Bank Negara Malaysia clarifies rules on medical insurance co-payment
Bank Negara Malaysia clarifies rules on medical insurance co-payment | Insurance Business Asia
Life & Health
Bank Negara Malaysia clarifies rules on medical insurance co-payment
Digital insurer framework also released
Life & Health
By
Roxanne Libatique
Bank Negara Malaysia (BNM) has identified the circulation of inaccurate information on social media by certain registered agents of insurers/takaful operators (ITOs) and financial advisers’ representatives.
These posts encourage consumers to buy medical reimbursement products without co-payment features before September 2024.
BNM said that starting Sept. 1, ITOs must provide medical reimbursement products, such as medical cards, with co-payment options (including deductible and co-insurance/co-takaful) at the time of sale or when renewing existing medical and health insurance/takaful (MHIT) policies/certificates.
Products with co-payment features typically offer lower premiums or takaful contributions compared to those without co-payment. Co-payment is required only when claims are made, encouraging consumers to be more mindful of their healthcare usage.
“This [approach] will help to reduce fraudulent medical claims and contain medical cost inflation that has risen by 36.3% cumulatively from 2020-2022. In the longer term, it aims to ensure that the cost of medical insurance and takaful remains affordable,” BNM said.
The bank urges consumers to assess their financial situations and needs when choosing an MHIT product.
“For information and clarification on the MHIT co-payment features, please contact your respective ITOs for more details,” it said.
Stakeholder feedback has led to revisions in the entry requirements.
BNM said DITOs will have a foundational phase lasting between three and seven years to prove their viability and operational soundness. During this phase, they will be subject to a lower minimum paid-up capital requirement, appropriate for their initial business stages.
Applications for Bank Negara Malaysia license
DITOs are characterised by digital operations and innovative business models designed to meet consumer needs more effectively. They are expected to address critical protection gaps in digital segments, complementing existing ITOs and other players in the insurance and takaful sectors.
BNM said it will grant licenses to applicants who demonstrate the capacity to achieve the policy’s goals while prioritising risk management and consumer protection.
Interested applicants must submit formal applications to BNM between Jan. 2, 2025, and Dec. 31, 2026. Prior consultation with BNM is mandatory and can begin on Oct. 1, 2024, via [email protected].
Applicants are required to meet assessment criteria, including:
prudential aspects
business conduct
consumer protection
Shariah compliance (where relevant)
anti-money laundering
terrorism financing measures
They must also demonstrate meaningful value propositions for Malaysia.
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