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The Minister of Finance wants to keep the Fund to protect the Insured

The National Assembly verification body proposed to remove the Fund to protect the insured, but the Minister of Finance wanted to keep it and proposed reducing the current reduction to 6-10 times.

On the morning of March 22, the 9th Session of the National Assembly gave an opinion on the acceptance report and explanation of the revised Insurance Business Law.

One of the issues discussed is whether the Insured Protection Fund should be kept or not. The source for establishing this fund has been deducted as a percentage of the insurance premium paid by the purchaser under the contract. Specifically, the rate of reduction of funds is 0.3% of total revenue with contract retention fees. That is, for an insurance contract of 100 VND, the company must deduct 0.3 VND to contribute to the Fund. This amount is intended to protect policyholders when the insurance company goes bankrupt or goes bankrupt.

“After 12 years of deduction, these funds are not used and will likely not be used. Therefore, the above funds do not need to be maintained, thus burdening businesses and insurance participants,” said Mr. vu. Hong Thanh, Chairman said the Economic Committee.

Therefore, this agency proposes to stop the withholding and payment of the Insured Protection Fund; tasked the Ministry of Finance with detailing the management and use of fund balances, ensuring proper handling of balances for the original purpose for which these funds were created.

After explaining, Finance Minister Ho Duc Phuc advised keeping these funds as “it is impossible to guarantee 100% that the insurance company will not face difficulties, dissolve or face other unusual problems”.

Minister of Finance Ho Duc Phuc.  Photo: Hoang Phong

Minister of Finance Ho Duc Phuc. Photo: Hoang Phong

Citing the recent Covid-19 epidemic, the use of the Unemployment Insurance Fund has greatly supported workers, Phuc said that without a Fund to protect the insured, the State would not have the working tools to intervene when risks occur.

“Currently the fund has around 1,000 billion dong and has not spent any money since its establishment. These funds are created for the purpose of sharing with payers, buying insurance, not spending on other things. The maintenance of this fund is necessary,” he said.

According to the Minister of Finance, instead of handing over these funds, the cuts should be reduced to 6-10 times the current level to reduce the burden on the business world.

About insurance contracts, this revised draft law has added provisions regarding invalid insurance contracts under the 2015 Civil Code, insurable interests; the legal consequences of unilaterally terminating the insurance contract…

According to National Assembly Chairman Vuong Dinh Hue, insurance contract is an important content to ensure the harmonization of the interests of participants starting from the provision of services, contract making, insurance beneficiaries… He suggested that the drafting agency carefully review and ensure the specificity of the insurance business contract in protecting the legitimate rights and interests of participants, as well as sellers. The general principles of contracts have been detailed in the 2015 Civil Code, according to him, they do not need to be repeated in the revision of the Insurance Business Law.

Vu Hong Thanh said that the Standing Committee of the Economic Committee will work with the drafting agency to further review and finalize regulations on insurance contracts, such as provisions on the exclusion of insurance liability, entering contracts with insurance companies. insurance and health insurance if you die, it’s time to consider taking insurance…

About bonuses and commissions for insurance agents, Mr. Vu Hong Thanh said that during the comment process, some opinions suggested removing this content, to ensure the company’s autonomy, especially in increasing competition to attract agents among insurance companies, according to the law of the market economy.

However, the Standing Committee of the Economic Committee said that the draft law has drafted and determined the amount that can be received by insurance agents (life and non-life insurance agents) and this amount is specifically regulated in the insurance agent contract. This is for publicity and transparency to ensure the legitimate rights and interests of agents and insurance companies.

In order to avoid unfair competition between business actors to attract agents’ attention, the Minister of Finance will set a maximum spending limit for commissions, bonuses, agent support and other legitimate rights and interests. …

National Assembly Chairman Vuong Dinh Hue noted that the Law on Insurance Business needs to be approached in accordance with international practice, in line with international agreements and commitments, and to ensure publicity and transparency to create favorable market conditions.The school is developing.

“Life without insurance is like climbing stairs without handrails. Although the growth rate of this sector is very fast, it is still low compared to its potential and potential,” said the Chair of the National Assembly.

He also stressed that the country is pushing to accelerate the growth of high value-added services such as finance, banking, logistics and insurance.

According to the program, this bill will be discussed and voted on by the National Assembly at its 3rd session (May 2022). Previously, the National Assembly discussed and gave opinions on this project for the first time at its second session (October 2021).

Mr Minho

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