Commercial banks can continue to sell investment-linked insurance products through the bancassurance channel.
Previously, under a draft circular released in late March this year by the central bank, State Bank of Vietnam (SBV), banks were prohibited from selling the products. However, the SBV removed the prohibition following feedback from experts and industry insiders, reported Vietnam News Agency.
Under the latest regulations issued on 30 June, commercial banks and foreign bank branches in Vietnam are allowed to act as insurance agents for various types of insurance products as stipulated by the Law on Insurance Business.
For institutional agents, commercial banks must meet several conditions to operate as agents, such as establishing a dedicated department to conduct insurance agency activities, and the head of the department must have at least three years of experience in finance, banking, or insurance and hold a university degree or higher in insurance.
The Ministry of Finance recently also issued specific requirements for investment-linked insurance products. Since 1 July, insurers must provide illustrative charts on their websites so that customers can independently check and understand these products. There are also stringent requirements for recording and filming each sale process.
Mr Dau Anh Tuan, deputy general secretary and head of the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), said it would have been necessary to carefully consider the impact if banks were banned from selling investment-linked insurance products through the bancassurance channel as this was still a relatively popular model according to international rules.
Echoing Mr Tuan, Tran Nguyen Dan, a lecturer specialising in insurance and financial risk management at the University of Economics Ho Chi Minh City, said that a ban on banks selling insurance could not be necessary. Banks’ staff could provide accurate and responsible guidance to customers. Government agencies should focus on inspection and supervision.