Insurers and takaful operators (ITOs) cannot unreasonably delay medical insurance claims or apply exclusions or conditions that are not stated in policy documents, says Bank Negara Malaysia (BNM).
First reported by CodeBlue, the central bank was responding to report published by CodeBlue on December 3, wherein a Stage 4 tongue cancer patient whose insurer, Allianz Life Insurance Malaysia Berhad, deferred all his cancer claims pending an “investigation” into an unrelated hypertension episode in 2024 that he did not claim for at the time, and subsequently asked him to provide medical records dating back to 2017.
In a written response to CodeBlue last Friday, BNM stated that ITOs are required to settle claims fairly and promptly, and must not unreasonably delay or deny claims unless there is valid justification. It added that these operators are prohibited from imposing conditions or exclusions that were not disclosed to policyholders in the policy documents and related materials.
The central bank also said that it has the authority to investigate and enforce compliance when violations occur.
The regulator's statement seems to establish a clear boundary against applying exclusions or waiting periods that were not explicitly stated in policies. The cancer patient in question had a policy that only mentioned a 30-day general waiting period and a 120-day waiting period for specified illnesses, said CodeBlue.
Although BNM emphasized that insurers must not delay claims unreasonably, it did not commit to establishing mandatory deadlines for processing claims or approving guarantee letters. The central bank did not explain what it considers to be prompt settlement, nor did it indicate whether extended deferrals—where insurers neither approve nor reject a claim—would qualify as unreasonable delay under its regulations.