On 31 December 2019, the State Bank issued Circular No. 37/2019/TT-NHNN on guiding credit institutions and branches of foreign banks to act as insurance agents for insurance enterprises. (“Circular 37/2019“). Circular 37/2019 takes effect on 02 March 2020.
Accordingly, a credit institution as insurance agents may conduct the following activities:
- Client referral: the credit institution may refer a client who would like to purchase insurance to the insurance enterprise.
- Insurance offer: the credit institution may offer insurance and explain terms and conditions of insurance products to clients who would like to purchase insurance; or offer insurance via electronic or online methods or other methods in compliance with the law.
- Arranging conclusion of insurance policies: the credit institution may assist its clients in drawing up insurance policies, receive proposal forms and arrange conclusion of insurance policies as per the insurance agent agreement and regulations of the law on insurance business.
- Premium collection: the credit institution may collect premiums from clients on behalf of the insurance enterprise as agreed upon in the insurance agent agreement.
- Claim settlement upon occurrence: the credit institution may assist its clients with claim procedures, receive claim forms, transfer premiums received from clients to the insurance enterprise for appraisal, issuance of the compensation decision and claim payment. If authorized by the insurance enterprise, the credit institution may pay out claims directly.
- Other activities to execute the insurance agent agreement in compliance with the laws on insurance business and as authorized by the insurance enterprise.
In addition, Circular 37/2019 also regulates the operating principles of insurance agency of credit institutions, insurance agency contracts, the regime of reporting on insurance agency activities of credit institutions for enterprises, etc.
