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Insurers raise premiums to improve quality?   2008-11-27 - VTC

Explaining the action of 16 insurance companies signing the agreement on raising insurance premiums, the Vietnam Insurance Association said that the move aims to help improve the quality of insurance services.


16 insurers shaking hands to raise insurance premiums


Insurers have heavy costs to compensate for vehicles damaged earlier this month in the flood.

Three working sessions have been reportedly carried out between the representatives of the Competition Administration Department (CAD) under the Ministry of Industry and Trade (MOIT) and insurance companies on the agreement by 16 insurers to raise insurance premiums. However, the case is still far from being concluded.


Answering VTC News, Phung Dac Loc, Secretary General of the Vietnam Insurance Association, said that the move by the insurers proves to come in line with the Insurance Law. He affirmed that the viewpoint that the insurers are violating the Competition Law is just a ‘misunderstanding’.


The Competition Law allows exceptions, if insurers act for the sake of the insurance industry and insurance market.


Representatives from the Vietnam Insurance Association also said that higher premiums will bring more benefits to clients, and that clients should not be satisfied by services with low premiums and low quality.


The investigation is still being conducted by CAD, and no concrete conclusion has been made so far.


Meanwhile, representatives of transport firms, which bear direct impacts of the insurance premium adjustment, have critically protested the behaviour of insurers of spontaneously raising premiums.


Insurance companies are still insisting on the need of stopping the fierce competition among insurance companies by raising premiums from 1.3% to 1.56%, arguing that only when the fierce competition in premiums ends, will insurance companies be able to compete in quality.

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