Insurance companies and banks are looking for more guidance from the industry regulator on bancassurance operations following the issuance of new regulations.
Bancassurance sales have contracted sharply since the authorities cracked down on malpractices (such as mis-selling or forced insurance purchases) in the channel in 2023. Many insurance companies say they are trying to improve service quality and restructure to adapt to new regulations on insurance business and regain customer trust.
However, the way out remains unclear for many reasons, including difficult-to-understand regulations, reported the local media.
For instance, Clause 5, Article 15, of the Law on Credit Institutions 2024, effective since 1 July 2024, prohibits credit institutions, foreign bank branches, managers, operators, and employees from “attaching the sale of non-compulsory insurance products” to the provision of banking products and services. This is a completely new provision in the Law on Credit Institutions and there is currently no guiding document.
Some insurance companies say that there are currently many different views and understanding about what it means to "attach the sale of non-compulsory insurance products with the provision of banking products and services" in each locality and at each bank branch, so the implementation of the bancassurance channel faces many difficulties.
Mr Nguyen Hong Phong, general director of Agricultural Bank Insurance Joint Stock Company (ABIC), said that the insurance companies have consulted lawyers and legal experts, and discussed the meaning of the word ‘link’. He said, “The word affects the business activities of insurance companies quite a lot and we are waiting for the State Bank’s guidance documents on this.”