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Keep it simple, Bank Negara tells insurance firms

Keep it simple, Bank Negara tells insurance firms

Insurance News:

 

To protect consumers, Bank Negara would like the insurance industry to help with making their own policies simpler for the public to comprehend.

 

The regulatory body has released product or service transparency and disclosure guidelines to insurance companies, emphasizing the significance of using “plain and intelligible language” when it comes to policy documents.

 

This really is to make it easy for consumers to comprehend their contractual legal rights and obligations, so that they can make informed decisions, a central bank official said.

 

“Work has already been beginning to enhance the wording in hospital and surgical insurance policies to make sure that easy words are used to clarify and draw attention to essential terms and conditions of the policy, which include, in particular, the medical ailments protected and those excluded from the policy,” she said.

 

For the pricing of medical and health insurance products, she mentioned these were determined by the insurance company or takaful operator based on actuarial guidelines.

 

Any changes to factors like exposure to anti-selection risk and medical inflation might lead to an assessment of the premiums, she explained.

 

“There are, nevertheless, safeguards in place. Insurance product pricing uses a qualified actuary from the insurance company to certify the reasonableness of the premium charged.

 

“This is relying on economic factors such as medical inflation, mortality and morbidity rate as well as investment performance of the insurer,” she said.

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By | 2016-11-01T10:40:12+00:00 April 20th, 2014|Latest Article/News|Comments Off on Keep it simple, Bank Negara tells insurance firms