Insurance firms and agents face higher qualifications bars
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.
Vietnam has 64 insurance companies, including 30 non-life insurers, 18 life insurers, two reinsurance companies and 14 insurance brokerage companies
Agents, who consult and sell policies independently, mustpossess insurance-relevant university degrees and certificates, according toGovernment Decision 73.
Risk analysts must possess a university or higher degrees inrisk management majors or relevant certificates.
The decision also requires insurance actuaries, who analysefinancial risks, to possess a university or higher degrees.
Simultaneously, Government Decision 98 has been amended todeliver additional penalties to firms and agents who violate Vietnam’s Laws onInsurance Business.
Agents who fail to adhere to technical standards andresponsibilities such as providing policies without a signed contract or beforea contract was signed, face fines of up to 30 million VND (1,300 USD). Theirrespective firms face double said amount.
Agents who sell policies or support services they are notallowed or not qualified to provide could be fined up to 70 million VND (3,000USD) with their firms being fined double.
Those who break the law may also have their insurancelicenses revoked.
The Government decisions, which were drafted by the Ministryof Finance, were based on Law 42/2019/QH14 to govern and overlook insurancesupport services in Vietnam. The law has been approved by the National Assemblyin June.
Vietnam is considered by experts as a fast-growing marketthanks to rising income and robust GDP growth yet the country has one of theworld’s lowest insurance penetrations at just less than one percent of GDP.
The average premium was reported at 30 USD, significantly lowerthan the global average of 595 USD and Southeast Asia’s average of 74 USD,according to a report released in June by the Insurance Supervisory Authorityunder the Ministry of Finance, the country’s regulatory body for insuranceactivities.
The country has 64 insurance companies, including 30 non-lifeinsurers, 18 life insurers, two reinsurance companies and 14 insurancebrokerage companies. There are up to 850 non-life insurance products and 450life insurance products sold on the Vietnamese market.-VNS/VNA