Sunday, January 15, 2012

Malaysian insurance regulator revises motor premiums for first time in 30 years, effective from 16th January 2012.

As part of the new motor cover framework for addressing the structural issues within the motor insurance sector, Bank Negara Malaysia has announced measures it hopes will improve the claims settlement process and the implementation of gradual premium adjustments.

These were first unveiled in March last year.
In a statement it said: "In ensuring that the public has access to motor insurance at reasonable premiums, several immediate measures were introduced in May 2011.
"Among the measures undertaken include ensuring that the public would be able to obtain motor cover from the Malaysian Motor Insurance Pool from any general insurer or their branches as well as from any Pos Malaysia branch nationwide."
To ensure the successful implementation of the identified improvement measures under the framework, a joint working committee was established in April 2011, comprising representatives from key Government ministries, the insurance and takaful industry, consumer and transport groups as well as the Malaysian Bar Council.
Bank Negara claims several enhancement measures already implemented have resulted in enhanced efficiency of the claims settlement process, with faster turnaround time for claims on personal injury, especially for cases that were settled via court mediation.
Further measures to enhance efficiency include the referrals to the compendium of personal injury awards by judges in awarding compensation for personal injury as well as the enforcement of timelines for obtaining police and medical reports.
Other measures for the implementation of further efficiency enhancements include the introduction of a motor insurance claims kit to expedite notification of an accident and claims as well as the establishment of a nationwide 24-hour call centre to provide immediate roadside assistance to accident victims in the first quarter of 2012.
As part of the framework, the gradual revision in the motor tariff premium rates will be implemented effective from 16 January 2012. It will be the first to be undertaken after non-revision for more than 30 years.
Over the duration, the levels of car ownership, accident rate and claims in Malaysia have risen significantly. In addition, hospitalization costs, medical expenses and costs of vehicle repairs and spare parts have also increased, Bank Negara said.
"The premium adjustment is in small quantum and to be implemented gradually over a period of four years. The implication on the members of the public and businesses will be marginal," it added in a statement.
"For example, in respect of third party cover, motorcycles of 110 cc will experience a premium increase of between RM1.00 - RM3.50 per year only (a maximum of 30 sen per month) over the next four years.
"For a private car of 1400 cc, the premium adjustment will be between RM6.00 - RM34.00 (£1.20 - £7) 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 per trip."
Bank Negara has insisted the adjustment in the motor tariff premium rates will be reviewed periodically to ensure that the adjusted premium rates continue to be reflective of the claims experience.
The framework will also pave the way for de-tariffing of the motor insurance premiums in 2016, in which premium rates will be further differentiated in accordance to the risk profile of individual vehicles and fairer to vehicle owners as those with good claims experience would enjoy much better premium rates than those with higher risk profile.
"To ensure that members of the public are aware and able to benefit from the framework, particularly on the enhancements to the motor claims settlement process, Bank Negara Malaysia and the insurance industry will continue to provide information to the public on motor insurance issues through the consumer awareness and outreach programs that are currently in place," Bank Negara concluded.
Bank Negara was established on 26 January 1959 under the Central Bank of Malaysia Act 1958 (CBA 1958). The CBA 1958 has been repealed by the Central Bank of Malaysia Act 2009 which became effective on 25 November 2009.
It is a statutory body wholly owned by the Government of Malaysia with the paid-up capital progressively increased, currently at RM100 million. The Bank reports to the Minister of Finance, Malaysia and keeps the Minister informed of matters pertaining to monetary and financial sector policies.


Premium Differences (Extra Premium per vehicle) between existing & new Motor Tariff 2012 (similarly applicable for Comprehensive, third party fire & theft and third party insurance)


Private Vehicles
Cubic Capacity Not Exceeding West MalaysiaEast Malaysia
1400                      12.15                         6.00
1650                      13.50                         6.90
2200                      15.30                         7.80
3050                      17.10                         8.40
4100                      18.45                         9.30
4250                      19.80                         9.90
4400                      21.60                      10.80
Over 4400                      22.95                      11.40
Motor Cycles
Cubic Capacity Not Exceeding West MalaysiaEast Malaysia
50                         1.20                         0.80
100                         1.40                         0.80
125                         1.60                         0.80
225                         2.00                         0.85
350                         2.50                         1.25
500                         2.90                         1.45
Over 500                         3.20                         1.60
Public Taxis 
Cubic Capacity Not Exceeding West MalaysiaEast Malaysia
1400                      23.40 11.7
1650                      27.00 13.5
2200                      30.60 15.3
3050                      34.20 17.1
4100                      37.80 18.9
4250                      39.60 19.8
4400                      43.20 21.6
Over 4400                      46.80 23.4
Hire Cars – Chauffeur Driven
Cubic Capacity Not Exceeding West MalaysiaEast Malaysia
1400                      35.45                      17.75
1650                      40.95                      20.45
2200                      46.40                      23.20
3050                      51.85                      25.90
4100                      57.30                      28.65
4250                      60.05                      30.00
4400                      65.50                      32.75
Over 4400                      70.95                      35.50
Goods Vehicle – C Permit
Carrying Capacity Not Exceeding West MalaysiaEast Malaysia
500 KG                      18.60                         9.30
1000 KG                      22.30                      11.15
1500 KG                      24.15                      12.10
2000 KG                      26.00                      13.00
3000 KG                      27.90                      13.95
4000 KG                      29.75                      14.85
5000 KG                      33.45                      16.70
6000 KG                      33.45                      16.70
7000 KG                      35.30                      17.65
8000 KG                      35.30                      17.65
9000 KG                      37.20                      18.60
10000 KG                      37.20                      18.60
Goods Vehicle – A Permit
Carrying Capacity Not Exceeding West MalaysiaEast Malaysia
500 KG                      28.05                      14.00
1000 KG                      37.40                      18.70
1500 KG                      39.75                      19.90
2000 KG                      42.10                      21.05
3000 KG                      46.80                      23.40
4000 KG                      49.10                      24.55
5000 KG                      53.80                      26.90
6000 KG                      56.15                      28.05
7000 KG                      58.50                      29.25
8000 KG                      60.80                      30.40
9000 KG                      63.15                      31.60
10000 KG                      65.50                      32.75
Buses – Express
Passenger Carrying CapacityWest MalaysiaEast Malaysia
8                      55.40                      27.70
9                      58.90                      29.45
10                      62.35                      31.15
11                      65.80                      32.90
12                      69.30                      34.65
13                      72.75                      36.35
14                      76.20                      38.10
15                      79.65                      39.80
16                      83.15                      41.55
17                      86.60                      43.30
18                      90.05                      45.00
19                      93.55                      46.75
20                      97.00                      48.50
21                    100.45                      50.20
22                    103.95                      51.95
23                    107.30                      53.70
24                    110.85                      55.40
25                    114.30                      57.15
26                    117.80                      58.90
27                    121.25                      60.60
28                    124.70                      62.35
29                    128.20                      64.10
30                    131.65                      65.80
31                    135.10                      67.55
32                    138.60                      69.30
33                    142.05                      71.00
34                    145.50                      72.75
35                    148.95                      74.45
36                    152.45                      76.20
37                    155.90                      77.95
38                    159.35                      79.65
39                    162.85                      81.40
40                    166.30                      83.15
Status quo
(1) Hire Cars – Hirer Driving
(2) Motor Trade
(3) Public Bus
(4) Private Bus
(5) School Bus
(6) Special Type
(7) Motor Cycle Trade





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