Regulations to Prevent Insurers from Denying Claims on Newer Procedures Not Explicitly Listed in Legacy Policy Wording

Mr Gerald Giam Yean Song asked the Prime Minister and Minister for Finance (a) whether MAS will review medical insurance contracts to ensure that definitions of surgical procedures are updated to include modern, less invasive medical advances; and (b) what regulatory measures are being considered to prevent insurers from denying claims solely because a newer, more effective procedure is not explicitly listed in legacy policy wording.

With constantly advancing medical care, it is natural for policyholders to ask if their existing insurance coverage keeps pace with newer, less invasive procedures.

Let me explain how this works for two broad types of health insurance.

MediShield Life pays for medically necessary treatments and surgical procedures that are listed in the Ministry of Health's (MOH's) Table of Surgical Procedures (TOSP). MOH regularly updates the TOSP to keep MediShield Life relevant and adjusts the premiums where necessary. Integrated Shield Plans generally align with MediShield Life.

Critical illness insurance (CI), works differently. Severe-stage CI policies pay a fixed lump sum when a person is diagnosed with an advanced-stage CI or undergoes a specified major procedure. The Life Insurance Association, Singapore (LIA) regularly updates its standardised severe-stage CI definitions to reflect medical advances. Insurers will adopt LIA's latest definitions when issuing new severe-stage CI policies.

Existing policies, however, do not assume the updated LIA definitions, as the updated severe-stage CI definitions and any associated newer procedures and treatments could widen the scope of policy coverage and increase the incidence of claims. Doing so without a corresponding premium adjustment could impact the sustainability of the product.

LIA is studying the feasibility of allowing policyholders of existing CI policies to adjust their coverage to include newer treatments with appropriate premium adjustments. As there are complex implications on the actuarial assessment, the study will take time.

Meanwhile, I encourage consumers to regularly review the type, coverage and affordability of their health insurance policies in line with their evolving needs. As medical technology evolves, some conditions can now be treated through less invasive procedures with shorter recovery times. For coverage of these treatments, insurers offer comprehensive or early-stage CI plans, which cover a broader range of procedures. The scope of coverage and cost for these products varies amongst insurers. Consumers can seek financial advice to help determine the level of protection that suits their needs and budget.