Illegal insurance consulting can be fined up to 100 million VND

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 fines 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 summary documents, benefit illustrations, and product introductions to customers.

The Ministry of Finance proposed increasing the fine to 100 million VND if insurance consultants violate regulations, picture 1 — 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 get higher brokerage commissions or providing false information will be fined from 40-60 million VND.

A common violation is using unqualified direct brokers as regulated, and the proposed fine for brokerage businesses is increased to 50-70 million VND. Insurance agents can be fined 30-50 million VND for these acts.

Source