MEDICAL HEALTH TAKAFUL CLAIMS

Transcription

1 Medical Health Takaful Claims 207 CHAPTER A13 MEDICAL HEALTH TAKAFUL CLAIMS OVERVIEW Chapter A13 will deal with the issues concerning Medical and Health Takaful claims: Notification of Loss Proof of Loss/Claim Checking Coverage Claim Investigation Medical and Health Takaful Claim Forms Repudiation of Liability by Takaful Operator Disputes A13.1 NOTIFICATION OF CLAIMS The reason why people entered into Takaful contract is to be indemnified when a loss occurs. However, once an event of a possible claim occurred, the Takaful Operator cannot start the claim process and indemnify the certificate owner unless and until been notified of the claim. Thus, the notification of a claim is fundamental to the Takaful contract. The two main reasons why the claim notification is important: firstly, the Takaful Operator must be given the opportunity to investigate the claim and, secondly, the Takaful Operator needs to raise a provision for the cost of the claim. Takaful certificate requires the certificate owner to notify the Takaful Operator in writing of any claim within a reasonable period, is usually between 14 days to 30 days. The claimant need to complete the claim form and submit it to Takaful Operator together with all supporting

2 208 Basic Takaful Practices documents such as medical report to substantiate the claim. All these documents are to be provided at the claimant s own expense. Should an insurer require further investigations, such additional cost of investigation would be at the insurer s expense. A13.2 PROOF OF ILLNESS/CLAIM The claimant is required to submit written proof of loss of claim within a time frame as stipulated in the loss provision. In the case of a claim for hospital or medical expenses benefit, affirmative proof of hospital confinement (original hospitalization bill and claim form) must be furnished within a stipulated timeframe of the date of loss. The claimant must first register their claims with the Takaful Operator within the stipulated time frame and submit all their documents for the easy processing of the claim. The documents that are needed for the making claim are as follows: Proof of identification, The copy of the certificate document, The original bills of the hospitals in which the insured was admitted, The discharge certificate from the hospital, and The original investigation reports. Failure to furnish such proof within the time provided shall not invalidate any claim if it can be shown not to have been reasonably possible to furnish such proof and that such proof was furnished as soon as it was reasonably possible. A13.3 MEDICAL HEALTH AND TAKAFUL CLAIM FORM The Medical and Health Takaful is designed to elicit the information needed to determine the Takaful Operator's liability under the certificate. Generally it comprised a claimant's statement and an attending physician statement. Some questions are relatively standard such as:

3 Medical Health Takaful Claims 209 Name Address Date of birth Takaful certificate number and group number Information regarding if the certificate owner is covered under a group plan through his employer Description of the injury or sickness that caused the loss Expect to provide not only the dates of any medical treatments or doctors visits, but also the date of the injury or illness as well as the exact nature. There may be several additional questions or possibly an additional form if an injury is involved because the Takaful Operator will need to determine if the injury is due to another person's negligence. The claimant also needs to provide the authorization permitting any medical provider, physician, or employer to release records or information concerning the insured s medical history or employment status. This is to enable the Takaful Operator to obtain records for a thorough review of the claim. A13.4 CHECKING COVERAGE When a Takaful operator received the claim notification, the claims department will make a preliminary check to see if the claim is valid. 1. The process begins with a determination of whether or not the claim is valid. Among other thing, the claims department may check the following: Is the certificate in force? Has contribution 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 certificate? Has notice of loss been given without undue delay?

4 210 Basic Takaful Practices 2. Claim Form Once the claims department completed the preliminary check and found the claim is valid, a claim form will be given to the claimant. A clear instruction on the procedures and required documents will also be given to the claimant. However, if the preliminary check shows that the claim does not exist, the claim department will inform the claimant and stop the process. 3. Claims Register All claims must be registered into the claim register once it is notified to Takaful operator. Takaful operator must maintain an up-to date register of all Takaful claims as it serves as an official record of claims. Takaful operator cannot remove any of the record from the register as long as they are still liable for the claims. A13.5 CLAIM INVESTIGATION The next part of the Takaful claims process is the investigation. A thorough investigation will be conducted to determine whether Takaful operator as the insurer is liable for the loss. The extent of the investigation will depend on the complexity and size of the claim. The claim investigation process involves the following: 1. The claims department will investigate to determine the following: The loss exists. The loss is caused by a peril insured under the certificate. The loss does not fall within the scope of an exclusion of the certificate. The person making the claim is the rightful claimant.

5 Medical Health Takaful Claims Claims Documentation Claim forms are designed to assist the Takaful operator to gather information relevant to assessing claims. The layout of the claim form may vary depending on the insurance company, but there is some information that must be provided no matter who the carrier is. Participant's name Participan's address Phone number Certificate number Reason for the claim The Takaful operator makes the position very clear by making a remark that the form is issued without prejudice, which means that issuance of the claim form does not mean liability is admitted under the certificate. A13.6 SETTLEMENT OF MEDICAL AND HEALTH TAKAFUL CLAIMS The Takaful claims process ends with settlement. Once the Takaful operator completed the investigation and decided to pay the claim, it will compute the amount payable and issue claim payment to the claimant. A13.7 REPUDIATION OF LIABILITY BY TAKAFUL OPERATOR Takaful operator may be able to repudiate liability on several grounds. These include the following: Non existence of loss as reported. The loss or damage was due to the peril that is not covered under the certificate.

6 212 Basic Takaful Practices The loss or damage within the scope of an exclusion of the certificate. The certificate has been rendered void as a result of a breach in condition. Once the claim is rejected, Takaful operator will notify the claimant by: Issuing letter to the certificate owner informing of the decision. Issuing letter to the Takaful agent, instructing the agent to contact the insured personally and notify the insured of the rejection and explain the reason. A13.8 DISPUTES A small proportion of many claims settled each year by Takaful operator usually end up in disputes. The disputes between claimants and the Takaful operator generally will involve one of the following two issues: The question of whether the Takaful operator is liable; The quantum of loss, if the Takaful operator is liable. When a dispute arises, it may be resolved through the following channels: 1. Negotiation and Compromise Settlement In the event of dispute, normally the first step taken by a Takaful operator is meeting the claimant to settle the dispute through discussion. The Takaful operator representative, normally the staff of claims department will explain the reason for the rejection of the claim.

7 Medical Health Takaful Claims 213 In the case of dispute on the quantum of loss, the representative may try to negotiate for an amicable compromise, which is acceptable to both parties. This kind of settlement will usually result in the Takaful operator paying something more than its interpretation of the facts would warrant and the claimant accepting payment for less than that claimed. 2. Litigation A claimant may take the Takaful operator to court if he is unhappy with the outcome of his discussion/negotiation with the claims department. However, the Takaful operator normally considers litigation as a last resort. The Takaful operator will use other platform such arbitration or Financial Mediation Bureau unless it involves a huge claim or an important point of principle. 3. Arbitration An arbitration clause which provides that all disputes or disputes relating to quantum only will have to be referred for arbitration is normally included in most of general Takaful certificate. Arbitration is a well-established and widely used means to end disputes. It provides parties to a controversy with a choice other than litigation. Unlike litigation, arbitration takes place out of court: the two sides select an impartial third party, known as an arbitrator; agree in advance to comply with the arbitrator's award; and then participate in a hearing at which both sides can present evidence and testimony. The arbitrator's decision is usually final, and courts rarely reexamine it. Mediation The Financial Mediation Bureau (FMB) is an independent body set up to help settle disputes between the customers and their financial services providers regulated by Bank Negara Malaysia.

8 214 Basic Takaful Practices The FMB serves as a centre that provide free, fast, convenient and efficient avenue for the resolution of a broad range of retail consumer complaints. The scope of complaints mediated by FMB includes complaints from individuals, corporate complainants and third party claims (property damages only). For complaints, disputes or claims involving a financial loss, the limit for cases to be mediated by FMB is set as follow: RM200,000 for all motor and fire Takaful classes of business RM100,000 for others. Claims by third party claimants are limited to RM5,000. Award or decision of the FMB is binding on the Takaful operator but not the complainant. Complainants who are not satisfied with FMB s decisions may refer the case to a court of law. The address for FMB is; Financial Mediation Bureau Level 25 Darul Takaful 4 Jln Sultan Sulaiman Kuala Lumpur A13.9 CLAIMS EXAMPLE Fazlina participated in a Medical and Health Takaful plan on February 10, The plan provides an annual limit of RM 100,000 and a lifetime limit of RM 500,000. She also includes the hospital allowance rider of RM200 per day. The plan provisions also stipulate a 10% co-takaful requirement.

9 Medical Health Takaful Claims 215 She was admitted into hospital on August 20, This was the second time she got admitted. She was admitted for the first time on January 2011 with a bill of RM10,000. She was discharged three days later. His total hospital bill amounted to RM 5,500. Firstly, the claims department needs to conduct the preliminary investigation to determine the following: Is the certificate in force? Has contribution been paid? Is the cause of hospitalization included as exclusion in the certificate? Is the subject matter affected by the loss the same as that insured under the certificate? Is the annual and lifetime been breach? If everything is cleared, this particular claim may be considered by the Takaful operator for reimbursement. In most cases, the Takaful operator will not reimburse the full amount as there are items in the bill that are not covered under the certificate. Assuming that, say only RM5,000 out of the RM5,500 hospital bill is considered eligible for reimbursement. Taking into consideration the 10% co-takaful, the reimbursement amount is RM4,500. Fazlina will end up having to pay RM 1,000 out of her own pocket.

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