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MEDICAL AND HEALTH INSURANCE
In the event of portfolio re-pricing, which is generally applicable for
guaranteed renewable individual PMI policies, it has to be actuarially
certified and the new pricing would be applicable to all policyholders
Within the pool, irrespective of the policyholder having made a claim or
otherwise. Therefore, in the event of an adverse claim, there will be no
premium loading for portfolio pricing guaranteed renewable products, for
each respective claimant. The re-pricing would be done if the pool is no
longer viable to sustain future claims and the new pricing would be
applicable to existing and new prospective policyholders.
However, for yearly renewable products, the respective policyholders will
be subject to premium adjustment or premium loading after an adverse
claim, should the actual loss ratio hit the company's target loss ratio.
On the treatment of an individual PMI policy for any adverse claim
experience, the maximum loading should not exceed 50% of the policy's
premium prior to the claim as set in The Guidelines on Medical and Health
Insurance (MHI) Business (revised) on 1st January 2010 by Bank Negara
Malaysia (BNM/RH/GL/003-30).
In a group PMI policy, normally it would be experience-rated and the
insurer would project the future costs of expected claims to be paid
together with the projected medical inflation, the acquisition costs, and
the desired profit margin to arrive at the group premium loading after an
adverse claim situation.
3.1.3 HOW PREMIUMS ARE CALCULATED
The Guidelines on Medical and Health Insurance (MHI) Business (revised)
on the sales of MHI products came into effect on 1st January 2010 by Bank
Negara Malaysia (BNM/RH/GL/003-30).
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