KUALA LUMPUR — The hike in insurance premiums by 40% to 70% next year is burdensome and unfair, especially to senior citizens who have been loyally contributing to insurance companies, a group of lawmakers said today.
Bayan Baru MP Sim Tze Tzin, who led the group in a press conference today, said loyalty was not rewarded as seen from complaints elected representatives have received.
Most of the 147 complaints received were about unreasonably high increases in premium payments each year without any new benefits to the coverage of those insured.
Sim cited the case of a 74-year-old woman who had been the loyal customer of an insurance company for 18 years.
“Her total insured about is RM60,000 but she has paid more than that for the past 18 years (in premiums).
“She is now worried that she can no longer afford to pay the drastic increase in premiums, which have increased every year for the past 10 years.
“Each year, the increase is excessive. For this year, she has to pay RM10,815 compared to RM6,065 last year.
“She is retired and can no longer afford to pay but the insurance premium continues to increase.
“People like her are in a desperate situation, even though they are loyal to the company, but what do they get?” Sim said at the press conference in Parliament.
He reiterated calls for Bank Negara Malaysia (BNM) to intervene using the Financial Services Act, and to stop insurance and takaful operators (ITOs) from such “unfair business activities”.
Sim also took issue with the statement by Life Insurance Association of Malaysia (LIAM) CEO Mark O’Dell, who said the 40% to 70% premium increase next year would proceed, and that staggered repricing adjustments would be done “in the future” at more regular intervals instead of waiting once every three years .
Sim asked if LIAM was deliberately going against BNM’s directive to review their repricing strategies to ensure less burden on consumers.
“Mark O’Dell’s statement that insurance companies only agreed to implement a gradual repricing adjustment in the future contradicts Bank Negara’s statement.
“We request BNM to clarify the actual situation. Will insurance contributions increase as planned by the ITOs? Will BNM instruct ITOs to review the increase? What action will BNM take against ITOs who disobey BNM’s instructions?
“We call on BNM to clarify the actual situation because this confusion will damage the central bank’s good name as defender of the people,” Sim said.
LIAM, the General Insurance Association of Malaysia (PIAM and the Malaysian Takaful Association in a joint statement recently said the premium hike next year was an unavoidable step due to “unprecedented” medical claims made since the Covid-19 pandemic, increasing cost of medical treatment, and advances in healthcare technology.
Other lawmakers at the press conference today included Sg Petani MP Taufik Johari and Tebrau MP Jimmy Phuah. – December 4, 2024