KUALA LUMPUR, Feb 26 — A more in-depth study will be conducted to consider the feasibility of detailed reporting on the profit and loss of each medical insurance policy, said Deputy Finance Minister Lim Hui Ying.
She told Parliament that insurance and takaful operators (ITO) are not required to list the profit and loss of each medical insurance policy in detail at present. However, each ITO is required to declare its profit and loss in its annual financial statements under the Malaysian Financial Reporting Standard 17.
Lim was responding to Seputeh MP Teresa Kok's query on whether the government would instruct insurance companies to provide detailed listings of each medical insurance policy's profits and losses to ensure transparency in determining reasonable premium increases.
ITOs must ensure that any internal practices governing premium increases in medical and health insurance takaful products (MHIT) must consider the balance between policyholder affordability and the sustainability of the MHIT products.
“For example, ITOs must monitor the cost experience of MHIT claims objectively, and may only adjust premiums when the actual claims costs consistently decline and exceed the threshold value previously set in the ITO’s internal practices.
"ITOs are also prohibited from resetting premiums solely to increase their profits,” she said.
Bank Negara Malaysia has enhanced the business practice standards for MHIT, including efforts to raise consumer awareness through improvements in the product disclosure sheet (PDS), making it simpler and easier to understand.
“These improvements aim to encourage policyholders to better understand the terms and conditions of MHIT products and make more informed decisions.
The PDS will also state the claims ratio at the industry level to increase awareness among consumers that a significant portion of the premium is allocated to pay for claims,” "Lim said.
— Bernama
