: @MOFmalaysia has announced its B40 health coverage scheme will come into affect 1 Jan. Recipients will be covered up to RM8k for 36 types of critical illnesses. The fund to pay for this scheme will begin at RM2bn. I debated this matter in Parliament. 
Specifically I wanted to find out how the government was paying for this. Would the government be paying certain insurers the premium for the B40 recipients? Turns out the initial RM2bn is a quid pro quo arrangement with Great Eastern, a Singaporean insurer.
Under the 2009 Liberalisation of the Financial Services, there was a 70 per cent cap on foreign insurers owning local insurance businesses in Malaysia. That meant insurers like GE, Tokio Marine, Zurich had to sell off 30 per cent of their Malaysian business to locals.
They found this difficult to do and the regulation wasn’t enforced. Last year, BNM indicated they would enforce the 70 per cent cap. After GE14, a solution was found. GE offered the government RM2bn to waive the regulation. That’s where the fund for the B40 scheme came from.
Now, as per the Hansard, I established from @guanenglim that any other waiver will cost RM2bn also. Since that’s what GE paid. To not disadvantage GE and also expand this scheme to as many B40 as possible, I want to suggest...
that @MOFmalaysia insist on enforcing the 70 per cent cap on other foreign insurers OR ask them to contribute RM2bn to the fund to waive the said regulation. That would be fair to GE who have set the ‘market’ at RM2bn.
The other matter is participation of local insurers. Once foreign insurers are entrenched in underwriting this scheme, they may just continue in the future when the premiums will have to be paid by the government (assuming the RM2bn waiver is a one-off).
How will the government ensure local insurers’ participation in this scheme once the waiver money from foreign insurers is used up or even now at this stage? Who will cover their premiums?
This will be an interesting scheme to monitor especially in its sustainability and implementation (which B40 qualifies, ease of application and use, etc). It’s intent is good and we will give the govt the benefit of the doubt for the moment.
