PCE - Part A(2) Medical and Health Insurance

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PCE - Part A(2) Medical and Health

Insurance

• Revision 01 (25/11/2011)


MEDICAL HEALTHINSURANCE

“Introduction”

CHAPTER 9


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


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


Principles Applicable to MHI

Insurable InterestUtmost Good FaithProximate causeIndemnityContributionSubrogation


2 Categories of MHI

Indemnity policies- E.g. Hospitalization and Surgical

Insurance

Benefit Policies- E.g. Critical illness and Disability

income Insurance


Standards of MHI

MHI policies limits• Per disability limit• Overall annual limit• Lifetime limit

Claim payment does not terminate coverage exceptin the event of a death claim MHI risk increases with time


‘Cashless’ Hospital Admission • Panel Hospitals

Cost Containment Measures1. Inner limits2. Schedule of Surgical Procedures3. Maximum period of compensation4. Timeframe during which expenses are paid5. Co-payment for Upgraded rooms6. Deductibles7. Panel of hospitals

Standards of MHI



“Types of MHI”

CHAPTER 10


Types of Medical & Health Insurance

Individual vs. Group policies

MHI policies comprise of:• Medical Expenses Insurancea) Hospitalization and Surgical Insurance &/orb) Major Medical Expenses Insurance • Hospitalization Cash Benefit Insurance• Critical Illness Insurance• Disability Income Insurance


Medical Expense Insurance

Coverage:I. Clinical Insurance (primary care)II. Dental InsuranceIII. Maternity InsurancePayment:

Pay for treatment cost of a disability as stipulated in the policy

Limitation:May impose some form of deductible or co-sharing


Two Common Expense Participation Methods

Deductibles• A fixed amount• A percentage • A combination of percentage & fixed

amountCo-payments


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 treatedNote: Additional benefits can be referred in Pg. 12


Major Medical Expenses Insurance

Coverage:Broad and substantial protection from large and

unpredictable healthcare expenses. May take the following forms:

1. Supplemental Major Medical Insurance2. Comprehensive Major Medical Insurance3. Excess Major Medical Insurance


Hospitalization Cash Benefit Insurance

Coverage:Stand-alone policy / a rider to life insurance / medical

& health insurancePayment:Pays the daily amount stated in contract for each day

insured is hospitalized


Critical Illness Insurance

Coverage:Dread Disease insuranceStand-alone or as a rider to a life policyPayment:Lump sum payment upon diagnosis of a covered

illness specified in contract


Disability Income Insurance

Coverage:Known as Permanent Health InsuranceCommonly sold as a rider attached to a basic lifeInsurance. Payment:Provide periodic payments when insured is unableto work.


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

Section 186 of the Insurance Act 1996



“Underwriting MHI”

CHAPTER 11


Purpose of Underwriting

Process of assessment & selection of risks,determinationof premium, terms & conditions.The purpose of Underwriting aids in the followingsituations:

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


Sources of Underwriting Information

Application formAgent’s statementMedical / Paramedical ExamsAttending Physician Statements (APS)Hospital Medical records


Underwriting Decisions

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


Underwriting Decisions

Issuing Modified Coverage Exclusion Endorsements Extra Premiums (Loading) Change of Benefits (Modified Benefits) Renewal provision of Medical & Health

Insurance


Renewal Provision of Medical & Health Insurance

Optional Renewable Policies

Non-cancelable Policies

Conditional Renewal

Guaranteed Renewable Policies


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.


Miscellaneous

Free-look period / Cooling-off period- 15 Days

Cancellation of MHI policy “during and after” free-look period



“Policy Administration”

CHAPTER 12


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


Contents of a Proposal Form

Questions of a general naturea) Proposer’s Nameb) Proposer’s Addressc) Risk Addressd) Proposer’s Occupation

Previous and Present InsuranceSpecific Questions relating to Medical and Health

Insurance


Structure of a MHI Policy Form

HeadingThe Preamble / Recital ClauseThe Operative or Insurance Clause ExclusionsThe Schedule of BenefitsAttestation or Signature Clause


Structure of a MHI Policy Form

Conditions- Expressed- Implied

Conditions Subsequent to ContractConditions Precedent to Liability

Policy RegisterRenewal NoticesDocuments for Tax Relief - RM3,000-00 (Education & Medical)


Endorsement

Practice of insurers to issue policies in a standard formcovering 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.



“MHI Claims”

CHAPTER 13


Notification of Loss

Between 14 days to 30 daysFurnish all supporting documents to substantiate theclaim

Original hospitalization bill Claims form


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?


Structure of a MHI Claim Forms

Investigation of a claimSettlement of MHI claimsRepudiation of liability by insurersDisputes1) Liability of Insurer?2) Quantum of loss, if insurer is liable? Negotiation & Compromise Settlement Litigation Arbitration Mediation


Thank You

PCE - Part A(2) Medical and Health Insurance

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Transcript of PCE - Part A(2) Medical and Health Insurance