KUALA LUMPUR — The Life Insurance Association of Malaysia (LIAM) has denied saying there would be “no immediate change” to the premium hikes of 40% to 70%, stressing that it is in continuing discussions with Bank Negara Malaysia (BNM) on measures to ease policyholders’ burdens
LIAM said this in a statement carried by Bernama, also reiterating its previous statement that the hike in premiums was the result of an “unprecedented rise” in claims over the past few years which were higher than the premiums collected.
“Over the period of 2021 to 2023, unprecedented cumulative medical claims cost inflation of 56% placed many insurers in a critical position on their medical books of business, having to manage a high ratio of claims over premiums.
“The rising cost of care at private hospitals, as well as the sharp increase in the number of policyholders seeking treatment, have driven up claims and premiums,” it added.
The association’s statement today appears to deny remarks by its CEO Mark O’Dell, who yesterday was reported by Business Times saying in an interview, that there will be no changes to the announced hikes for medical insurance premiums next year.
Instead, O’Dell said in the interview that insurers have agreed to implement “gradual repricing adjustments in the future”.
Future measures would include repricing at more frequent intervals, rather than lumping the adjustment every three or four years.
Earlier, on Nov 29, LIAM in a joint statement with the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (PIAM) said insurers have committed to staggering repricing adjustments, and to offering flexible premium payment plans for medical insurance premiums following a directive by BNM to review its repricing strategy.
O’Dell’s interview with Business Times subsequently clarified that the joint statement was in reference to future measures, and not the hikes to be implemented next year.
This drew criticism from lawmakers today, led by Bayan Baru MP Sim Tze Tzin, who demanded to know if O’Dell’s remarks to Business Times meant LIAM was deliberately going against the central bank’s directive.
“Mark O’Dell’s statement that insurance companies only agreed to implement a gradual repricing adjustment in the future contradicts Bank Negara’s statement.
“We request BNM to clarify the actual situation. Will insurance contributions increase as planned by the ITOs (insurance and takaful operators)? Will BNM instruct ITOs to review the increase? What action will BNM take against ITOs who disobey BNM’s instructions?” Sim said at a press conference in Parliament today.
LIAM in its latest statement said insurers actively collaborates with BNM, the Health Ministry and the Association of Private Hospitals Malaysia (APHM) to develop long-term strategies to address the financial impact of rising costs and medical claims. – December 4, 2024