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Impact marginal, says Bank Negara

Monday, 09 January 2012 08:48am

©The Sun Daily (Used by permission)
by KANG SIEW LI

KUALA LUMPUR: The increase in motor insurance premiums when it comes into effect on Jan 16 will be small, gradual and its impact on the public and businesses marginal, Bank Negara said.

The premiums are being revised after more than 30 years, the central bank said in announcing the new rates on Friday.

The move follows persistent calls by general insurers to raise motor premiums since the last revision in 1978, citing higher motor claim sums, the surging number of vehicle thefts and rising cost of vehicle repairs.

Bank Negara said, however, that there will be no revision in the current permissible loading of up to 150% applicable to high risk vehicles.

Rates will level off in 2016, the bank said, as the New Motor Cover Framework paves the way for a de-tariff of motor insurance premiums, in which premium rates will be further differentiated in accordance with the risk profile of individual vehicles and be fairer to vehicle owners as those with a good claims history would enjoy better premium rates than those with a higher risk profile.

Bank Negara assistant governor Abu Hassan Alshari Yahaya said the framework, announced on March 11 last year, also aims to improve the claims settlement process.

“We have identified 11 measures to reduce the average claims settlement period from the present one to five years, to six to 18 months moving forward. To date, five enhancement measures have been implemented, which have seen the average claims settlement period reduced to about 400 days or 15 months,” he said.

The remaining measures to be implemented include the introduction of a motor insurance claims kit to expedite notification of an accident and claims, and the establishment of a nationwide 24-hour call centre to provide immediate roadside assistance to accident victims in the first quarter of 2012.

“We are also working with the Attorney-General’s Chambers and the Bar Council to review the legal fees in bodily injury cases. We hope to complete and implement all measures by June,” Abu Hassan said.

The public can contact Bank Negara at Telelink: 1-300-88-5465 or visit www.insuranceinfo.com.my for queries relating to the framework.

A calculator to permutate the new insurance premiums will be made available on the website by the end of the month. Enquiries can also be forwarded to either the General Insurance Association of Malaysia or individual insurers.

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