KUALA LUMPUR – Bank Negara Malaysia (BNM) has directed insurers and takaful operators (ITOs) to review their repricing strategies, following concerns over rising premiums for medical and health insurance and takaful (MHIT) products.
The central bank reiterated its commitment to ensuring the public has access to suitable coverage.
The central bank reaffirmed its commitment to ensuring that the public continues to have access to “suitable insurance and takaful products.”
“In addressing the impact on policy owners/takaful participants, BNM has required ITOs to review their current repricing strategies for more reasonable implementation of such repricing,” the central bank said in a statement.
“This includes managing increases in premiums/contributions over time, taking into account the impact on policy owners/takaful participants.”
Further details on the available options will be announced by the insurance and takaful industry soon.
BNM explained that the rising costs of healthcare, driven by medical cost inflation and increased utilisation of medical services, have been a key factor in the premium hikes.
The central bank stressed that “comprehensive reforms” are necessary to contain medical cost inflation and ensure continued access to appropriate MHIT protection.
BNM called for greater cooperation between relevant stakeholders, including ITOs, the Health Ministry, the Association of Private Hospitals Malaysia, health practitioners, consumer groups, and policyholders.
The issue has also attracted political attention, with Bayan Baru MP Sim Tze Tzin urging BNM to take more decisive action.
He criticised the bank’s response, which labelled the premium hikes as “business decisions” made by the companies.
“We urge Bank Negara to investigate and review the insurance companies that have issued premium hikes,” Sim said.
“BNM has the authority to regulate the decisions of insurance companies. It should not just wash its hands of the matter by citing it as a business decision by the companies. They claim it is a free market with willing buyers and sellers. That’s not true.”
Sim further questioned why BNM had not intervened, drawing comparisons to the Ministry of Domestic Trade and Cost of Living (KPDN) regulating even minor price increases.
“If the Ministry of Domestic Trade and Cost of Living can investigate or regulate excessive profits from a 10 sen price increase for an egg, why can’t Bank Negara investigate the hike of premiums by dozens, even hundreds of ringgit?” he asked.
The anticipated premium hikes, which are expected to range from 40% to 70%, have been attributed to rising medical costs in private hospitals.
This issue has been highlighted by Manvir Victor, Chairman of Patient for Patients Safety Malaysia, who called for government intervention to prevent the public from shouldering the burden of these price hikes.
“This is unjustified and could lead many individuals to cancel their insurance policies, potentially overloading the already strained public healthcare system,” Manvir said.
Meanwhile, the President of the Association of Private Hospitals Malaysia (APHM), Datuk Dr Kuljit Singh, acknowledged the need for premium increases to be reasonable.
However, he argued that if the premium hikes were aligned with improvements in medical services, they could be justified for those requiring medical treatment.
Sim, however, expressed concerns about the rising premiums, attributing them to the soaring and uncontrollable charges at private hospitals.
“The rise in health insurance premiums is directly and indirectly linked to the soaring and uncontrollable charges at private hospitals,” he said.
He warned that many policyholders, particularly in the M40 income group, were being forced to cancel their insurance and return to government hospitals, thereby placing additional strain on public healthcare.
“The private healthcare ecosystem is closely linked to the public healthcare system, which is funded by the Ministry of Health and the federal government,” Sim explained.
“The rise in private hospital charges has led to higher health insurance premiums, as the two systems are interconnected.” – November 28, 2024
