KUALA LUMPUR, July 23 — Bank Negara Malaysia (BNM) has robustly defended its new directive that mandates a minimum 5% copayment for all new health insurance and takaful products, asserting that the regulation does not infringe on anti-competition laws.
The central bank emphasized that this policy aims to offer consumers more affordable insurance options while fostering competition within the industry.
In a recent statement to CodeBlue, BNM clarified that the mandate, which took effect on June 1, is intended to provide lower-cost alternatives with potentially reduced premiums. Despite the new copayment requirement, existing insurance products without this feature will continue to be available, preserving a variety of choices for consumers.
“Bank Negara Malaysia requires insurers and takaful operators to introduce medical and health insurance products with a copayment feature as a cost-effective option for consumers. Current offerings without copayments remain available, ensuring that consumers retain their options,” BNM stated.
The central bank further noted that insurers and takaful operators are expected to provide a diverse range of products with varying copayment levels to accommodate different financial situations, thereby maintaining market competition.
However, a 2020 study reported by CodeBlue recently voiced concerns that the mandatory copayments could potentially breach anti-competition regulations. The study highlighted that while copayment products might lower premiums, they could also lead to increased overall costs for consumers due to additional out-of-pocket expenses.
Critics fear that, despite the continued availability of non-copayment products, the market may gradually shift towards copayment options. This shift could eventually limit consumer choices as non-copayment products become less prevalent.
BNM’s February 29 policy document on Medical and Health Insurance/Takaful Business confirms that existing products, including those without the mandatory 5% copayment, can continue to be sold until insurers decide to withdraw them from the market.
