Key takeaways
- FMOS, the Financial Markets Ombudsman Service, is free and accepts insurance and takaful disputes in Malaysia of up to RM250,000, with no minimum amount and no need for a lawyer.
- You must complain to the insurer in writing first, then file with FMOS within 6 months of receiving its final decision, or after 60 days if it has not responded.
- FMOS registered 1,044 insurance and takaful disputes in 2025, up 31% from 799 in 2024, and 380 of them were for RM5,000 or less.
- FMOS cannot review premium pricing, underwriting decisions, surrender value calculations, third-party injury or death claims, or disputes already filed in court.
- Under Schedule 9 of the Financial Services Act 2013, the insurer must prove a misstatement was deliberate or reckless; a careless one is judged by what it would have done, from reducing the claim to voiding the policy with premiums refunded.
- If you accept the Ombudsman's decision it binds you and the insurer; if you reject it there is no appeal inside FMOS, but you can still go to court or arbitration.
What is FMOS, and can it help with my rejected claim?
FMOS is the Financial Markets Ombudsman Service, Malaysia's free dispute service for financial consumers and investors. It began on 1 January 2025, when Bank Negara Malaysia (BNM) and the Securities Commission consolidated two older bodies, including the Ombudsman for Financial Services. If an old letter or website mentions OFS, that is its predecessor (FMOS FAQ).
You can file if you hold or held the policy for personal or household use, or for a micro or small business. A person insured under a group policy who pays the premium, and a third party claiming for motor property damage, can also file. There is no minimum amount and you do not need a lawyer. Foreigners and people living overseas can use it too, as long as the product came from an FMOS member, which is useful for MM2H participants.
| FMOS can look at | FMOS cannot look at |
|---|---|
| Life, medical, motor, travel and other non-motor insurance or takaful claims, up to RM250,000 | Claims above RM250,000, unless you and the insurer agree in writing to refer them |
| Motor third-party property damage, also up to RM250,000 (the old limit was RM10,000) | Claims arising from third-party bodily injury or death |
| How policy wording was applied, such as exclusions or "medically necessary" | Premium pricing, fees, product features and underwriting decisions |
| Alleged non-disclosure, misrepresentation or mis-selling by the insurer | Surrender values, paid-up values, automatic premium loan interest and bonus rates, unless the payment is guaranteed in the policy |
| Disputes filed within 6 months of the insurer's final decision | Disputes already in court or arbitration, filed after 6 months without an extension, or past the legal limitation period |
| Disputes about what the insurer told you when selling an investment-linked plan | Fund performance, and payment of life or personal accident policy money made under Schedule 10 of the Financial Services Act |
Sources: FMOS scope, FAQ and Annual Report 2025.
Small claims are welcome. This is how the 1,044 insurance and takaful disputes registered in 2025 were spread by amount, adding conventional and takaful together:
| Disputed amount | Cases in 2025 |
|---|---|
| RM5,000 and below | 380 |
| RM5,001 to RM10,000 | 160 |
| RM10,001 to RM25,000 | 139 |
| RM25,001 to RM50,000 | 133 |
| RM50,001 to RM100,000 | 116 |
| RM100,001 to RM250,000 | 102 |
| Above RM250,000 | 14 |
People searching "Ombudsman Malaysia" may also find a different body. The Edge reported in August 2025 that it is a new agency planned for public complaints and government misconduct. For a rejected insurance claim, FMOS is the one you want.
Why do insurance claims get rejected in Malaysia?
Most claims are paid. The Deputy Finance Minister told Parliament in July 2026 that the industry's average approval rate was over 90% in 2025, with more than one million claims approved a year. That is little comfort when yours is in the other group, so the useful question is which reason the insurer is relying on.
FMOS says most rejections it sees fall into four groups. Find yours, then read the exact clause in your policy.
| Reason given | Examples from FMOS | What to check |
|---|---|---|
| Exclusion or limitation | Cosmetic or experimental treatment; admission mainly for investigation; treatment judged not medically necessary | The exact exclusion wording. Ask your doctor to explain in writing why the treatment or admission was needed. |
| Breach of policy conditions | Unlicensed or unauthorised driver; elective procedure without a required guarantee letter; house left empty beyond the allowed period; reporting late when the policy says 14 days | The condition itself, and your dates. Late notice is a recurring dispute, so check what your own policy requires. |
| Non-disclosure or misrepresentation | A recurring cough or old back pain left out of the application | The questions on your signed proposal form, word by word. See the next section. |
| No reasonable precautions | Engine left running with keys inside; luggage left unattended | The adjuster's report and whether the facts in it are correct. |
Published FMOS cases show it can go either way:
- Partly reversed. An insurer declined a full 11-day hospital stay for heart failure, saying it could have been outpatient care. After the case manager's review, it agreed to pay the first five days and assess related pre- and post-hospital benefits (FMOS case).
- Reversed. An insurer refused immunotherapy for advanced cancer because the clause named radiotherapy and chemotherapy. The Ombudsman found the wording ambiguous, read it in the policyholder's favour and decided the insurer should cover it (FMOS case).
- Upheld. A driver near Shah Alam saw floodwater ahead, drove in without checking the depth and kept driving after the engine stalled. The Ombudsman upheld the takaful operator's rejection (FMOS case).
If your hospital's guarantee letter (GL) was refused, ask the insurer whether that is a final rejection of the claim or only a refusal to pay the hospital directly, and whether you can submit the bills afterwards. For a motor claim, see my car accident claims guide for the steps before any dispute.
Non-disclosure: can the insurer really void my policy?
This is the rejection I often see families most shocked by, because they never thought a small symptom counted. FMOS reports that allegations of material non-disclosure are among the main causes of insurance and takaful disputes.
The law gives you more to work with than many people realise. Under Schedule 9 of the Financial Services Act 2013, the result for a consumer insurance contract depends on what kind of misstatement it was:
| Situation | What the insurer may do |
|---|---|
| Deliberate or reckless: you knew it was untrue or misleading, or did not care | Avoid the contract and refuse all claims. The insurer must show this on a balance of probability. |
| Careless or innocent, and the insurer would not have covered you on any terms | Avoid the contract and refuse all claims, but it must return the premiums you paid |
| Careless or innocent, and the insurer would have covered you on different terms | Treat the contract as if it had been made on those terms |
| Careless or innocent, and the insurer would have charged a higher premium | Reduce the claim proportionately |
| A life insurance contract in force for more than two years | It cannot avoid the contract over an inaccurate statement unless it shows the statement was material and fraudulent |
That last rule is written for life insurance contracts, so do not assume it covers every medical plan. Ask the insurer which paragraph it is relying on.
How clear and specific the insurer's questions were, and how the policy was sold, may be taken into account. If you gave an incomplete answer and the insurer did not follow it up, your duty on that answer is treated as waived. The other side of this: the law presumes you knew a matter was relevant if the insurer asked a clear and specific question about it. So ask for a copy of your signed proposal form and compare exactly what was asked with what you answered.
It can still go against you. In one published case, a policyholder answered no to questions about investigations and abnormal results, two days after a CT scan had shown kidney stones. The case manager treated this as deliberate or reckless and upheld the insurer voiding the policy.
You may have heard of "no look back". The Star reported in July 2026 that BNM was considering such a policy, to stop rejections over conditions people unintentionally failed to disclose. CodeBlue reported in October 2026 the Galen Centre's chief executive citing a no-look-back feature in the MediAsas base plan, but only after seven continuous years of premiums. Neither helps a claim that has already been rejected on an existing policy, so do not rely on them today.
How do I appeal a rejected insurance claim?
- Get the reason in writing. BNM's fair treatment document lists explaining the reasons for a declined claim as good practice. Ask which clause the insurer relied on.
- Collect your papers. Policy schedule and contract, signed proposal form, rejection letter, reports, bills, and every letter or email.
- Send the insurer a formal written complaint. Telling your agent alone is not enough. State the policy number, what happened, why you disagree and the amount you want paid, and keep proof of the date. If your agent has disappeared, see what to do when your agent left.
- Wait for the final decision. It must be in writing, say it is the final decision and tell you FMOS is available. If there is no response within 60 days of your complaint, you can go to FMOS without it.
- BNMLINK is an extra channel. The Deputy Finance Minister named it too: 1-300-88-5465, weekdays 9am to 5pm, or the eLINK form. FMOS's own filing page only requires the complaint to the insurer first.
- File with FMOS within 6 months. Use the online complaint portal, or go in person to its office on Jalan Sultan Sulaiman, Kuala Lumpur. The general line is +603-2272 2811, 8.30am to 5.30pm on weekdays.
Documents FMOS asks for on insurance disputes: the final decision or a copy of your first complaint, the completed FMOS dispute form, your MyKad or passport copy and the policy schedule and contract. Add a dated summary of events, correspondence, and any medical reports, police reports, adjuster's report, driving licence, vehicle registration card and hospital bills that apply. If you act for a family member, you also need a letter of authorisation and your own ID. You can consult FMOS first and submit documents later.
If your general insurance claim is still being processed, BNM's claim settlement rules set these times for insurers:
| Step | Motor | Non-motor |
|---|---|---|
| Acknowledge your claim in writing, from notification | 3 working days | 7 working days |
| Assign an adjuster or in-house assessor, from complete documents | 5 working days | 5 working days |
| Pay, from your acceptance of the offer and all documents | 7 working days | 14 working days |
BNM describes these standards as covering general insurance and general takaful, so do not assume the same figures apply to a life policy or medical rider.
What happens after I file with FMOS, and how long does it take?
FMOS aims to resolve a dispute within 3 to 6 months of receiving complete documents, longer if it is complex. For insurance and takaful in 2025, 44% of closed disputes were closed within six months of registration, so plan for it to take a while.
| Stage | What happens | Time limit |
|---|---|---|
| Vetting | FMOS checks the dispute is within its scope and registers it | 14 days from complete documents from both parties |
| Case management | A case manager works towards settlement through mediation, negotiation or conciliation | 3 months from complete documents |
| Recommendation | If there is no settlement, the case manager gives a written recommendation | Within 30 days |
| Your reply | Accept it, or refer the matter to the Ombudsman. If you do not respond, it is treated as not referred | 30 days |
| Adjudication | The Ombudsman reviews it independently and issues a final decision | 14 days from complete documents from both parties |
| Payment | The insurer must comply once told you accepted | 14 days |
Worked example of the deadlines. The dates below are made up, only to show how the clocks run:
| Example date | What happens | What it means |
|---|---|---|
| 3 March 2026 | Insurer's letter rejects the claim | You disagree, so you prepare a complaint |
| 10 March 2026 | You send a formal written complaint | The 60-day clock starts |
| 20 April 2026 (if the insurer replies) | You receive the final decision | The 6-month clock starts |
| 9 May 2026 (if the insurer stays silent) | Day 60 with no response | You may go to FMOS without a final decision |
| 20 October 2026 | Last day to file, if the final decision came on 20 April | After this, the dispute falls outside scope unless FMOS grants an extension |
Be realistic about the odds. Of the 794 insurance and takaful disputes closed in 2025, about 27% ended in an amicable settlement and 66 in a recommendation both sides accepted. Another 222 closed because the complainant did not respond after the recommendation, so do not let that 30 days pass quietly. Of the 200 that reached adjudication, the Ombudsman upheld the insurer in 175, revised the decision in 12, and 13 settled. These figures do not show how much each settlement paid. What they do show is that the evidence you prepare early matters most.
If you accept the Ombudsman's decision, you sign a settlement and it binds both sides. If you reject it, there is no appeal inside FMOS, but you can still pursue court or arbitration. The insurer cannot withdraw from the process; you can, in writing, at any time.
What should I do next if my claim was rejected?
Three things are worth doing this week:
- Mark your deadline. Write the date on the insurer's letter, and count six months from a final decision.
- Ask for your papers. Request the reason in writing and a copy of your signed proposal form.
- Write your timeline. Dates of symptoms, doctor visits, the claim and each call, while you still remember them.
If the letter is hard to follow, send it to me. My free policy review covers policies from other insurers too, and most new clients reach me through existing clients, including people who first came with a question about a policy bought elsewhere. I have helped clients with about 110 claims, and I serve Kuala Lumpur and Selangor in Mandarin, English or Cantonese.
I should be plain about my limits. I am an insurance agent, not a lawyer, I do not decide claims and I cannot promise an outcome. What I can do is explain what the letter says, whether the clause seems to fit your facts, whether FMOS is the right route and what is missing from your papers. FMOS generally does not allow third parties in its mediation sessions, with exceptions such as an elderly complainant who needs help, so I would help you prepare rather than speak for you.
For your next policy, FMOS's own advice is simple: use the 15-day free look period to read the terms, and if you are unsure whether to declare a past symptom or visit, declare it.
No hard selling. WhatsApp me at 016-914 0086, and please do not send your MyKad number or medical reports in the first message.
This guide is general information, not legal advice. For a large claim or one close to a legal time limit, speak to a lawyer.