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Wednesday, June 19, 2024

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Solutions for life Insurance market

The State Bank of Vietnam (SBV) is drafting a ministerial circular which may greatly impact the life insurance market. The draft circular specifies that commercial banks are disallowed to act as sales agencies of investment-linked insurance products, as these products can cause confusion with some banking products. The bancassurance crisis In 2023, the life insurance industry fell into crisis. Hardly could anyone imagine that life insurance revenue would plunge as much as 50%. Bancassurance as a prime distribution channel of many insurers as well as the percentage of investment-linked products took a sudden nosedive. According to figures from the Vietnam Insurance Association, the decline in revenue and the number of new life insurance policies for investment-linked products drove down total revenue and the number of effective policies by 10% over the previous year. The crisis deepened when five life insurance businesses were inspected by authorities. According to a recent announcement by the Ministry of Finance, those five insurers committed violations as they let their staff provide ineligible investment-linked insurance products and their compliance with accounting regulations regarding corporate income tax was problematic. The consequence of massive development and lax management of bancassurance was a high rate of insurance contract cancellation […]
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