MOF: Insurance companies, Takaful operators need to investigate all claims, ensure fair service
KUALA LUMPUR: Bank Negara Malaysia has required insurance companies or takaful operators to conduct comprehensive and objective investigations into all claims submitted by consumers.
This is to ensure that fair treatment is given to consumers and to ensure that insurance companies and takaful operators fulfill their responsibilities and do not use exclusion clauses as an excuse to deny legitimate claims.
Deputy Finance Minister Lim Hui Ying said insurance companies or takaful operators are also required to ensure that the settlement of insurance or takaful claims offered to consumers is fair, has taken into account relevant factors and represents the claimant’s reasonable rights under the insurance policy or takaful certificate.
“Should an insurance company or takaful operator reject an insurance or takaful claim in whole or in part, it is required to provide a clear explanation to the claimant about the rationale for the decision, including the policy themes or exceptions referred to,” she said during a question and answer session in the Dewan Rakyat today in reply to a question from Datuk Ngeh Koo Ham (PH-Beruas) who asked the Minister of Finance to state the steps taken to ensure that insurance companies are responsible for the policies issued and do not use various tricks to refuse to pay compensation.
She said that in order to improve consumers’ understanding of insurance policies or takaful certificates, Bank Negara Malaysia’s guidelines on product transparency and disclosure outline, insurance companies or takaful operators should ensure that the disclosures have emphasised important goals including terms and key features of insurance products such as restriction penalties, early termination of contracts as well as information related to the rights and obligations of consumers.
She said the exclusion clause specifies certain conditions that are not covered by a policy – it depends on the type of policy, for example in motor insurance, among the common exclusions are driving under the influence of alcohol or drugs, illegal use of a vehicle, self-harm, undeclared existing illness or false claims.
“If a situation falls under one of these exceptions, the insurance company or takaful operator is not obliged to pay claims related to the event or situation.
“However, additional coverage with added premiums can be obtained for such events like natural disasters or pre-existing diseases,” she said.
She said if policyholders or takaful customers do not receive satisfactory service, they can make a complaint to the complaint channel provided by the insurance company or to Bank Negara Malaysia through the elink channel.
“Furthermore, consumers can refer to the independent Ombudsman for Financial Services (OFS) for free to deal with disputes fairly and quickly if consumers are not satisfied with the final decision of the insurance company or takaful operator that rejects their claim based on the exclusion clause,” she said.
She said Bank Negara Malaysia will also monitor from time to time if there are fake insurance companies or products that do not meet or follow the terms or conditions set out when the insurance is written.