BNM orders insurers, takaful operators to review pricing strategies

 

BNM said it remains committed to ensuring that the public continues to have access to suitable insurance and takaful products.

PETALING JAYA: 

Bank Negara Malaysia has told insurers and takaful operators (ITOs) to review their current repricing strategies for more “reasonable implementation” after reports of a hike in medical insurance premiums next year.

In a statement, the insurance regulators said this review includes managing increases in premiums or contributions after taking into account their impact on policy owners or takaful participants.

“ITOs are required to offer viable options for policy owners or takaful participants who are significantly impacted by the higher premiums or contributions to (allow them to) continue having insurance or takaful coverage,” said BNM.

“ITOs must also ensure the options they provide are meaningful. (ITOs should also) provide additional measures to support affected policy owners or takaful participants.”

BNM added that it remains committed to ensuring that the public continues to have access to suitable insurance and takaful products.

It was reported on Tuesday that medical insurance premiums are expected to rise by 40-70% next year, with some policyholders choosing to terminate their policies as they are unable to bear the escalating cost of the monthly fees.

Utusan Malaysia reported the impending increase based on notices sent by insurance providers to policyholders, citing the rising cost of healthcare at private hospitals.

In their statement, BNM noted that the cost of healthcare has risen significantly over the years due to medical cost inflation and the increased utilisation of medical services and procedures.

“Therefore, comprehensive and coordinated reforms to contain medical cost inflation will be critical to preserve continued access to appropriate medical and health insurance and takaful protection,” it said.

BNM also called on the relevant stakeholders such as ITOs, the health ministry, the Association of Private Hospitals Malaysia (APHM), consumer groups, policy owners and takaful participants to cooperate to achieve this outcome.

Earlier today, the Malaysian Medical Association warned that the spike in medical insurance premiums may result in further dependency on an already overburdened public healthcare system.

On Tuesday, APHM said the impending surge in medical insurance premiums was justified as it would support development in medical care and technology. - FMT