Bank Negara Malaysia (BNM) has addressed misinformation circulating on social media, originating from certain registered agents of insurers/takaful operators (ITOs) and financial advisers’ representatives. These posts have encouraged consumers to purchase medical reimbursement products without co-payment features before September 2024.
According to BNM, starting September 1, ITOs are mandated to offer medical reimbursement products, such as medical cards, with co-payment options (including deductibles and co-insurance/co-takaful) at the point of sale or during the renewal of existing medical and health insurance/takaful (MHIT) policies/certificates. However, existing products without co-payment features, including those with deductibles under RM500, will still be available as outlined in the Policy Document on Medical and Health Insurance/Takaful Business released by BNM on February 29.
Products incorporating co-payment features typically feature lower premiums or takaful contributions compared to those without, with co-payment required only when claims are made. This approach aims to foster greater consumer awareness of healthcare usage, thus curbing fraudulent claims and stemming the inflation of medical costs, which have risen by 36.3% cumulatively from 2020 to 2022. Over the long term, BNM asserts that this strategy will maintain the affordability of medical insurance and takaful.
BNM advises consumers to carefully evaluate their financial circumstances and needs when selecting an MHIT product, and suggests contacting respective ITOs for further information on MHIT co-payment features.
New Framework for Digital Insurers and Takaful Operators
In line with the Financial Sector Blueprint 2022–2026, BNM has introduced the Policy Document on Licensing and Regulatory Framework for Digital Insurers and Takaful Operators (DITOs). This framework sets forth the requirements facilitating the entry of DITOs, aimed at enhancing inclusivity, competition, and efficiency through digital solutions.
Based on stakeholder feedback, BNM has adjusted the entry requirements for DITOs. These digital entities will undergo a foundational phase lasting between three to seven years to demonstrate 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 distinguished by their digital operations and innovative business models designed to meet consumer needs more effectively, particularly in addressing critical protection gaps within digital segments. They are expected to complement existing ITOs and other participants in the insurance and takaful sectors.
BNM emphasizes that licenses will be granted to applicants demonstrating the capacity to achieve the policy objectives while prioritizing rigorous risk management and robust consumer protection measures.
Interested applicants must submit formal applications to BNM between January 2, 2025, and December 31, 2026. Consultation with BNM is mandatory and can commence from October 1, 2024, via [email protected]. Applicants will be evaluated based on criteria covering prudential aspects, business conduct, consumer protection, Shariah compliance (where applicable), and measures against money laundering and terrorism financing. Additionally, they must present compelling value propositions tailored to Malaysia.
Applicants are required to adhere to the application procedures delineated in relevant policy documents, including the Financial Services Act 2013, Islamic Financial Services Act 2013, and guidelines for acquiring interests in shares to become a financial holding company.
This comprehensive framework aims to foster a competitive and resilient digital insurance and takaful landscape, ensuring robust protection for consumers while promoting innovation and efficiency in the financial sector.
