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PCE - Part A(2) Medical and Health Insurance
Revision 01 (25/11/2011)
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CHAPTER 9 MEDICAL HEALTH INSURANCE “Introduction”
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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
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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
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Principles Applicable to MHI
Insurable Interest Utmost Good Faith Proximate cause Indemnity Contribution Subrogation
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2 Categories of MHI Indemnity policies
E.g. Hospitalization and Surgical Insurance Benefit Policies E.g. Critical illness and Disability income Insurance
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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
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Standards of MHI ‘Cashless’ Hospital Admission Panel Hospitals
Cost Containment Measures Inner limits Schedule of Surgical Procedures Maximum period of compensation Timeframe during which expenses are paid Co-payment for Upgraded rooms Deductibles Panel of hospitals
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CHAPTER 10 MEDICAL HEALTH INSURANCE “Types of MHI”
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Types of Medical & Health Insurance
Individual vs. Group policies MHI policies comprise of: Medical Expenses Insurance Hospitalization and Surgical Insurance &/or Major Medical Expenses Insurance Hospitalization Cash Benefit Insurance Critical Illness Insurance Disability Income Insurance
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Medical Expense Insurance
Coverage: Clinical Insurance (primary care) Dental Insurance 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
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Two Common Expense Participation Methods
Deductibles A fixed amount A percentage A combination of percentage & fixed amount Co-payments
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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
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Major Medical Expenses Insurance
Coverage: Broad and substantial protection from large and unpredictable healthcare expenses. May take the following forms: Supplemental Major Medical Insurance Comprehensive Major Medical Insurance Excess Major Medical Insurance
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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
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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
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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.
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Section 186 of the Insurance Act 1996
Individual Policies Name of the licensed insurer Relationship with the licensed insurer Premium charged by the licensed insurer Group Policies Conditions of the group policy & remuneration payable to him
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CHAPTER 11 MEDICAL HEALTH INSURANCE “Underwriting MHI”
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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
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Sources of Underwriting Information
Application form Agent’s statement Medical / Paramedical Exams Attending Physician Statements (APS) Hospital Medical records
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Underwriting Decisions
Standard (issued exactly as applied for) Sub-standard / Modified (issued on other-than-applied-for-basis) Declined
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Underwriting Decisions
Issuing Modified Coverage Exclusion Endorsements Extra Premiums (Loading) Change of Benefits (Modified Benefits) Renewal provision of Medical & Health Insurance
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Optional Renewable Policies
Renewal Provision of Medical & Health Insurance Optional Renewable Policies Guaranteed Renewable Policies Conditional Renewal Non-cancelable Policies
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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.
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Miscellaneous Free-look period / Cooling-off period 15 Days
Cancellation of MHI policy “during and after” free-look period
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CHAPTER 12 MEDICAL HEALTH INSURANCE “Policy Administration”
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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
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Contents of a Proposal Form
Questions of a general nature Proposer’s Name Proposer’s Address Risk Address Proposer’s Occupation Previous and Present Insurance Specific Questions relating to Medical and Health Insurance
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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
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Structure of a MHI Policy Form
Conditions Expressed Implied Conditions Subsequent to Contract Conditions Precedent to Liability Policy Register Renewal Notices Documents for Tax Relief RM3, (Education & Medical)
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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.
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CHAPTER 13 MEDICAL HEALTH INSURANCE “MHI Claims”
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Notification of Loss Between 14 days to 30 days
Furnish all supporting documents to substantiate the claim Original hospitalization bill Claims form
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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?
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Structure of a MHI Claim Forms
Investigation of a claim Settlement of MHI claims Repudiation of liability by insurers Disputes Liability of Insurer? Quantum of loss, if insurer is liable? Negotiation & Compromise Settlement Litigation Arbitration Mediation
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Thank You
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