KUALA LUMPUR: Bank Negara Malaysia (BNM)'s proposal to introduce a special clause in Medical and Health Insurance and Takaful (MHIT) plans needs to be closely monitored to ensure any price adjustments do not burden consumers.
Federation of Malaysian Consumer Associations (Fomca) chief executive officer T. Saravanan said the proposal should generally be welcomed, as it addresses a key issue faced by consumers, namely claim rejections due to pre-existing conditions.
However, he said the effectiveness of the proposal depends on how it is implemented.
"The continuous coverage period set must be reasonable and not too long, so that its benefits are not limited," he said according to Berita Harian.
"If the period is too long, consumers may be exposed to the risk of claim rejection during the critical early period. At the same time, there are concerns that the industry may pass this risk onto consumers through higher premiums.
"Therefore, it is important that any price adjustments are controlled and do not become a burden, especially with the rising cost of living," he added.
BNM governor, Datuk Seri Abdul Rasheed Ghaffour, reportedly said authorities are drafting a no look-back mechanism to protect consumer rights.
"After an agreed continuous coverage period, insurance companies and takaful operators would no longer be allowed to reject claims on the grounds of pre-existing conditions," he said.
Saravanan said many consumers only become aware of an illness after taking out coverage or do not fully understand disclosure requirements.
"With this clause, after an agreed continuous coverage period, insurance companies and takaful operators can no longer use pre-existing conditions to reject claims. This provides clearer assurance to consumers that the protection they pay for will truly work when needed," he said.
He added that transparency in implementing the clause is vital.
"Many consumers still face difficulties understanding the complex terms and conditions of policies. Therefore, information must be presented in easily understandable language, and consumers should be given adequate explanation before making decisions," he said.