Insurance companies, takaful operators agree to review premium hikes - Lim Hui Ying

KUALA LUMPUR - Insurance companies and takaful operators (ITO) have assured they will take appropriate measures, including revisiting the proposed premium hikes for medical insurance expected to begin next year.

Deputy Finance Minister Lim Hui Ying said that one of the commitments agreed upon by ITO was the gradual adjustment of premium prices.

Additionally, she said that ITOs were prepared to set up dedicated hotlines for each company to offer flexible contributions, provide options for different service plans and implement more effective resolution mechanisms.

"The government is aware of concerns regarding the repricing of medical and health insurance and takaful by insurers, as it impacts policyholders or takaful participants.

"ITO is required to provide suitable solutions for policyholders severely affected by the premium hikes to ensure they continue to have protection (takaful or insurance).

"Further details on this matter will be announced soon," she said at the Dewan Rakyat on Thursday.

She was responding to a supplementary question from Khoo Poay Tiong (PH-Kota Melaka) regarding current government measures to address the inflation of medical costs that prompted ITOs to drastically raise premiums.

Earlier, the media reported that Bank Negara had urged ITOs to review their strategies for repricing medical and health insurance (MHIT) to ensure they are more reasonable.

Meanwhile, Lim noted that the government was open to suggestions for allowing medical card users and Takaful policyholders to switch their Takaful operators without resetting their waiting period, similar to the Mobile Number Portability (MNP) process.

However, the Tanjong Member of Parliament explained that there were constraints, considering the differences between the two services.

"Medical insurance and takaful products differ from mobile phone numbers, as they involve long-term risk pooling and strict consumer behaviour requirements.

"The waiting period is intended to prevent fraud or abuse, ensuring newly identified policyholders with medical conditions do not take advantage of insurance coverage without first contributing to the risk pool.

"This would otherwise increase claim costs and contribution premiums, affecting affordability for other policyholders and jeopardising the sustainability of the products," she explained.