When your health insurer closes down and wants to cancel your medical insurance policy
In 2022, a few major health and travel insurance providers for expats and well-off locals closed down. Some companies like AIG travel would shy away from the risk of Covid related claims refund. Two major medical insurance for expats, namely Aplus insurance international and Aetna international, are now acquired by April international and Allianz Care respectively. What happens to your coverage and your insurance policy. More importantly, if you passed the waiting period for pregnancy for instance or worse you have a costly existing medical treatment on-going and covered by the insurer? Now the plan needs to be canceled?
Imagine being treated for a costly cancer with 2 years to go and the insurer closes down canceling your policy, who is the insurer who will accept to take you onboard with an existing illness, on-going treatment and the financial risks of foreseeable (at best) medical bills ahead you need to pay for?
If your role was reversed with the insurer and you have a client’s renewable contract with for sure foreseeable medical costs well above the insurance premium you collect: your best financial decision is to cancel the policy.
The medical insurer closes down in a non-regulated country
UK, France, Singapore, Hong Kong are regulated with insurance and financial laws protecting the consumer. Vietnam, Cambodia, Myanmar, Nevis, Labuan are NOT REGULATED by specific insurance laws for long term health costs liability by the policies issued by their registered insurers, the financial authorities.
Any decision by the insurer is kind of final and any lawyer will have à hard time just reaching the court of law, and it is impossible to get any compensation money for a denied claim.
Any cancellation or close down leaves you all future bills to pay till the end of your illness, however chronic or costly it may be.
Guarantee fund for medical insurer
Most expats in this uncomfortable situation of canceled policy, while they relied on the insurer to pay for their medical bills, immediately think about legal action and hire a lawyer. This never works -except for the lawyers getting their fees- for 3 main reasons:
- Lawyers are not interested in suing an insurer protected by their Ministry. For instance, companies like Bao Viet are state-owned companies, regulated by the State ministry of finance. Imagine complaining to the father about his son’s bad behavior. Financially, the penalty the insurer will pay to you will be directly in deduction of what they should pay in profit taxes or dividends to their ministry.
- The cost incurred to fly to Nevis islands or just to understand the insurance regulatory decrees before starting any legal action will deter most claimants
- But most importantly, there are no articles of the law saying that an insurer must maintain your contract when it is losing money, on the contrary.
You are better off getting an insider -like your insurance broker- to extract as much as possible of your situation. Or ‘shout’ on Facebook if you can be heard for more than 3-days.
No guarantee fund then you are out of pocket
Sometimes, there are some specific funds to guarantee or indemnity contracts, when an insurer closes one activity or needs to indemnify. Only professionals in the insurance sector could locate the fund and start à procedure to indemnity to clients.
Note that in most cases, insurers don’t close down, they just cease an activity that is not strategic like health to focus on their core like car or property insurance. What really happens then is there is always an eager and stronger insurer to buy back a portfolio of clients already built over many years or commercial and marketing efforts.
So there is room for negotiation with the new acquirer management team.
Negotiate to get your future medical insurance bills paid
The last recourse an insurance broker or a specialized insurance lawyer could do would be to negotiate astutely so that the insurer reputation is not damaged. The broker has more weight than a lawyer would have, as they act as a wholesaler with à large portfolio of clients and prospects that could be shifted to another insurer.
The insurer acquirer of your insurance are reputable or regulated
Allianz Care buy Aetna health international, both specialized in Expats clients, therefore some duplicate medical insurance products will have to be canceled to uniformize the offer under 1 set for Individuals and 1 for groups. Some clients’ accounts and policies will be canceled or transferred.
In this particular case, Allianz has a strong financial background, they care for their brand reputation but more importantly there is an ombudsman and the UK Financial Services Authority to arbitrage any wrongdoing with existing clients. The FSA holding their business license for a period of time would be catastrophic for the insurer.
A reputable health insurer will offer under CTT ‘continuous transfer terms’
The same goes with A plus insurance International will fold after being purchased by April international, policies will be transferred or canceled: under what conditions, prices and benefits. Will they keep paying for your existing or past illness bills?
What about Groupama Vietnam who failed to find a buyer before closing. Or foreign insurers like AIG international who gave up the medical insurance business in Asean developing countries.
In such a case, when terminating your policy as Aplus health client, April medical insurance will arrange to offer you a take-over policy equivalent in their existing range at ‘no-worse terms’ or CTT Continuous Transfer Terms. The pricing should be fair with the new plans benefits, not applying wild increases because your ‘claims ratio’ is very high.
A transfer of old policy to new insurer range at same health benefits
What if they cancel your benefits to avoid paying health claims bills
Sometimes it can happen that they make a general offer to all clients regardless of specific cases with on-going treatment costs involved. In the hope that most will accept, like asking all to apply to enroll into the new plans they offer attractively to boost the renewal. Then asking to declare your medical history as a new to apply exclusions or load your premium according to the additional risk your state of health justify.
Conclusion: only when you have pre-existing medical condition that you are at risk
If you have pre-existing conditions, you may have to pay on-going treatment over years if your cover is canceled. No other insurer will accept to cover any on-going serious and costly treatment for you.
In this case a lawyer is of little help, because litigation specialists in health claims are rare. Your broker or servicing agent is your best ally, he may help you more effectively with their direct access to the regulatory bodies that insurers fear. Only the financial authority can suspend their business license for a while until your case is sorted out.