The proposal was made by Ha Sy Huan, Deputy Head of the Delegation for Thai Nguyen province, during a plenary session on the morning of 18/11. The session discussed the draft law amending and supplementing certain articles of the Law on Insurance Business.

According to Huan, bancassurance, or bank-sold insurance, is considered an essential distribution channel following international trends. It helps expand insurance coverage and leverages banks' customer data. "However, in practice, many shortcomings have emerged, especially the situation of forcing insurance purchases when borrowing capital," he stated.

Similarly, Nguyen Huu Thong, Deputy Head of the Delegation for Lam Dong province, reported that many citizens have complained about receiving misleading advice and being forced to buy insurance through bank channels or agents. "If we expand cross-selling without increasing legal requirements and control mechanisms, it will be very difficult to overcome this situation," he noted.

Ha Sy Huan, Deputy Head of the Delegation for Thai Nguyen province, spoke at the discussion session on the morning of 18/11. *Photo: National Assembly Media*

Faced with this reality, Ha Sy Huan believes the draft law needs clear regulations on transparency between insurance consulting activities and bank capital mobilization. He proposed "absolutely prohibiting acts of forcing insurance purchases when borrowing capital" and increasing strict penalties for violating banks. According to him, this aims to protect the legitimate rights of insurance participants, as well as the transparency and health of the market.

In a subsequent explanation, Minister of Finance Nguyen Van Thang acknowledged the phenomenon of bank employees selling insurance, causing confusion between bank products and insurance company products.

According to the Minister, the amended Law on Credit Institutions already prohibits banks and their employees from selling non-compulsory insurance products when providing services. The Law on Insurance Business also prohibits threats or coercion when selling insurance products. The consultation process by agents must be recorded to improve quality, according to guiding documents.

However, Thang stated that the Ministry of Finance will continue to inspect, handle violations, and submit regulations to competent authorities to curb this situation.

Minister of Finance Nguyen Van Thang explained at the session on 18/11. *Photo: National Assembly Media*

In practice, besides life insurance, many banks also often sell loan insurance, fire and explosion insurance, etc., with lower values when disbursing credit loans. These are non-compulsory insurance products offered by banks to ensure the safety of assets and loans. According to banks, purchasing loan insurance or fire and explosion insurance helps increase the likelihood of mortgage loan application approval and protects collateral.

The draft law also proposes allowing individuals who are agents for life insurance companies to distribute other types of insurance, such as health and non-life insurance. Concurrently, the product cross-selling mechanism could also be further expanded.

Regarding this issue, Nguyen Huu Thong assessed that an agent simultaneously representing multiple companies could be influenced by commissions and incentives. Consequently, they might no longer fully guarantee their obligations or prioritize the buyer's interests.

Therefore, he proposed that the draft law needs stricter binding mechanisms, such as clearly regulating the number of companies an individual agent is allowed to represent. He suggested, for example, that an agent should only work for a maximum of two companies: one life insurance and one non-life/health insurance.

Concerning insurance contracts, Le Xuan Than, Chairman of the Khanh Hoa Provincial Lawyers' Association, noted that companies often present extremely long and confusing contracts. Meanwhile, he pointed out that the current law only stipulates the basic content of insurance contracts and assigns the Ministry of Finance to provide guidance.

He believes the regulations on insurance contract content must be amended, tasking the Government with issuing specific guidance for each type and providing concise, easy-to-understand contract templates. This aims to protect the rights of insurance buyers.

The draft law amending and supplementing certain articles of the Law on Insurance Business is expected to be voted on and passed by the National Assembly on 11/12.

Anh Tu