Malaysia is considering further strengthening insurance regulations to better protect policyholders, particularly patients with critical illnesses and cancer, from arbitrary policy cancellations, retrospective claim rejections and unclear disclosure requirements, according to Deputy Finance Minister Liew Chin Tong.
Responding to a question from Cheras Member of Parliament Tan Kok Wai during the Dewan Rakyat sitting, Liew said existing safeguards are already in place under Bank Negara Malaysia’s (BNM) Medical and Health Insurance and Takaful (MHIT) policy document.
He said insurers and takaful operators are prohibited from unilaterally cancelling policies or certificates, and cannot terminate or refuse renewals solely because a policyholder has made claims or developed health conditions after coverage begins.
“ITO also cannot terminate or refuse renewal only because the policyholder has made claims or developed health issues after obtaining coverage,” he said in the written reply.
Liew added that claims must be assessed fairly according to contract terms, including whether treatment falls within coverage and is medically necessary. Assessments are carried out using standard treatment protocols and clinical practice guidelines, including those issued by the Ministry of Health.
He noted that in most cases, hospitals conduct pre-treatment verification to ensure policyholders are not later burdened with retrospective costs for procedures that were not pre-approved.
For treatments outside standard protocols, insurers are required to conduct further review. However, if the treatment is deemed medically necessary, claims must still be honoured.
The government is also strengthening coordination through the Healthcare Provider Protocol and Settlement Committee (HPPSC), which brings together industry players, hospitals, insurers and regulators to address disputes over MHIT claims. The committee has recently introduced initiatives to promote best practices in coverage assessments, particularly for new medical technologies and treatments.
Liew said Bank Negara Malaysia is also considering a broader “no look-back” moratorium framework, which would prevent insurers from rejecting claims based on pre-existing conditions that were not intentionally disclosed, after a policy has been active for a continuous period.
He added that industry data up to 2025 shows insurers maintain an average claims approval rate of more than 90%, with more than one million claims processed annually.
Policyholders with complaints are advised to first approach their insurer or takaful operator. If unresolved, they may escalate the matter to BNMLINK or the Financial Markets Ombudsman Service (FMOS), both of which provide free dispute resolution services.
The government’s latest remarks signal ongoing efforts to tighten oversight and improve transparency in Malaysia’s insurance and takaful sector amid rising concerns over claims disputes and medical cost coverage.
