Bank Negara Malaysia (BNM) has moved to address misinformation circulating on social media concerning medical insurance practices, particularly related to co-payment requirements. The central bank highlighted that certain agents of insurers/takaful operators (ITOs) and financial advisers have been misleading consumers regarding the purchase of medical reimbursement products without co-payment features before September 2024.
Effective September 1, BNM mandates that ITOs must offer medical reimbursement products, including medical cards, with co-payment options (such as deductibles and co-insurance/co-takaful) at the point of sale or policy renewal for medical and health insurance/takaful (MHIT) policies/certificates. However, existing products without co-payment features, including those with deductibles below RM500, will continue to be available as specified in the Policy Document on Medical and Health Insurance/Takaful Business released on February 29.
Products incorporating co-payment features typically come with lower premiums or takaful contributions compared to those without, with co-payment requirements triggered only upon claims, thereby encouraging prudent healthcare utilization among consumers.
“This approach is aimed at curbing fraudulent medical claims and managing the 36.3% cumulative increase in medical cost inflation from 2020 to 2022. In the long term, it seeks to maintain the affordability of medical insurance and takaful,” BNM stated.
BNM advises consumers to carefully evaluate their financial circumstances and needs when selecting an MHIT product, suggesting direct consultation with respective ITOs for detailed information on co-payment features.
New Framework for Digital Insurers and Takaful Operators
In alignment with the Financial Sector Blueprint 2022–2026, BNM has introduced the Policy Document on Licensing and Regulatory Framework for Digital Insurers and Takaful Operators (DITOs). This framework aims to facilitate the entry of digital insurers and takaful operators, promoting inclusivity, competition, and efficiency through innovative digital solutions.
Based on stakeholder feedback, BNM has revised the entry requirements for DITOs, emphasizing their role in addressing critical protection gaps within digital market segments, complementing existing players in the insurance and takaful sectors.
BNM will grant licenses to applicants demonstrating the capability to meet policy objectives, with a strong focus on risk management and consumer protection. Interested parties must formally apply to BNM between January 2, 2025, and December 31, 2026, following mandatory prior consultation starting October 1, 2024, via [email protected].
Applicants must satisfy comprehensive assessment criteria covering prudential aspects, business conduct, consumer protection, Shariah compliance (where applicable), as well as anti-money laundering and terrorism financing measures. Additionally, they are required to present compelling value propositions tailored to Malaysia’s market needs, adhering to outlined application procedures under relevant financial legislation.
This regulatory framework underscores BNM’s commitment to fostering a robust and inclusive financial ecosystem while safeguarding the interests of Malaysian consumers.
