Failure to clearly explain insurance benefits to the buyer will result in a fine of up to 100 million VND.

The Government has just issued Decree No. 174/2024/ND-CP regulating administrative sanctions for violations in the field of insurance business.

Accordingly, it is clearly stipulated that for each administrative violation in the field of insurance business, the organization or individual subject to the main form of punishment is a fine.

The fine for an organization is twice the fine for an individual for the same violation. The maximum fine for an individual committing an administrative violation in the insurance business field is 100 million VND, and for an organization is 200 million VND.

In addition, there is an additional penalty of temporary suspension of operations.

The Decree also stipulates acts that are subject to fines, such as: colluding with insurance beneficiaries to settle insurance claims and pay insurance money illegally; acts of forging documents and intentionally falsifying information to refuse compensation and pay insurance money when an insurance event has occurred; acts of forging documents and intentionally falsifying information in compensation and insurance payment claim files; acts of self-inflicted damage to one's own property and health to enjoy insurance benefits, except in cases where the law provides otherwise and is not yet subject to criminal prosecution.

The specific levels are:

A fine of 20 million to 40 million VND for one of the following violations where the amount of money appropriated is less than 10 million VND or the damage is less than 20 million VND;

A fine of 40 million to 60 million VND for one of the following violations in which the amount of money appropriated is from 10 million to less than 15 million VND or causing damage from 20 million to less than 30 million VND;

A fine of 80 million to 100 million VND shall be imposed for one of the following violations in which the amount of money appropriated is from 15 million to less than 20 million VND or the damage is from 30 million to less than 50 million VND.

The Decree also stipulates a fine of VND 160 million to VND 200 million for one of the violations of fraud in insurance business by a commercial legal entity committing one of the acts specified in Clause 1, Article 213 of the 2015 Penal Code (amended and supplemented in 2017) with the amount of money appropriated being less than VND 200 million or causing damage of less than VND 400 million or not yet to the extent of criminal prosecution. In addition, the violator is required to return the amount of money appropriated.

The penalty for violating regulations on providing insurance products is also clearly stipulated. Accordingly, failure to clearly and fully explain to the insurance buyer about insurance benefits and exclusion clauses of insurance liability will be fined up to 100 million VND.

Advertising life insurance products not in accordance with the law will be fined 80-100 million VND.

The Decree takes effect from February 15, 2025.