The Financial Planning Association of Malaysia (FPAM) welcomed Bank Negara Malaysia's (BNM) move to cap annual premium increases for medical insurance and takaful at 10%, noting that the rising medical costs and healthcare utilisation rate must be addressed to prevent significant premium hikes in the future, reported Bernama on Dec 21.

"A sustainable, long-term solution is urgently needed to ensure that MHIT products remain affordable for all," said FPAM President Alvin Tan in a statement.

Tan urged Malaysians who have recently surrendered their policies due to premium adjustments to contact their insurance agents or takaful operators (ITO) about reinstating their policies under BNM's directive which has lowered premiums for their medical insurance policies.

Meanwhile, National Association of Malaysian Life Insurance and Financial Advisors (NAMLIFA) President Krishnan Appanu called for greater transparency from insurers to spread premium changes over a minimum period of three years for all affected policyholders, urging insurers and takaful companies to issue detailed and transparent notices on the quantum of increases and provide fair options for policyholders.

Krishnan told Bernama that ageing policyholders face difficulties with annual premium hikes, potentially rendering medical insurance unaffordable when it is most needed.

BNM announced on Dec 20 that interim measures include requiring insurers to offer alternative insurance policies at the same or lower premiums for policyholders who are unwilling to continue with the repriced plans.

Krishnan said switching plans could provide practical options for many policyholders, but warned against reduced coverage or protection, particularly for those with pre-existing health conditions.