KUALA LUMPUR: Bank Negara Malaysia has assured the public that the new motor cover framework effective Jan 1 next year will ensure greater access to motor insurance cover at reasonable prices, better services and early compensation.
The central bank also said that rules and operations of the Malaysian Motor Insurance Pool (MMIP) were being reviewed to ensure, owners of motor vehicles that were more than 10 years old, were not necessarily deemed as high risk.
This means they would also have greater access to motor cover at a lower premium, Bank Negara said in a statement today, in response to various concerns raised at the Dewan Rakyat yesterday on high insurance premiums and slow claims.
Several Opposition members and government backbenchers had voiced out in unison, against what they called errant insurance companies, which imposed exorbitant third party insurance charges, normally for cars over 10 years old.
They said that this was unfair to the people in the rural areas, many of whom were using old cars while insurance companies took too long, sometimes years, to settle claims.
Describing the new framework as a holistic solution to the issues raised, it also said that claims would be settled within six to 18 months from the present, one to five years.
Bank Negara said that currently, some private vehicle owners have been subjected to high premiums arising from policies purchased from the MMIP, which is the insurer of last resort.
While this has been widely highlighted and reported, it accounts for only about two per cent of the total number of vehicles insured in Malaysia (and) comprises mainly private cars of more than 10 years old, the central bank said.
"For the pure high risk vehicles, access to such cover would be available through the MMIP but subject to the appropriate premium, commensurating with the risk," Bank Negara said.
It also said that a two-pronged strategy has been adopted to enhance efficiency in the provision of motor cover, with a gradual price adjustment that ensures buying motor insurance with affordable premiums.
The tariff that has not been revised for more than 30 years has been a major source of the difficulties faced by the public in recent years.
While the premium has not been adjusted, there has been significant increases in the level of car ownership, accident rate and claims.
Under the new framework, premium adjustments which will take effect from next year, would be small and implemented gradually over a period of four years.
For example, for third party cover, motorcycles of 110 cc will experience a premium increase of between RM1.00 - RM3.50 per year (a maximum of 30 sen per month) over the next four years.
For a private car of 1,400 cc, the premium adjustment will be between RM6.00 - RM34.00 per year (a maximum of RM2.80 per month) over the same period.
For commercial vehicles such as outstation taxis and buses, the impact of the premium adjustment on the passengers would be minimal at less than 10 sen per passenger.
Categories of vehicles such as hire and drive taxis which have a good claims record will benefit from a reduction in premiums or lower quantum of increase.
Bank Negara said that it prohibits insurance companies from compelling policy owners to purchase additional non-motor related cover, such as personal accident policy, when purchasing a motor cover, adding stern action would be taken against such errant companies.
Since 2009, a total of 37 complaints on forced selling were received and action has been taken against the insurance companies, resulting in premiums being refunded to the policy holders.
Members of the public who have difficulty obtaining motor cover or who have been compelled to buy other covers, are advised to contact the Bank Negara Malaysia hotline directly at, TELELINK: 1 300 88 5465