KUALA LUMPUR – In a bid to combat the rising cost of premiums, the Finance Ministry (MoF) confirmed that Bank Negara Malaysia (BNM) will require insurance and takaful operators (ITOs) to provide a co-payment option for their medical products.
During the Dewan Rakyat Special Chamber session today, Deputy Finance Minister Lim Hui Ying said the move would be implemented during the third quarter of this year to encourage consumers to utilise their medical insurance more efficiently.
Lim’s statement comes in response to Kota Melaka MP Khoo Poay Tiong’s questions about reforms for the MHIT industry.
Citing examples from other countries, Lim explained that medical insurance and takaful products (MHIT), which require co-payment, can also result in lower premiums for consumers.
“In the third quarter of this year, BNM has made it compulsory for ITOs to offer new MHIT products, which would include a co-payment option. This is to make sure consumers use medical services more responsibly and reduce the price of premiums.
“We also believe this decision will reduce the number of fraudulent insurance crimes and increase the sustainability of MHIT products,” she said.
The deputy minister also highlighted that inflation in the medical factor and the buffet syndrome were among the reasons behind increasing insurance premiums.
The buffet syndrome is used to define actions by consumers who seek to maximise the value of their premiums without considering associated costs, contributing to the upward spiral of healthcare expenses.
Currently, Lim said, ITOs offer various MHIT products to consumers with incentives towards policyholders who do not make claims.
“These products with no claims bonus are among the initiatives by ITOs to encourage responsible use of MHIT.
“However, for now, BNM has no intention of making it compulsory for ITOs to offer such products,” the deputy minister said.
MoF’s statements are also in line with the Malaysian Takaful Association’s (MTA) comments to Scoop previously, which confirmed BNM’s directive for ITOs to offer at least one co-payment product.
Explaining the mechanisms behind this policy decision, MTA said that ITOs must offer a product with either a co-payment of 5% of total claimable expenses per policy certificate year and/or an RM500 deduction per policy certificate year.
According to BNM’s directive, ITOs will also not be allowed to design new MHIT products without the minimum co-payment feature.
The directive will be effective September 1, 2024. – July 1, 2024