Overview of life insurance and recommendations for life insurance activities case of life insurance contract dispute no 19 2020 ds pt

SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS  RISK MANAGEMENT AND INSURANCE REPORT OVERVIEW OF LIFE INSURANCE AND RECOMMENDATIONS FOR LIFE INSURANCE ACTIVITIES CASE OF LIFE INSURANCE CONTRACT DIS.INTRODUCTION 1 1. Definition 1 2. Characteristics 1 3. Classification 1 4. Overview 2 5. Some current lawsuit on Life Insurance Dispute in Vietnam 2 CHAPTER 1: OVERVIEW OF BAO VIET INSURANCE 3 1. Overview of Bao Viet Holdings 3 2. Some outstanding lawsuits of Bao Viet 3 3. Bao Viet Life 4 4. Shortterm and longterm goals 5 5. Achievements of Bao Viet Life 5 CHAPTER 2: ANALYSIS OF THE INSURANCE CONTRACT DISPUTE NO. 192020DSPT (2) 6 1. Subjects of the case 6 2. Key point issues 7 3. Legal basis 8 CHAPTER 3: LESSONS AND RECOMMENDATIONS FOR THE INSURERS AND THE INSURED 16 1. Lessons 16 2. Recommendations 18 REFERENCES 20

TABLE OF CONTENTS

INTRODUCTION 1

1 Definition 1

2 Characteristics 1

3 Classification 1

4 Overview 2

5 Some current lawsuit on Life Insurance Dispute in Vietnam 2

CHAPTER 1: OVERVIEW OF BAO VIET INSURANCE 3

1 Overview of Bao Viet Holdings 3

2 Some outstanding lawsuits of Bao Viet 3

3 Bao Viet Life 4

4 Short-term and long-term goals 5

5 Achievements of Bao Viet Life 5

CHAPTER 2: ANALYSIS OF THE INSURANCE CONTRACT DISPUTE NO 19/2020/DS-PT (2) 6

1 Subjects of the case 6

2 Key point issues 7

3 Legal basis 8

CHAPTER 3: LESSONS AND RECOMMENDATIONS FOR THE INSURERS AND THE INSURED 16

1 Lessons 16

2 Recommendations 18

REFERENCES 20

1 Definition

Life insurance is an insurance product that provides financial protection when theinsured encounters risks related to health, body and life (2020) It is a contract between aperson and an insurance business, in which the insurance company guarantees financialsecurity to the policyholder in return for regular payments (known as premiums)

In order to preserve the contract's legality and guarantee the participant's insurancebenefits, the participant must pay a one-time or recurring premium (monthly, quarterly, oryearly) after signing the contract The insurance provider will process the benefits andfulfil its commitment to the beneficiary by paying the insured amount upon theoccurrence of an insured event or the contract's expiration

2 Characteristics

Life insurance is a type of insurance that covers the life or death of the insured.Consequently, life insurance contains the following fundamental qualities (Vietnam LegalSystem - Editorial Board, 2020):

First, it is impossible to predict life expectancy, human life, or health.

Second, there is a partial risk component to the insured occurrence.

An objective occurrence is considered to be insurable if the parties have agreed to it

or if it is required by law, in which case the insurer is required to reimburse the insured orpay the beneficiaries of the insurance premiums

Third, only life insurance companies are offered The most fundamental

characteristic that distinguishes life insurance from other types of insurance is that it ispersonal insurance For instance, you have to pay a premium to participate in insurance ifyou have life and health insurance If you experience an accident within the insurance period,like an accident, the insurance party will pay the costs associated with taking this risk

Fourth, this form of long-term contract is frequently affordable.

3 Classification

There are numerous types of life insurance nowadays over the world and in Vietnam

According to Insurance Business Law (2022), basic ones can be named as:

- Term life insurance: for the death of the insured within a certain period

- Whole life insurance: covers the death of the insured at any time during his or her

life

- Annuity Insurance: an insurance business in case the insured lives up to a certain

term After that time limit, the insurance enterprise must make periodic insurance

regarded as the most common in the Vietnamese market and is the kind of

insurance in our researched case

- Mixed insurance: combines term life insurance and term insurance

- Investment-linked insurance: does not divide profits, premiums and insurance

benefits into two parts, namely the insurance part and the investment part

- Retirement insurance: in case the insured reaches the specified age.

4 Overview

After more than 20 years of establishment and development, the life insurancemarket in Vietnam now has 18 businesses, providing more than 500 life insuranceproducts, with more than 11.6 million effective insurance policies resources, creatingjobs for nearly 900,000 agents, the amount of insurance paid in 2020 is more than 25,000billion VND (Nguyen, 2021) Life insurance is becoming more and more familiar to alarge part of people

Vietnam's insurance market is regarded as promising, owing to low penetration ratesand average prices In addition, the number of life insurance policyholders is only about

10 million, equivalent to about 10% of the population The Ministry of Financeanticipates that this ratio will rise to 15% by 2025 (Nguyen, 2021)

Although there have been long development steps, it can be seen that theVietnamese life insurance market is also facing a number of challenges for its sustainabledevelopment (VietnamCredit Editorial Board, 2022) Among them, it can be mentionedthat the legal environment regulating insurance business has not kept pace with thedevelopment of the industry, leading to many lawsuits, indirectly affecting the growth rate

of the market

According to some authorities, the provisions of the Law on Insurance Business arestill insufficient, posing hazards to insurance participants and insurance enterprises In theinsurance relationship, the buyer is at an inferior position (Hồ, 2022) If a contract hasvaried terms, it must be interpreted in accordance with the rules on contract interpretationsuch that the insurance buyer is benefited However, the contract is always lengthy,sometimes confusing, and behind that is a group of skilled consultants that operate underthe mindset that maximising sales is more important than focusing on the interests of theclient The back appendix contains terms regarding exclusion of liability of insurancebusinesses, many of which are difficult to understand Buyers frequently struggle to fullycomprehend it as a result The insurance contract is a sample agreement that the customercannot alter; only the duration and the amount of insurance are modifiable In addition,with high litigation costs and complicated processes, buyers often avoid litigation whendisputes occur and insurance sellers often benefit from such disputes

5 Some current lawsuit on Life Insurance Dispute in Vietnam

Most common subjects of Life Insurance disputes are about the coverage of life

insurance and the validity of the contract Contributing factors are often the lack orfalseness in health information reports as the person directly filling out the information inthe policy is not the insured one but the insurance salesperson The cases listed above aresharing the same issue as mentioned:

- Nam Dinh Province Judgement 01/2021/DS-PT date 12/01/2021 oninsurance contract disputes The Defendiff: AIA Life Insurance CompanyLimited (Vietnam) (2022)

- Binh Thuan Province Judgement 240/2021/DS-PT date 16/03/2021 oninsurance contract disputes The Defendiff: AIA Life Insurance CompanyLimited (Vietnam) (2022)

- Quang Tri Province Judgement 19/2020/DS-PT date 12/11/2020 oninsurance contract disputes The Defendiff: Bao Viet Insurance Company(2022)

CHAPTER 1: OVERVIEW OF BAO VIET INSURANCE

1 Overview of Bao Viet Holdings

Bao Viet (also Bao Viet Holdings) is the largest Vietnamese insurance firm andVietnam's seventh largest listed corporation by market value Bao Viet has expanded intostock market trading, fund management, and real estate in addition to numerous insuranceproducts The Vietnamese government formed Bao Viet on December 17, 1964, and itbegan operations on January 15, 1965 Bao Viet is a state-owned corporation withinternational investment With its national headquarters in Hanoi, Bao Viet has more than

200 branches and member businesses spread over 63 provinces and towns

Bao Viet Insurance is the oldest insurance company in Vietnam, having beenestablished and growing for more than 50 years It dominates the market in terms ofmarket share, original premiums, and charter capital Additionally, Bao Viet consistentlystrives to fulfill the roles and obligations of the insurer in assisting and resolving clientclaims as well as social security work; guarantee sustainable development; andenhance community quality of life

Bao Viet is the parent company, while its 100% owned subsidiaries are:

- Bao Viet Insurance Ltd.

- Bao Viet Life

- Bao Viet Fund

- Bao Viet Investment

2 Some outstanding lawsuits of Bao Viet

2.1 Carinsurance contract dispute

At the Bao Viet Company's Can Tho branch, Mr S purchased an insurance policy

for

all of his cars at the end of 2018 with an insured value of 600 million VND The driver of

Mr S was involved in an accident in Dong Thap not long after that Following that, Mr

S reported the event to Bao Viet and simultaneously requested that a special vehicle tow

it to the Toyota Can Tho Service Center Following inspection, Toyota Can Tho estimatedthat the car had sustained damage worth more than 310 million VND Bao Viet, however,refused to accept this figure and instead only agreed to pay out more than 100 millionVND Frustrated, Mr S filed a lawsuit against Bao Viet in Ninh Kieu District's People'sCourt, seeking damages calculated in accordance with Toyota Can Tho's damageestimate At the end of the trial, the People's Court of Can Tho City announced thedecision to uphold the first-instance judgment, forcing the defendant Bao Viet to pay theplaintiff an amount of more than 307 million VND (Nguyễn, 2021)

2.2 Car insurance fraud

In this case, only two days after purchasing insurance for a motor vehicle from BaoViet, the insurance buyer in this instance, Mr Dinh Cong Hien, claimed an accident thathappened on July 1, 2012 as a result of crashing into the wall of the operator of Nam DatCompany During the claim settlement process, the insurer noticed signs of profiteeringfrom the untruthful declaration of the customer According to the investigation findings ofthe inspection agency under the Ministry of Public Security and the Criminal TechnicalExamination Division, a collision with the operator of Nam Dat Company's front wall, as

he claimed, cannot have caused the traces of deformation, etching, and metal scratches onthe right side of Mr Dinh Cong Hien's engine cover As a result, Baoviet feels it is notobligated to make amends when clients make dishonest claims The first-instance ruling,however, determined that both Bao Viet and Mr Dinh Cong Hien were at fault.Particularly, Mr Dinh Cong Hien's fault is that he can't explain why the marks on the carand the marks on the wall of the Nam Dat company operator are not the same, while BaoViet was unable to produce evidence to show that the accident scene occurred somewhereelse In the conclusion, the trial panel ordered Mr Dinh Cong Hien to forfeit 30% of thedamages and Bao Viet to pay 70% of the insurance policy value (Hoàng, 2013) This is avery typical instance of an insurance fraud issue

3 Bao Viet Life

Regarding the history backgound, Bao Viet introduced the first life insurance products

to the market in August 1996, ushering in a new phase in life insurance growth inVietnam (Bảo Việt Life Editorial Board) This is when Bao Viet Life was established In

1996, Bao Viet Life became a pioneer in the life insurance industry and is now a memberfirm of the Bao Viet Group with 100% of its capital under the Ministry of Finance As apioneer, Bao Viet Life is aware of the demands of the Vietnamese people and isdeveloping a superior solution to safeguard everyone's financial and physical well-being.Bao Viet Life uses the

demands of love, health, and finances as the inspiration for the introduction of world-classproducts that are in line with Vietnamese culture.

As of 2019, Bao Viet Life is the sole life insurance provider with a national

distribution network that consists of 76 member firms, 323 regional offices, 240,000investors, consultants, and 2,100 officers With the most reliable network of affiliatecompanies in the industry, Bao Viet Life has been able to give consumers the greatestguidance and service possible thanks to its reputation for excellence

4 Short-term and long-term goals

Expand network, develop multi-channel distribution system

Recruiting new consultants with large quantities, strong quality and innovativetraining programs to meet the needs of bringing insurance products to all customersnationwide Cooperation with leading banks and financial institutions has also continued

to be promoted

New product development

Bao Viet Life will continue to release new products in 2016, including productsfrom the voluntary retirement lines and traditional product categories, to the market based

on promoting market research, designing and developing diversified product packages,meeting market needs and customer segments, being highly competitive and in line withstrategic directions, and concurrently suiting with those strategic directions of theGovernment and Ministry of Finance in reforming the social security system

Effective investment strategy

Bao Viet Life will employ a flexible investment strategy to successfully capitalize

on investment possibilities when changes occur in the Vietnamese financial sector byaggressively reinvesting in the economy and entering the government bond market inorder to provide the most benefits to consumers

Improve the quality of customer service

Continue to improve customer service by broadening the sorts of help offered andutilizing information technology to its fullest potential in order to rapidly address clients'consulting needs and boost customer satisfaction

5 Achievements of Bao Viet Life

The tremendous accomplishments that Bao Viet Life Corporation has made since itsinception and growth are a source of pride for both the country and this particular insurer.These accomplishments include:

- In 2015, Bao Viet Life was honored to receive the Vietnam Trust & Use Award

for its life product An Phat Lifetime Also in this year, Bao Viet Life continued

to be voted by Global Banking & Finance Review as Vietnam's best life

insurance company in 2015.

- In 2016, Bao Viet Life was honored to receive the top position in the TOP 5

The most prestigious life insurance enterprises in Vietnam 2016.

- In 2017, Bao Viet Life was honored to receive the awards Best Life Insurance

Company in Vietnam" and "Life Insurance Company for Public Health.

- In 2018, Bao Viet Life was named Vietnamese enterprise meeting

international standards.

- 2019 continues to be a successful year for Bao Viet Life when this unit has

received the award: Vietnam's most prestigious life insurance company 2019 and Vietnam's best social responsibility and community development life

insurance enterprise 2019.

CHAPTER 2: ANALYSIS OF THE INSURANCE

CONTRACT DISPUTE NO 19/2020/DS-PT (2)

1 Subjects of the case

1.1 The Plaintiff

The Plaintiff in this case is Ms Truong Nguyen Tu Tr (hereinafter referred as Ms.

B), the life insurance beneficiary of Mrs Nguyen Thi Thuy Tr (hereinafter referred asMrs A)

Ms B is Mrs A’s daughter

Legal representative of the plaintiff: Mr Gian Thanh A is the authorized

representative according to the authorization letter

Also, Lawyer Tran Duc A is in charge of the plaintiff's legitimate rights and interests

- On December 21, 2015, Mrs A signed a life insurance contract No

568701090 with Bao Viet Life Insurance Corporation which is valid untilDecember 14, 2035 However, in the process of implementing insurance, onNovember 2, 2018, Mrs A died After Mrs A's death, Ms B made a dossierand sent it to the Bao Viet Life Insurance Corporation to request thesettlement of insurance benefits as agreed in the contract

- In response to Ms B's request, Bao Viet issued a statement that due to a mistakeduring the application process, Bao Viet decided to terminate the contract No

568701090, refuse to compensate and did not refund the insurance premium

- The refusal of Bao Viet Life Insurance Corporation to pay the insurancepremium paid has caused damage to the legitimate rights and interests of Ms

B Therefore, Ms B sued, asking the Court to force Bao Viet Life Insurance Corporation to compensate the full value of the insurance contract.

1.2 The defendant

The defendant of the case is Bao Viet Life Insurance Corporation.

Legal representatives of the defendant:

Mr Ha Hoc Kh – Deputy Head of Legal and Compliance Department

Mr Tran Phi H - Legal Officer of Bao Viet Insurance Corporation

Lawyer Tran Thi Hoang M is in charge of the defendant's legitimate rights andinterests

Bao Viet Life Insurance Corporation is the insurer in this case Bao Viet isresponsible for providing financial coverage to their customers in the form of sum assured

in case of occurrence of the event (stated in the policy)

The representative of the company said that at the time of participating in theinsurance, Mrs A made an insurance claim No UVL/2015-0433583 and paid theestimated premium to participate in the insurance

Bao Viet claimed that the insurance buyer had violated the obligation to provideinformation, intentionally providing false information in order to receive insurancepayment or compensation

- At the request of Ms A, Ms C filled out the information in the InsuranceClaim Form for her customer

Witness: Ms Nguyen Thi H (hereinafter referred as Ms D)

- Ms H is the person who is authorized to receive all documents related to theinsurance contract from the consultant

2 Key point issues

Legal problems that should be addressed are listed below:

- Although the insurance contract was signed by Ms C, Mrs A was alsodishonest in the process of declaring information when she had read andconfirmed that she did not have cancer, any serious diseases or medicaltreatment in the health section The question that must be brought out is that

whether Ms B has the right to claim 300.000.000 VND from Bao Viet whenMrs A violates the obligation to provide information.

- In spite of the fact that Mrs A asked Ms C to fill out the information on theInsurance Claim Form, the problem arises whether the insurance consultantdeclaring information on behalf of the insured breached the InsuranceBusiness Law and the insurer's policy (An Phat Gia Hung)

First, Mrs A could not fully declare information about having discovered and being

treated for cancer because according to regulations, Bao Viet Life Insurance Corporationwould refuse to accept insurance

Even if Mrs A did not intentionally confirm “No” in the health declaration, she had

read and signed the Insurance Claim Form and then did not have any other opinion duringthe process of requesting, accepting participation and paying insurance premiums underthe contract This proves that Bao Viet has the right to terminate the contract and refuse

Ms B's request for insurance benefits

However, Bao Viet Life Insurance includes a provision prohibiting the consultant

from declaring on behalf of the insurance buyer As a result, it is not objective for thedefendant to have stated explicitly what the consultants' obligations were

According to Law on Insurance Business, there is no breach in the declaration made

by the consultant on behalf of the insurance buyer However, it was hard to tell if theconsultant personally delivered and received the insurance contract from the customerbecause the contract delivery form was not signed by both the insurance buyer and theconsultant According to Ms D, she obtained the insurance agreement from Ms C andgave it back to Mrs A two years later This is a Bao Viet rule, yet the consultantdisregarded it, harming the insured's interests

Because of aforementioned statements, the dispute between the insurancebeneficiary and the insurance agency has become increasingly tense because of manycontradictory circumstances surrounding the controversial insurance contract Bothplaintiffs and defendants have their own opinions and proofs to protect their rights andarguments

3 Legal basis

3.1 Litigation process

3.1.1 Trial court

o Plaintiff's claim: Ms Truong Nguyen Tu B

According to the petition dated September 17, 2019 and during the settlement of thecase, plaintiff Ms Truong Nguyen Tu Tr (Ms B) presented her thesis as follows:

(1) Ms Nguyen Thi Thuy Tr (Ms A) was not guided by Bao Viet consultant onrelevant contents before signing the contract, especially not explained about

insurance exclusions.

(2) Ms Tran Thi H (Ms C) - insurance consultant voluntarily declared all on theinsurance claim form, all "no" answers were marked herself, then asked Ms.Nguyen Thi H (Ms D) let Ms A to sign => The writing on the insurance claimform was not Ms A's handwriting

(3) The incorrect declaration is not the insurance buyer's fault, but the insuranceconsultant’s fault who did not advise the insurance buyer and declare theinformation herself Therefore, Ms C's behavior is a violation of the obligation

to provide information for the insurance buyer

(4) Depending on the regulations and agreements on insurance exclusions and payment of insurance under Clause 1, Article 39 of the Law on InsuranceBusiness, Ms A's case did not belong to any cases of insurance exclusions andnon-payment of insurance premiums

non-To sum up, Ms B filed a lawsuit to force Bao Viet Life Insurance Corporation to

compensate Ms Truong Nguyen Tu B an amount of 300,000,000 VND

o Defendant's claim: Bao Viet Life Insurance Corporation

On October 22, 2018, Bao Viet Life Insurance Corporation received a dossier torequest settlement of insurance benefits for the risk of death of Ms A, however Bao Vietrefused to compensate for the following reasons:

(1) From May 26, 2015, until June 14, 2015, Ms A had undergone treatment for

"Breast cancer (P) metastases to liver, spleen, armpit, and lung," before entering

in the insurance

(2) In the Insurance Claim Form No UVL/2015-0433583 dated December 15,

2015, Ms A answered "no" to the question: “Tumor (benign or malignant)cancer” and the question: “In the past year, have you had any medicalexaminations and/or tests

(3) At the time of participating in insurance, if Ms A fully had declared informationabout the treatment of her disease, Bao Viet Life Insurance would have refused

to accept insurance

(4) In actuality, Ms A, the insurance purchaser, personally signed the InsuranceClaim Form, meaning that she understood and agreed to be responsible for theaccuracy and veracity of all the information included therein

(5) Additionally, the insurance buyer did not obtain a second opinion throughout therequest, acceptance, entry, and payment of the insurance premiums required underthe contract

(6) The insurer has the right to unilaterally suspend the insurance contract andcollect premiums up until the point at which the insurance contract's