Malaysia:Central bank seeks to update medical insurance requirements

Bank Negara Malaysia (BNM) has released an exposure draft setting out the Bank's proposed requirements and guidance in carrying on the medical and health insurance/takaful (MHIT) business.

The proposals seek to update the requirements on the conduct of the MHIT business, in line with the key strategies outlined in the Bank’s Financial Sector Blueprint 2022-20261 issued on 24 January 2022, to promote the following:

a) Ensure that consumers can access a wider choice of MHIT products that cater to different healthcare needs and within respective consumers’ reasonable means;

(b) Facilitate consumers’ decision-making process when purchasing MHIT products and promote enhanced understanding of MHIT products;

(c) Protect policy owners’/takaful participants’ interests;

(d) Preserve the continuity and sustainability of the MHIT business through sound underwriting and pricing policies; and

(e) Facilitate greater data sharing to support better cost control management and pave the way towards greater transparency.

BNM says that since 2006, the MHIT business has grown fivefold based on the total premiums and takaful contributions of MHIT policies/certificates underwritten by licensed insurers and takaful operators (licensed ITOs). During the same period, several significant developments have also influenced the MHIT business such as the rise in non-communicable diseases, the growth of private healthcare services and escalating medical inflation. These have contributed towards an increase in the utilisation of medical services and the magnitude of claims, where the MHIT claims had grown by 11.6% on average annually between 2006-2021.

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