual agent is allowed to represent.
