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 HEALTH

INSURANCE

“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 Interest

Utmost Good Faith

Proximate cause

Indemnity

Contribution

Subrogation


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 except

in the event of a death claim MHI risk increases with time


‘Cashless’ Hospital Admission • Panel Hospitals

Cost Containment Measures

1. Inner limits

2. Schedule of Surgical Procedures

3. Maximum period of compensation

4. Timeframe during which expenses are paid

5. Co-payment for Upgraded rooms

6. Deductibles

7. Panel of hospitals

Standards of MHI


MEDICAL HEALTH

INSURANCE

“Types of MHI”

CHAPTER 10


Types of Medical & Health Insurance

Individual vs. Group policies

MHI policies comprise of:• Medical Expenses Insurance

a) Hospitalization and Surgical Insurance &/or

b) 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 Insurance

III. 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


Two Common Expense Participation Methods

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

amount

Co-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 treated

Note: 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 Insurance

2. Comprehensive Major Medical Insurance

3. Excess Major Medical Insurance


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


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


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.


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


MEDICAL HEALTH

INSURANCE

“Underwriting MHI”

CHAPTER 11


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


Sources of Underwriting Information

Application form

Agent’s statement

Medical / Paramedical Exams

Attending 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 PoliciesOptional Renewable Policies

Non-cancelable PoliciesNon-cancelable Policies

Conditional RenewalConditional Renewal

Guaranteed Renewable PoliciesGuaranteed 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


MEDICAL HEALTH

INSURANCE

“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 nature

a) Proposer’s Name

b) Proposer’s Address

c) Risk Address

d) Proposer’s Occupation

Previous and Present Insurance

Specific Questions relating to Medical and Health Insurance


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


Structure of a MHI Policy Form

Conditions

- Expressed- Implied

Conditions Subsequent to ContractConditions Precedent to Liability

Policy Register

Renewal Notices

Documents for Tax Relief

- RM3,000-00 (Education & Medical)


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.


MEDICAL HEALTH

INSURANCE

“MHI Claims”

CHAPTER 13


Notification of Loss

Between 14 days to 30 days

Furnish all supporting documents to substantiate the

claim 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 claim

Settlement of MHI claims

Repudiation of liability by insurers

Disputes

1) 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

Documents

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