Life insurers Prudential, MB Ageas, Sun Life, and BIDV Metlife have been found guilty of bancassurance violations and will have to pay administrative fines to fix their wrongdoings, the Ministry of Finance said on Friday.
The ministry said that sales of insurance policies via banks had many irregularities, especially involving banking staff. Major mistakes included misleading information, and not strictly following the ministry’s insurance premium guidelines.
The finance ministry has imposed administrative fines as a warning to businesses and to ensure a safe market, and asked the four insurers to enhance their management of bancassurance activities.
Insurance businesses have been instructed to develop monitoring processes related to law compliance, proactively detect and handle violations, and minimize impacts on customers. They have also been asked to improve training and monitoring, control relevant fees in line with the law, and boost risk management.
Regarding the scandal at Canada-backed Manulife’s bancassurance services via Saigon Commercial Bank (SCB), the Ministry of Public Security said it had received 6,060 complaints as of May. At the public security ministry’s press conference on Friday, Major General Nguyen Van Thanh, vice chief of the police for smuggling, economic, and corruption crimes, said the force is investigating the case.
Regarding accusations that claim deposit contracts were switched to insurance policies, Thanh said the documents had been signed by customers, so the investigation will focus on if bankers tricked them into doing so.
Manulife has refunded VND800 billion ($33.9 million) for 3,553 contracts and is processing the remaining 2,507, he added.
Vietnam’s insurance market recorded total premiums of VND117 trillion ($4.96 billion) in the first six months of this year, down 1.62% year-on-year, according to the General Statistics Office. The figure included VND81.4 trillion ($3.45 billion) for life insurance and VND35.6 trillion ($1.51 billion) for non-life insurance. The sector paid VND35.3 trillion ($1.5 billion) in indemnification, up 23.8%, and re-invested VND725.4 trillion ($30.76 billion) into the economy, up 15.4%.
This year, the Ministry of Finance plans to continue updating the legal framework for the insurance sector and inspect the bancassurance activities of ten insurers with connections to foreign bank branches in Vietnam.