PCE - Part A(2) Medical and Health Insurance

1. PCE - Part A(2) Medical and HealthInsurance Revision 01 (25/11/2011)

2. CHAPTER 9 MEDICAL HEALTH INSURANCE “Introduction”

3. Product Disclosure & Transparency in the Sale of MHI Policies • Objectives: • Protect policy owners’ interest • Facilitate consistency in disclosure of essential information of MHI business • Minimise the chances of mis-selling

4. Why MHI • Ease the financial burden caused by adverse changes in health • MHI- one way people can reasonably afford to pay for the cost of such treatment

5. Principles Applicable to MHI Insurable Interest Utmost Good Faith Proximate cause Indemnity Contribution Subrogation

6. 2 Categories of MHI • Indemnity policies • E.g. Hospitalization and Surgical Insurance • Benefit Policies • E.g. Critical illness and Disability income Insurance

7. Standards of MHI • MHI policies limits • Per disability limit • Overall annual limit • Lifetime limit • Claim payment does not terminate coverage except • in the event of a death claim MHI risk increases with time

8. Standards of MHI • ‘Cashless’ Hospital Admission • Panel Hospitals • Cost Containment Measures • Inner limits • Schedule of Surgical Procedures • Maximum period of compensation • Timeframe during which expenses are paid • Co-payment for Upgraded rooms • Deductibles • Panel of hospitals

9. CHAPTER 10 MEDICAL HEALTH INSURANCE “Types of MHI”

10. Types of Medical & Health Insurance • Individual vs. Group policies • MHI policies comprise of: • Medical Expenses Insurance • Hospitalization and Surgical Insurance &/or • Major Medical Expenses Insurance • Hospitalization Cash Benefit Insurance • Critical Illness Insurance • Disability Income Insurance

11. Medical Expense Insurance Coverage: Clinical Insurance (primary care) Dental Insurance Maternity Insurance Payment: Pay for treatment cost of a disability as stipulated in the policy Limitation: May impose some form of deductible or co-sharing

12. Two Common Expense Participation Methods • Deductibles • A fixed amount • A percentage • A combination of percentage & fixed amount • Co-payments

13. Hospitalization & Surgical Insurance Coverage: • Hospital Room & Board • Intensive Care Unit • Hospital Supplies & Services • Surgeon’s Fees • Operating Theatre Fees Payment: • Treatment costs when treated as an in-patient (hospitalization) or surgically treated Note: Additional benefits can be referred in Pg. 12

14. Major Medical Expenses Insurance Coverage: • Broad and substantial protection from large and unpredictable healthcare expenses. May take the following forms: • Supplemental Major Medical Insurance • Comprehensive Major Medical Insurance • Excess Major Medical Insurance

15. Hospitalization Cash Benefit Insurance Coverage: • Stand-alone policy / a rider to life insurance / medical & health insurance Payment: • Pays the daily amount stated in contract for each day insured is hospitalized

16. Critical Illness Insurance Coverage: • Dread Disease insurance • Stand-alone or as a rider to a life policy Payment: • Lump sum payment upon diagnosis of a covered illness specified in contract

17. Disability Income Insurance Coverage: • Known as Permanent Health Insurance • Commonly sold as a rider attached to a basic life • Insurance. • Payment: • Provide periodic payments when insured is unable • to work.

18. Section 186 of the Insurance Act 1996 • Individual Policies • Name of the licensed insurer • Relationship with the licensed insurer • Premium charged by the licensed insurer • Group Policies • Name of the licensed insurer • Relationship with the licensed insurer • Conditions of the group policy & remuneration payable to him • Premium charged by the licensed insurer

19. CHAPTER 11 MEDICAL HEALTH INSURANCE “Underwriting MHI”

20. Purpose of Underwriting • Process of assessment & selection of risks,determination • of premium, terms & conditions. • The purpose of Underwriting aids in the following • situations: • Anti-Selection • Adequacy of Premium • Risk Selection Process • Medical Underwriting • Financial Factors • Occupational Factors (Class 1,2,3 & 4) • Age & Sex • Sources of Underwriting Information

21. Sources of Underwriting Information Application form Agent’s statement Medical / Paramedical Exams Attending Physician Statements (APS) Hospital Medical records

22. Underwriting Decisions Standard (issued exactly as applied for) Sub-standard / Modified (issued on other-than-applied-for-basis) Declined

23. Underwriting Decisions • Issuing Modified Coverage • Exclusion Endorsements • Extra Premiums (Loading) • Change of Benefits (Modified Benefits) • Renewal provision of Medical & Health Insurance

24. Renewal Provision of Medical & Health Insurance Optional Renewable Policies Guaranteed Renewable Policies Conditional Renewal Non-cancelable Policies

25. Miscellaneous • Payment of Premium • “Cash-before-cover” • 60 days premium warranty • Termination of a policy • Death of an insured • Policy Anniversary immediately following the insured’s maximum eligibility age • Total benefits paid under Policy since last Policy Anniversary exceeds the maximum limit specified in the benefits schedule for the respective Policy Year.

26. Miscellaneous • Free-look period / Cooling-off period • 15 Days • Cancellation of MHI policy “during and after” free-look period

27. CHAPTER 12 MEDICAL HEALTH INSURANCE “Policy Administration”

28. Overview of Policy Administration “Exchanges & issuance of documents to evidence the existence of a valid contract of insurance” • Documents include: • Proposal form • Policy • Endorsement • Renewal Notice • Proof of medical & health insurance premium payment for tax relief Regulated by Section 149 of the Insurance Act 1996

29. Contents of a Proposal Form • Questions of a general nature • Proposer’s Name • Proposer’s Address • Risk Address • Proposer’s Occupation • Previous and Present Insurance • Specific Questions relating to Medical and Health Insurance

30. Structure of a MHI Policy Form Heading The Preamble / Recital Clause The Operative or Insurance Clause Exclusions The Schedule of Benefits Attestation or Signature Clause

31. Structure of a MHI Policy Form • Conditions • Expressed • Implied Conditions Subsequent to Contract Conditions Precedent to Liability • Policy Register • Renewal Notices • Documents for Tax Relief • RM3,000-00 (Education & Medical)

32. Endorsement • Practice of insurers to issue policies in a standard form • covering certain specific perils and excluding others. • Should modifications be intended to the terms and • conditions at time of issuance of policy, one or more • memorandums or endorsements to the policy is attached • as evidence of contract.

33. CHAPTER 13 MEDICAL HEALTH INSURANCE “MHI Claims”

34. Notification of Loss • Between 14 days to 30 days • Furnish all supporting documents to substantiate the • claim • Original hospitalization bill • Claims form

35. Conditions for a Valid Claim Is the policy in force? Has premium been paid? Is the loss caused by an insured peril? Is the subject matter affected by the loss the same as that insured under the policy? Has notice of loss been given without undue delay?

36. Structure of a MHI Claim Forms • Investigation of a claim • Settlement of MHI claims • Repudiation of liability by insurers • Disputes • Liability of Insurer? • Quantum of loss, if insurer is liable? • Negotiation & Compromise Settlement • Litigation • Arbitration • Mediation

37. Thank You