PETALING JAYA: The Financial Planning Association of Malaysia (FPAM) sees the move by insurers and takaful operators (ITO) to cap yearly premium adjustments at 10% for at least 80% of policyholders as a positive step.
The association believes this measure will help alleviate the financial burden faced by many Malaysians due to medical claims inflation and escalating healthcare costs.
FPAM president Alvin Tan said it encourages Malaysians who have recently surrendered their policies due to premium revisions to contact their insurance agents or ITO immediately to discuss the possibility of reinstating their policies at a lower premium in accordance with Bank Negara Malaysia’s (BNM) directive.
“Ensuring uninterrupted protection is critical for financial stability and peace of mind,“ he said in a statement.
FPAM welcomes the interim measures announced by BNM last week to address Malaysians’ concerns about premium revisions for medical, health and takaful (MHIT) products.
However, FPAM remains concerned that these interim measures are set to expire by the end of 2026.
It noted that without addressing the root causes of rising medical costs and the increasing utilisation of medical services, Malaysians may continue to face significant premium adjustments beyond 2026. A sustainable, long-term solution is urgently needed to ensure MHIT products remain affordable for all.
FPAM also highlighted the concerns of households whose annual income growth does not keep pace with double-digit premium inflation.
“Many families are worried about the rising costs, which outstrip their ability to pay for necessary insurance coverage. This disparity underscores the importance of systemic reforms to balance affordability with adequate protection,” said Tan.
In addition, FPAM called on regulators, ITO and other stakeholders to collaborate to improve public awareness of medical billing practices in private healthcare facilities.
“The public must be equipped with the knowledge to scrutinise hospital bills and question any potential overcharges. Transparency and education are vital to containing unnecessary costs,” Tan emphasised.
Think tank Datametrics Research and Information Sdn Bhd managing director Pankaj Kumar welcomed the measures introduced by the central bank to address escalating cost of medical insurance.
“However, these are seen as rather a short to medium-term measure as the core issue is the high hospital charges and we need to address that in a more holistic manner, especially when it involves pure profiteering, taking advantage of an insured patient,“ he told SunBiz.
Association of Private Hospitals Malaysia (APHM) president Datuk Dr Kuljit Singh said the association is weighing in on BNM’s interim measures to assist policyholders and to promote continued access to suitable medical and health insurance and takaful products.
“APHM welcomes this positive interim measure by Bank Negara Malaysia as an immediate step in alleviating the burden of Malaysians and prioritising the health of the country. We value patient well-being and APHM, along with ITOs and the government, will contribute to the RM60 million fund to accelerate health reforms,“ he said.
In addition, Dr Kuljit said APHM is in discussions with key stakeholders to ensure both the short-term and long-term solutions are sustainable and in the best interest of all.
Last week, the Life Insurance Association of Malaysia, Malaysian Takaful Association and Persatuan Insurans Am Malaysia or General Insurance Association of Malaysia announced interim measures to support policyholders impacted by the recent premium repricing.
In a joint statement, the agencies said the interim measures include spreading premium increases due to medical claims inflation over at least three years until the end of 2026 and limiting annual adjustments to under 10% for 80% of policyholders.
Further measures include a one-year freeze on premium increases for those aged 60 and above covered under the minimum plan, allowing reinstatement of policies lapsed or surrendered in 2024 without additional underwriting and offering alternative MHIT products at the same or lower premiums for policyholders unwilling to continue repriced plans, with insurers required to make these products available by the end of 2025.
Age-related premium increases remain unaffected and will be managed by insurers or takaful operators.
