Over the years, the insurance market has been active and developed strongly. According to information from the Ministry of Finance, by 2021, the total number of insurance agents has reached 1,119,871 people. Thus, within the past 2 years, this number has probably increased significantly. Not only that, the distribution channel of insurance products has also become more diversified. Banks, telecommunications service companies, supermarkets, etc. Also participate in distributing insurance products in the market.
The 2000 Law on Insurance Business seems to be “outdated” as in more than 2 decades, many new risks have appeared that the 2000 Law can no longer foresee.
Grasping that situation, the Insurance Business Law 2022 was born, bringing many new obligations for insurance business activities in general and insurance agents in particular.
1. Conditions for operating an insurance agency
The obligations of insurance agents were previously stipulated in Decree 73/2016/ND-CP, and have now been legalized in the Law on Insurance Business 2022. Regulations on conditions for operating insurance agents are supplemented and made more stringent as follows. :
For individuals who are agents:
– Be a Vietnamese citizen;
– Full capacity for civil acts;
– Have appropriate insurance certification.
For organizations that are agents:
– Organize legal activities in Vietnam;
– Registered insurance business line.
In addition, an individual agent is not allowed to act as an insurance agent for two businesses in the same type of insurance.
The draft Decree guiding Law 2022 is expected to add a number of stricter articles for insurance providers that are credit institutions. Accordingly, the organization must meet the following conditions:
– Establishment of a specialized department to implement insurance transactions;
– Must establish a separate counter to conduct insurance transactions;
– Must ensure at least 3 employees are trained. And must have an insurance policy certificate appropriate to the type of insurance to act as an agent.
2. Obligation to explain insurance benefits, rights and obligations of the buyer
A completely new obligation that Law 2022 stipulates for insurance agents is:
Furthermore, a full explanation of insurance benefits and exclusions of insurance liability is essential. Moreover, it is important to clarify the rights and obligations of the insurance buyer. Additionally, it should be noted that this provision is completely consistent with reality. However, it is worth mentioning that many customers complain that the contract terms provided by insurance companies are too confusing.
The draft circular guiding the implementation of Law 2022 is also expected to add regulations on the principle of providing information to customers. Accordingly, the insurance agent must explain to avoid confusion that insurance is a product of a credit institution. And it must be explained that insurance is not a mandatory condition of participation or a condition to enjoy preferential products of a credit institution.
3. Insurance business agents are only allowed to act as agents for trained products
Previously there were only 3 types of certificates:
– Life insurance agent;
– Non-life insurance agent;
– And unit-linked insurance agent.
Now, agent certificates under the new regulations include 6 types:
– Basic life insurance agent;
– Unit-linked insurance agent;
– Basic non-life insurance agent;
– Marine insurance agency;
– Aviation insurance agent;
– Health insurance agent.
Circular 69/2022/TT-BTC detailing the insurance products sold for each type of certificate. For marine and aviation insurance products, a corresponding certificate is required. Enterprises and insurance agents have a roadmap to convert the insurance agent certificates that were issued before January 1, 2023 to the end of December 31, 2025.
(Excerpt from Securities Investment Newspaper dated April 17, 2023)
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