KUALA LUMPUR: The government, through bodies like Bank Negara Malaysia (BNM), should proactively regulate insurance premium hikes to prevent excessive increases, a consumer watchdog said today.
Federation of Malaysian Consumers Associations (Fomca) secretary-general Dr Saravanan Thambirajah suggested introducing caps on premiums, requiring insurers to justify hikes transparently, and fostering competition among industry players to protect consumers.
"BNM also should stop using excuses such as 'commercial decisions' and, for once, stand on the side of consumers.
"This situation is becoming unhealthy as the industry is spiraling out of control," he said.
Saravanan was responding to reports that medical insurance premiums are expected to rise up to 70 percent next year.
Saravanan said while Fomca acknowledged the challenges posed by rising healthcare costs, it was, however, imperative that measures are taken to protect consumers from disproportionate premium increases so that it will not burden consumers unfairly.
"Such significant hikes place an undue financial burden on consumers, especially during challenging economic times.
"We have previously received numerous complaints from policyholders regarding steep premium increases, some as high as 188 percent, making it difficult for them to maintain their policies, potentially leading to a lapse in coverage.
"This situation forces individuals to rely solely on public healthcare services, which are already under significant strain."
Saravanan also said there had been a lack of transparency from insurers on premium increases, oftentimes citing medical inflation and rising healthcare costs without providing detailed explanations and justifications.
This lack of clarity, he added, left consumers in the dark, unable to make informed decisions about their healthcare coverage.
"Ensuring the affordability and accessibility of medical insurance is crucial for the wellbeing of all Malaysians," said Saravanan.