Tighten regulations on insurance contracts

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The revised Law on Insurance Business is developed towards transparency of insurance contracts. Photo: Internet

On June 16, the National Assembly officially approved the revised Law on Insurance Business which will take effect from January 1, 2023. Many new regulations in the law are amended and revised in line with reality, including improving regulations related to insurance contracts, which have still shortcomings.

According to the Ministry of Finance, the revision of many regulations related to insurance contracts to meet the development of the insurance market and regulations of insurance contracts.

The regulations of insurance contracts play an important role in insurance business activities, ensuring the interests of insurers and insurance buyers.

The revised Law on Insurance Business has amended and supplemented regulations on cancellation of insurance contracts, invalid contracts, unilateral termination of contract performance, annulment of regulations on the statute of limitations for initiating lawsuits, the time of obligations arising under the contract to be consistent with the Civil Code and reality.

The revised law specifies types of insurance contracts, the insured entitles, interests for each type of insurance contract for person, property and damage insurance, and civil liability insurance; stipulates transparency in the provided information to enhance the fairness of other rights and obligations for both insurers and insurance buyers.

In order to respect the right of self-negotiation between the parties in entering into the insurance contract, the new law supplements the principles of entering and performing the contract, and the right of agreement between the parties to build the contract. Regarding dispute settlement, the Law has supplemented provisions on the form of dispute settlement through conciliation, arbitration or court.

To remove difficulties and obstacles, and meet practical requirements to minimize disputes, the Law is supplemented with regulations on responsibility for providing information and issues related to insurance payments, and provisions on group insurance contracts.

According to the Vietnam Insurance Association, the provisions on insurance contracts in the revised Law on Insurance Business are a key legal framework for the operation of insurance businesses. This is the core content that establishes the relationship between the insurance buyer and the insurance enterprise.

The insurance business is a specialized service in which a contract is signed under oral commitments and insurance benefits may be paid after a time which may be one year, several years or even never if the customer has not faced risks.

Therefore, if we only base on the general provisions of the insurance contract of the Civil Code to revise regulations, it will be ineffective, we need to include them in the Law on Insurance Business.

Regulations on insurance contracts in the Law on Insurance Business must be tightened to be consistent with international practices and govern the contract for the new insurance types, and in line with general regulations of the contract, ensuring transparency in the contract to minimize misunderstandings leading to disputes and lawsuits.