Can insurers cancel health policies due to prior claims?

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Insurers Cannot Arbitrarily Cancel Health Policies Due to Prior Claims

Insurance and takaful operators (ITOs) are prohibited from unilaterally terminating or refusing to renew coverage solely because a policyholder has made a claim or experienced health issues after securing the policy. This is in line with Bank Negara Malaysia's (BNM) Medical and Health Insurance and Takaful (MHIT) Business Policy Document, which mandates fair claim review and management according to contractual terms.
Claim Approval Rates Remain High

Industry data for 2025 indicates that ITOs maintained an average claim approval rate exceeding 90 per cent. This translates to consistently approving more than one million claims annually across the industry, demonstrating a generally favourable outcome for policyholders submitting claims.
Protection Against Unilateral Policy Changes

Deputy Finance Minister Liew Chin Tong clarified in the Dewan Rakyat that ITOs are not permitted to arbitrarily cancel a policy or takaful certificate on their own accord. This protection extends to situations where policyholders have already made claims or developed health complications post-coverage.
Fair Claim Review Process

The BNM's MHIT policy document requires ITOs to review and manage claims equitably, ensuring that approved claims are within the scope of coverage and medically necessary. This review process is guided by standard treatment protocols aligned with clinical practice guidelines, including those issued by the Ministry of Health.
Pre-Treatment Claim Verification

To safeguard policyholders from unexpected financial burdens, the claim review is typically conducted before treatment commences in most hospitals. This proactive approach ensures that policyholders are not held responsible for costs that have not been approved by the insurer or takaful operator.

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Can insurers cancel health policies due to prior claims?

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