Malaysia Weighs ‘No Look Back’ Rule to Curb Rejected Medical Insurance Claims

Global insurance news: Malaysia is considering a new consumer protection rule that would prevent insurers and takaful operators from rejecting medical insurance claims because of medical conditions policyholders unintentionally failed to disclose when purchasing coverage.

Deputy Finance Minister Liew Chin Tong told Parliament on Monday that Bank Negara Malaysia is evaluating a “no look back” policy as part of broader efforts to strengthen safeguards for holders of medical and health insurance and takaful policies.

The proposal comes amid growing scrutiny of claim disputes and disclosure requirements in Malaysia’s health insurance market.

Liew said policyholders who believe their claims have been unfairly rejected should first seek a resolution with their insurer or takaful operator. If the dispute remains unresolved, consumers can escalate complaints through BNM LINK before approaching the Financial Markets Ombudsman Service, which provides dispute resolution at no cost.

According to industry data cited by Liew, insurers and takaful operators paid more than 90% of medical insurance claims on average in 2025, collectively approving more than one million claims during the year.

He also reiterated that insurers must comply with Bank Negara’s policy documents governing medical and health insurance and takaful products. Under existing rules, insurers cannot cancel or refuse to renew coverage simply because a policyholder has made a claim or developed a medical condition after the policy was issued.

Insurers are, however, required to assess claims in accordance with policy terms while ensuring decisions are made fairly and within the scope of the contracted medical coverage, he said.

Liew added that claim-related issues are also being addressed through the Healthcare Partners Protocol & Solutions Committee, a multi-stakeholder body led by the government that includes representatives from the medical industry, insurers, takaful operators and Bank Negara.

The deputy minister was responding to a parliamentary question from lawmaker Tan Kok Wai, who sought details on measures to better protect policyholders, particularly those with critical illnesses and cancer, from arbitrary policy cancellations, retrospective claim denials and unclear disclosure requirements.

Liew said insurance policies are generally terminated because policyholders stop paying premiums or because fraudulent activity is detected, rather than through unilateral action by insurers. He added that unresolved cases can ultimately be referred to the Finance Ministry after consumers have exhausted the available dispute resolution channels.