Medical & Health Insurance in Malaysia

Agency Relationship

• An agent has a duty to exercise proper care and skill, account for monies received on behalf of the principal, obey the principal's instructions, and act in good faith towards the principal.

Insurance Policy

• A limitation applied to the Hospital and Surgical Insurance (HIS) policy is the Rejection limit.
• The benefit provided by the HIS policy is the reimbursement of medical expenses.
• For continuity of coverage of renewable policies, the insurer shall not refuse to increase the amount of cover due to certain material facts, unilaterally terminate the policy during the cover period, or reject the policy renewal.

Underwriting

• A medical and health insurance underwriter may seek further medical investigation and/or documentation from the proposer if they engage in dangerous sports, have an adverse medical history, or have an occupational hazard.
• Age and gender are important considerations in medical and health insurance, with females having a higher rate of morbidity as compared to their male counterparts.

Disclosure Requirement

• The necessity must be disclosed to a person invited to enter into a contract of insurance under the Financial Services Act 2013.

Agency

• A principle may terminate an agency by giving one of the following notices to the agency, except completion.
• Insurance agencies are created through the creation of agency of necessity, agency by ratification, implied agreement, or express agreement.
• In addition to paying the agreed commissions, a principle must reimburse the agent any money expended in the course of carrying out their duties, which is called the agent's right to indemnity.

Employee Benefits

• Employers provide health care benefits to their employees, which normally comprise an essential part of the remuneration package, by arranging a group medical and health insurance policy.

Medical and Health Insurance Products

• Permanent disability income insurance, Hospital & Surgical insurance, Disability income insurance, and Critical Illness or dread disease insurance are medical and health insurance products.
• The standard Hospital & Surgical Insurance policy covers kidney dialysis, ambulance fees, and outpatient day care surgery, but not organ transplant.

Guideline on Medical & Health Insurance Business

• Bank Negara Malaysia has issued guidelines to reduce mis-selling and misrepresentation to consumers, enhance access to healthcare through private insurance, and contain costs to promote long-term sustainability of the private health insurance sector.

Pre-existing Conditions

• Pre-existing health conditions need to be disclosed at the time of proposing a medical health plan by the proposer, but an incident of ankle sprained 6 months prior to proposal does not need to be disclosed as a pre-existing condition.

Benefit Limitations

• Benefit limitations are modifications to medical and health insurance coverage, and the option to reduce coverage at the time of claim is not a benefit limitation.

Underwriting Methods

• Methods of underwriting to avoid anti-selection when dealing with sub-standard risks or high-risk individuals include rating, exclusion, limitation, and deductible.