MySalam is an example of poor governance

(Bernama pic)

I refer to Dr Yew Lim’s letter on MySalam.

Even though the good doctor included a disclaimer denying any relationship with Great Eastern Holdings, he has put up a sound argument on some points which reflects his knowledge on how the insurance industry works.

First of all, I agree with him that in any insurance scheme, the coverage would only be for new members who do not have any pre-existing conditions (PEC). To cover people with PEC at such a scale, it would not be appropriate to call it insurance.

The whole concept of insurance is that the covered person has an equal opportunity to enjoy the benefit of the insurance programme.

With coverage of people with PEC, the remaining pool of members no longer has an equal opportunity to claim for a benefit.

I have no professional or personal objection on Great Eastern running the scheme. However, I have a major concern on the ways the Pakatan Harapan (PH) government is handling this programme.

It reflects poorly from a transparency perspective. It also shows the lack of the government’s ability to develop a programme which makes financial sense to the country. This puts PH in the same league as the Barisan Nasional government.

The RM2 billion reflects the present value of the 30% profit from Great Eastern in the next 10 years. The decision to exchange 30% share with RM2 billion itself is a poor economic decision.

Great Eastern should have been instructed to float its 30% in the stock exchange which would benefit many Malaysians from all walks of life. Instead, Great Eastern’s profits would be channeled to Singapore.

Great Eastern’s appointment to run the MySalam programme without any competitive bidding also showed a lack of transparency. What happened to the concept of open tender? Is the PH government reneging on its own promise?

Governance and transparency issues aside, let us focus on the issue of critical illness. What are the critical diseases in the minds of the public?

The B40 group would not appreciate the insurance definition of “critical illnesses”. I would not be surprised if the critically ill who are denied claims – because they failed to meet the insurance definition of “critical illnesses” – would seek the help of politicians. I would not be surprised if even “Bossku” and gang would politicise it.

From a financial perspective, Dr Yew Lim showed his maths. Allow me to also illustrate mine.

RM2 billion for 3.7 million people would mean that it cost the government RM540 per person.

Should the B40 group gamble and participate in a game of chance of striking a lottery of RM8,000 or is it better for the government to give RM540 for every member of the B40 group under the Bantuan Sara Hidup (BSH) programme?

The lottery scheme according to his computation would only benefit 250,000 people from the 3.7 million and I can only make an educated guess that one million of the 3.7 million applications would be rejected.

Now, translate the rejected claims to political impact. How many votes would PH  lose in the next general election?

Overall, I must reiterate that the issue lies solely with the PH government, especially the finance ministry. Great Eastern is a benefactor of this scheme.

The overall losers are Malaysians who expected a better and accountable government and also the opportunity to participate as shareholders of Great Eastern.

Dr Mohamed Rafick Khan is an FMT reader.