Lebanon’s insurance sector is highly fragmented, featuring extreme competition between small local players, bank-affiliate insurers, providers that are parts of multinational insurance giants, and—outside of the regulated sphere of commercial insurance companies—even quasi-insurers with competitive privileges that are categorized as mutual funds. The diverse and overpopulated sector, mired in opacity of companies, has not been able to achieve significant consolidation and has, for the last 30 years, rarely been able to find a unified voice that would have enabled to address public concerns and deliver insurance as a public good. Throughout the last few decades, the need for an adequate insurance law has moreover loomed large over the disjointed industry. Frequently faced with greatly diverging opinions from within the insurance sector and having to tear down attitudinal walls of vested interest as part of challenges it encountered, the Insurance Control Commission (ICC) has, since the early 2000s, incrementally implemented increasingly effective financial oversight over the sector and also gradually expanded its advocacy in support of insurance clients. Executive inquired with Nadine Habbal, the—by now long-term—acting head of the ICC about the oversight institution’s perspective on the dilemmas of the COVID-19 pandemic for the insurance sector.
The ICC has published a list on its website of insurance companies that provide coverage for treatment of COVID-19 for all or part of their insured members. Is the list accurate and comprehensive as far as including all details, and what is the meaning of the phrase “all or part of their insured members”?
As listed on the ICC website, a number of insurance companies provide cover for pandemic diseases to their entire portfolio. Some companies decided to waive exclusions on pandemic diseases and cover their policyholders. There are also companies whose health insurance portfolio is divided into two parts: some policies that don’t exclude pandemics and the remaining policies that exclude pandemics. This is the reason why we put a note on our website that they cover part of their members. Finally, some insurers exclude pandemic risks entirely.
When looking at Lebanese insurance companies in terms of their coverage response to COVID-19, what is proportionally the largest group among the categories you mentioned?
The ICC numbers indicate that up to 55 percent of insured members have no exclusions, and are consequently covered for pandemic diseases—I am telling you our estimation. The remaining 45 percent have policies with pandemic exclusions; they do not have coverage.
Is the coverage that you are discussing related specifically to in-hospital treatment of COVID-19 or is testing for the coronavirus also covered by the insurance companies under their health policies?
The coverage may change depending on your policy. Our efforts focus on policyholders that require in-hospital treatment. Testing is covered for policyholders with outpatient coverage and no pandemic exclusion. Our aim primarily is to cover the cases that require treatment, and these are divided into three categories: mild, moderate, and severe (requiring intensive care units).
Did the ICC receive many requests over its hotline for insurance-related inquiries and complaints?
ICC-Care is recording situations related to insured persons requiring in-hospital treatment as a result of COVID-19 and we are resolving such cases based on the stipulations of the respective insurance contracts. Our interventions differ on a case-by-case basis.
Are the phones ringing off the hook, meaning are many cases that need supervisory investigation being brought to your attention simultaneously, or is the situation moderate in terms of number of complaints and inquiries about how the coverage of COVID-19 cases is handled, either from the side of hospitals or the side of insurers?
The situation so far is manageable and we are able to accommodate and resolve all requests. The number of policyholders who require in-hospital treatment is limited; an estimated 80 percent of the cases are either asymptomatic or very mild, and do not require hospitalization. Altogether, and in as far as the insurance sector is concerned, the projected population of insured members who are infected and require in-hospital treatment is not large.
Are you playing a role as mediator in discussions between insurance companies and hospitals?
ICC Care recorded cases where hospitals are not automatically admitting an insured member. We investigated such cases as part of our supervisory role and found out that such insured members were [being] required to make an advance deposit before being admitted. In our opinion, such practices are not fair, because they infringe the policy conditions. Therefore, we entered into discussions with hospitals to understand the reasons for the implementation of such procedures, and to defend the rights of policyholders. When COVID-19 is covered, patients should be treated as if they are admitted for any other disease. We requested that usual admission and treatment procedures should be uniformly applied for COVID-19 patients, as the case is for other services such as for heart surgeries for example. In case hospitals decide, for whatever valid reason, to apply alternative procedures, then the ICC, the insurance companies, and the public in general should be made aware of such alterations.
Our role is to protect the rights of policyholders and the sustainability of the insurance sector, and we acted with this perspective in mind. We engaged in discussions with the private hospitals in order to reach an agreement on fair tariffs that hospitals can charge for COVID-19 treatment, taking into consideration that some of the hospitals undertook investments in order to enhance their capacity to admit and treat COVID-19 patients.
One further note is that hospitals are minimizing admissions of [patients for] non-emergency procedures, and people are tending to postpone non-essential medical treatments. There is a major change in the dynamics of supply and demand of healthcare services.
What is the ICC’s aim in the current time where people are so deeply impacted and concerned with the issue of COVID-19? Do you have updated plans or targets in light of the fact that you previously talked of provision of universal healthcare as a major need and long-term target for Lebanon?
If we had universal healthcare with a primary or basic cover funded by the public sector and a top-up from the private sector, the situation would definitely have been better. The alarming situation that we reached provides strong supporting arguments for the urgency of the reforms needed to establish universal healthcare with a public-private partnership. We cannot postpone tackling this issue any further. Even now, with the recession and all the economic challenges that we are facing, this is the right time, especially as we consider the post COVID-19 period.
During a conference call that I attended with other insurance regulators in the region, there was a consensus that the main concern presently is not about how to fund the cost of healthcare services for COVID-19. The estimated costs are well established and documented, and the estimated incidence in the Middle East is so far largely manageable. The statistics indicate that the direct impact, especially in Lebanon, is much lower than Europe and North America. Nonetheless, we need to worry about what we are going to do post-corona, after the medical emergencies have been dealt with. This is an alarming issue that needs particular attention in Lebanon. What will happen to the people who became unemployed, and the businesses that had to stop or shift to survival mode?
Going back to your question, and as part of our efforts to improve the medical insurance offering in Lebanon, a ministerial decision was issued on April 15 requiring insurance companies to introduce a compulsory pandemic cover in every new or renewed policy. This will enhance the insurance protection for existing and new insured members, and would present a better value proposition that is uniform for all.