KUALA LUMPUR: While the government has outlined premium rate adjustments as one of four key strategies to tackle the rising costs of health insurance and takaful premiums, there is a need for clear justification behind these price increases.

The Federation of Malaysian Consumers Associations (Fomca) vice-president Datuk Indrani Thuraisingham said that insurance companies must provide clearer explanations and more transparency, particularly in relation to their payout-to-collection ratios.

"The insurance industry must offer clear explanations, especially if they claim to be incurring losses due to paying out more than they are collecting. If the industry asserts that they are making a loss, they must provide justification. The data behind such claims must be made available," she said when contacted.

Expressing concern about the lack of information disclosed by insurance companies, she said: "There is a significant lack of transparency in the insurance industry. If the government is to accept the industry's claim that they are losing money, where is the evidence to back it up? All insurance companies have access to the necessary data and should be reporting it openly."

In contrast, she added that the motor insurance industry had been more forthcoming with data, openly sharing information about premiums sold and claims settled.

"This has led to questions about why the medical insurance sector, which also collects significant premiums, is not held to similar standards of transparency.

"If health insurance companies can provide the necessary data proving that price increases are warranted, then spreading the hikes over a period of time may be considered reasonable. However, the absence of detailed reports is leading to skepticism about the necessity of such price adjustments," said Indrani.

Earlier, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi said that the government had outlined several measures to address the rising costs of health insurance and takaful premiums, including adjusting premium rates and introducing more affordable options.

He said that these measures were discussed during the National Cost of Living Action Council (Naccol) Executive Committee Meeting held earlier today.

Zahid outlined four key steps to ease the financial burden on policyholders: adjusting premium rates, postponing premium increases, reactivating certain policies, and offering alternative products.

"The reform of the national health sector must also be expedited over three years, from 2024 to 2026," he said in a statement.

Meanwhile, Indrani said that Fomca had called for the establishment of a joint action council on healthcare under the purview of the Prime Minister's Office to oversee and regulate private hospital service charges.

"The proposed joint action council should comprise representatives from the Health Ministry, Finance Ministry, and the Domestic Trade and Cost of Living Ministry, alongside experts from consumer associations and patient groups.

"It should also include professionals from the industry, such as actuaries, who must collaborate to provide oversight and ensure that healthcare remains accessible to all Malaysians and free from excessive pricing."

Indrani said this was one of the measures proposed by Fomca in its memorandum to Parliament, which was submitted during a closed-door session with the Public Accounts Committee (PAC) held recently.