Bank Negara Malaysia has mandated insurance companies and takaful operators to conduct thorough and impartial investigations into all consumer claims. This directive aims to ensure equitable treatment for consumers and to prevent insurance entities from using exclusion clauses unjustly to deny valid claims.
Deputy Finance Minister Lim Hui Ying emphasized that insurers and takaful operators must ensure that the settlement offered to consumers is fair, considering all relevant factors and upholding the claimants’ reasonable rights as stipulated in the insurance policy or takaful certificate.
“In the event of a partial or complete rejection of an insurance claim, insurers or takaful operators are required to provide a clear explanation to the claimant, detailing the rationale behind the decision, including any policy provisions or exceptions invoked,” she said.
Lim highlighted Bank Negara Malaysia’s guidelines on product transparency and disclosure, which emphasize the importance of disclosing key information such as policy terms, penalties, early termination clauses, and consumer rights and obligations. These measures aim to enhance consumers’ understanding of insurance products or takaful certificates.
Regarding exclusion clauses, Lim explained that these clauses outline conditions not covered by a policy, depending on its type. For instance, common exclusions in motor insurance include driving under influence, illegal vehicle use, self-harm, undisclosed pre-existing illnesses, or fraudulent insurance claims.
“Under such circumstances, insurers or takaful operators are not obligated to fulfill claims related to the excluded event or situation. However, consumers can obtain additional coverage for such events, albeit with added premiums, such as coverage for natural disasters (Special Perils) or pre-existing conditions,” she clarified.
Lim assured consumers that avenues for complaint exist, including channels provided by insurers or through Bank Negara Malaysia’s elink system. Additionally, consumers dissatisfied with their insurance claim rejections based on exclusion clauses can seek recourse through the independent Ombudsman for Financial Services (OFS), which facilitates fair and expedient dispute resolution.
Bank Negara Malaysia will continue to monitor the industry to detect fraudulent insurance entities or products that deviate from prescribed terms and conditions.
