IMSA under the Ministry of Finance has released an inspection report on VNI’s operations in 2023. The report highlighted multiple violations in VNI’s insurance business, such as non-compliance with regulations on mandatory civil liability insurance for motor vehicle owners regarding report templates, handling accident reports via hotlines, and insurance certificate validity periods.

VNI reported that in 2023, its revenue from mandatory civil liability insurance premiums for motor vehicle owners totaled over VND625 billion. Of this, motorcycle insurance premiums were VND110 billion, while car insurance premiums were VND514 billion.

VNI’s 2023 report also stated that the company processed 2,017 mandatory insurance claims, with total payouts of VND108.5 billion. However, only 66 claims related to motorcycles, with a mere VND4.4 billion paid out, while the remaining VND104.1 billion went to car claims.

This means that the payouts for mandatory motorcycle insurance only accounted for roughly 4 percent of the revenue collected from this insurance type.

Notably, the time the company needed to handle claims and advance payments for motor vehicle owners was significantly slower than requested.

Of the 2,017 processed claims, over 1,760 were settled within 15 days, while 257 took longer, with 94 claims processed after more than 30 days.

The inspection revealed that, when sampling five claims from VNI’s report, settlement times were extremely delayed. Some claims took over 300 days to resolve, with cases stretching to 544 or even 607 days, despite regulations stipulating 15 to 30 days.

When taking five sample dossiers as reported by VNI, inspectors found that the compensation payment was very slow. Some files took more than 300 days to resolve, while in some cases, the time needed was 544-607 days, while the prescribed time limit is 15-30 days.

For advance payments related to health or life insurance claims, regulations require settlement within three days. However, the inspection found VNI processed some advance payments as late as 367 days.

Entitlement VND100 million, compensated VND30 million

According to VNI’s report, in 2023, the company settled 949 mandatory civil liability insurance claims related to third-party health or life, with total payouts of VND83.2 billion.

Of these, 574 claims involved fatalities (totaling VND65.05 billion), and 375 claims covered emergency treatment or injuries (totaling VND18.15 billion).

Among the 949 claims, VNI made advance payments for only 10 cases, which meant that 939 did not get advance compensation.

A sampling survey on 10 dossiers showed that the time from the date of receiving notification from the insurance buyer and the insured about the accident to the date that VNI made advance compensation exceeded 3 days, which did not comply with the provisions stipulated in Decree No 03/2021/ND-CP.

Additionally, VNI’s payouts for mandatory civil liability insurance for motor vehicle owners were neither complete nor accurate per legal regulations.

For instance, for claim BT652100021.BT related to a fatality, VNI compensated the customer only VND30 million. This amount did not align with legal regulations on fatality compensation (VND150 million) or the agreed amount between the vehicle owner and the affected party (VND110 million), thus violating regulations.

Discovering many violations, the inspection team recommended that the IMSA review administrative violations to proceed with penalties in the insurance business sector.

Inspectors have also urged VNI to review and ensure strict compliance with regulations on claim settlement timelines and advance payments, collect mandatory civil liability insurance claim documents properly, record hotline calls as required, and reassess cases with incorrect compensation.

The latest statistics from IMSA on mandatory civil liability insurance for motorcycles showed that in the first 11 months of 2024, the claim payout ratio was only 4 percent of total revenue.

The total revenue reached VND736.9 billion, with estimated claim payouts of VND28.5 billion.

Previous Ministry of Finance data indicated that in the first six months of 2024, motorcycle liability insurance premiums generated VND431.78 billion, with payouts of VND41.9 billion and claim reserves of VND35.86 billion. These figures excluded expenses for commissions, management and sales.

With premiums of VND55,000 or VND60,000, if an accident causes harm to a third party’s health or life, the insurance will cover up to VND150 million per person per incident. For property damage, coverage is up to VND50 million per incident.

Binh Minh