FOMCA: Most Insurance Policyholders Do Not Fully Understand Their Policies

Alex Cheong Pui Yin

12th October 2020 - 2 min read

(Image: New Straits Times)

A survey by the Federation of Malaysian Consumers Associations (FOMCA) has revealed that a majority of insurance policyholders lack complete understanding of their insurance policies.

The president of FOMCA, Datuk Marimuthu Nadason, said that FOMCA’s recent survey indicated that 73% of the policyholders polled do not fully comprehend the content of their policies, including the coverage offered. “Many of them only realised that they have been short-changed when they filed for claims. It is high time the authorities intervene to ensure greater transparency in the sector,” he further said.

In light of this, FOMCA said that it will be submitting a memorandum to Bank Negara Malaysia (BNM) in the following week to address the issue. Datuk Marimuthu explained that the document will request for the central bank to check for ambiguity in insurance schemes that go against the interest of policyholders.

Prior to this, FOMCA had also released a recent statement urging BNM to avoid approving any proposed increase in medical insurance premiums. The organisation further claimed that increases to insurance premiums during this challenging period would show that insurance companies are not truly portraying the cause that they are championing: healthcare protection at a time of need.

Meanwhile, the chief executive officer of the Life Insurance Association of Malaysia (LIAM), Mark O’Dell had commented that medical insurance premiums in Malaysia have been growing at an unsustainable rate in recent years. He noted that the premiums have been increasing between an annual rate of 6% to 8% over the past few years, which could soon make the plans unaffordable for many people, including consumers in the middle-income group.

(Image: The Star)

O’Dell also added that LIAM is making active effort to investigate the situation, such as setting up the Medical Cost Containment Task Force (MCCTF) to suss out the key drivers of the increasing premiums.

Separately, a LIAM representative has confirmed that LIAM will not be increasing premiums in 2020.

(Source: The Star)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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