Insurance groups announce interim measures to alleviate impact of premium hikes

KUALA LUMPUR, Dec 20 — The Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (PIAM) today announced interim measures to support policyholders and participants impacted by the recent premium and contribution repricing.

In a joint statement, the associations said these measures aim to ease the financial burden on policyholders and participants so that they can continue to be covered by medical and health insurance or takaful (MHIT).

“The industry recognises the sensitivity of the situation and remains committed to assisting policyholders and participants during this transition,” they said.

Earlier today, Bank Negara Malaysia (BNM) announced interim measures to help manage the impact of MHIT premium adjustments, with insurers and takaful operators (ITOs) to spread out the changes in premiums over a minimum of three years for all policyholders affected by the repricing.

According to the joint statement, the interim measures include spreading out future premiums and contribution increases arising from repricing due to medical claims inflation.

In addition, it will implement a one-year temporary pause in premium and contribution adjustment arising from medical claims inflation for those aged 60 and above who are covered under the minimum plan within the MHIT products they purchased.

“Policyholders or participants who have surrendered or lapsed their policies or certificates due to medical repricing in 2024 will be eligible for reinstatement without additional underwriting requirements.

“To supplement the interim measures, ITOs will offer appropriate alternative MHIT products at the same or lower premiums for policyholders who do not wish to continue their existing MHIT plans that have been repriced,” it added.

Meanwhile, the industry said it is collaborating with BNM, the Ministry of Health, and the Association of Private Hospitals Malaysia to develop sustainable strategies to address the financial impact of rising healthcare costs and medical claims.

“This includes setting up a RM60 million fund by the government, insurers, takaful operators and private hospitals to expedite broader health reforms in the Malaysian healthcare system.

“In addition, part of the fund will also be used to facilitate the development of a base MHIT product that covers essential healthcare needs and facilitate policyholders aged 60 years old and above to switch to the new base product, once available,” said the statement. — Bernama