Medical insurance
now guaranteed for life

Decision expected to boost demand

The Insurance Control Commission (ICC) has decided to enforce the guaranteed renewability of all medical insurance contracts for the entire life of the insured and without any amendments.

The guiding principle behind the decision is that the medical insurance policy cannot be discretionarily amended following a deterioration in the health conditions of the insured, said Nadine El Habbal, Acting Head of the ICC.

Citizens can now be insured for their entire life as they will have a permanent right to renew their medical insurance contracts. The insurance contracts must be renewed in line with the conditions applicable to other insured persons and without any additional exceptions or reductions in benefits, she said.

General and special provisions of medical insurance contracts cannot be altered after the first underwriting of the insured person, with an observation period of six months.

Habbal said that she does not expect the price of medical insurance policies to rise following this decision. “On the contrary, prices may fall as this will boost demand for medical insurance and consequently the cost for insurance companies will drop which will be reflected on the price of insurance policies,” she said. The ICC will also review all medical insurance contracts and the pricing strategies adopted by insurance companies to make sure insurance services are offered at fair and suitable prices.

Minister of Economy and Trade Raed Khoury said the decision is a major step towards expanding medical insurance to all segments of society. This complements the services provided by the Ministry of Public Health and the National Social Security Fund, he said.

The move is part of ICC’s vision to boost written premiums in the insurance sector from $1.5 billion to $3 billion over a five-year horizon.

More than 40 percent of Lebanese do not currently benefit from any kind of medical insurance. About the third of the medical bills are financed by the citizen’s own resources.

Khoury said that this decision will be followed by organizational and regulatory measures to protect policyholders. These measures also aim to provide incentives for the insurance sector to create new products and services and to invest in developing and upgrading its capabilities in line with international and modern standards, he said.

After the implementation of this decision, the insurance sector will have the potential to become one of the main investors in treasury bills and other securities, according to Khoury. Insurance companies, must by law, subscribe to treasury bills for at least half the value of some of their premiums.

The guaranteed renewability of medical insurance contracts is provided only through licensed insurance companies that are under the ICC's supervision.

The decision applies to new and existing policies and will be implemented within one month.