Recently, the Ministry of Finance has made a number of proposals in the Draft Decree amending regulations on handling administrative violations in the insurance sector. In particular, it increases the fine level for a number of acts related to the provision of insurance products and insurance sales operations and activities.
Notably, the Ministry of Finance proposed that insurance companies could be fined VND80-100 million if they provide incorrect information on rules, conditions, terms, and documents summarizing, illustrating benefits, and introducing products to customers.
Illegal insurance consulting can be fined up to 100 million VND (Photo TL)
This is also the penalty applied to violations of investment-linked insurance products, health insurance, and retirement insurance to create a clean and healthy insurance business environment.
In fact, under the old regulations, the act of providing unclear and inaccurate product introduction documents and illustrations was only subject to a warning. Acts such as not providing sufficient information or not informing customers of contract status were also only subject to a fine of 40-50 million VND.
In addition to proposed changes in penalties for insurance businesses, regulations on insurance brokerage activities have also been tightened.
Brokerage businesses can be fined from 20-40 million VND if they promise to provide illegal benefits to incite customers to sign contracts, cancel existing contracts to buy new contracts. Advising customers to buy insurance with less competitive terms to gain higher brokerage commissions or providing false information will be fined from 40-60 million VND.
A common violation is using unqualified direct brokers as prescribed, and the proposed fine for brokerage businesses is increased to VND50-70 million. Insurance agents can be fined VND30-50 million for these acts.
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