Vietnam’s New Guidelines On Bancassurance Agreements Between Banks And Insurers.

Scope of insurance agency operations by banks

 

Circular No. 37 inherits the previous provisions of Joint Circular No. 86 in terms of the scope of insurance agency operations by banks.

 

However, Circular No. 37 expressly recognizes the right of banks to offer insurance products via electronic platforms, online methods and any other methods under the law, in addition to traditional distribution channels/methods conducted via physical premises.

 

In regards to the collection of insurance premiums, banks may collect insurance premiums from customers on behalf of insurers. However, under Circular No. 37, banks are not permitted to use collected insurance premiums for any purposes other than those set out in the bancassurance agreement.

 

Customer data

 

In comparison to Joint Circular No. 86, Circular No. 37 expands the scope of information that banks must provide to insurers. Specifically, under Circular No. 37, banks are required to provide insurers with the following minimum details:

 

• For customer referrals and product offerings: name, age, gender, address, phone number and email address of individual customers; or name, address, phone number, email address and contact person of corporate customers;

• For arrangements for the execution of insurance policy contracts: information relating to the insurance buyers and insured as well as information necessary for insurers to assess whether to issue an insurance policy;

• For collection of insurance premiums: a schedule listing the number of customers whose premiums have been paid and collected as well as the total amount of collected premiums.

• For arrangements for settling claims and paying insurance proceeds in accordance with insurer authorizations: a schedule of payable insurance proceeds and requests as well as supporting documents for claims.

   

Other key issues in bancassurance deals

 

In addition to the above matters, Circular No. 37, together with other relevant regulations on insurance and retail banking, further impacts bancassurance deals in regards to the following:

 

• exclusivity rights;

• manpower support (training programs, insurance agent certificates for

  bank staff);

• insurers' access to the customer databases of banks (and the implications under data protection and privacy regulations); 

• compensation payable by insurers to banks e.g. commissions, and expenditures for management of insurance agents as well as other expenditures (and any tax rule implications);

• development of products;

• intellectual property issues related to joint ownership or co-banding;  promotional and marketing activities; and

• business structure and other regulatory issues.