The Consumers Association Of Subang and Shah Alam, Selangor (CASSA) notes that Bank Negara Malaysia (â€œBNMâ€) plans to introduce a new motor insurance scheme.
CASSA understands that BNM has formed working committees in relation to the proposed scheme since November last year with the intention of implementing the scheme in the second half of 2010.
The second half of 2010 is just 3 months away.
YAB Datoâ€™ Seri and Prime Minister Sir, it is our humble contention that any new scheme will have an impact on every road user in Malaysia.Â This means practically every one in Malaysia is affected.
And any one of us can be accident victims.
Therefore, any new scheme must only be introduced after full consultation with all interested stakeholders including consumer associations, trade related associations, the Bar Council and other interested bodies.
CASSA notes with concern that none of these stakeholders have been included in the working committees established by BNM.
Instead, these working committees comprise representatives from the insurance industry.
It is clearly possible that the views and proposals of the insurance industry may be focused on issues of profitability and premium rates. The needs and views of the ordinary road user may not be given due and sufficient consideration.
CASSA also notes that there have been calls from various parties for BNM to be inclusive in these discussions.
There have been letters to the papers since January 2010.
CASSA has been calling for consultations and deliberations for a number of months.Â There has been no response from BNM giving details on the proposed new scheme.
Finally, on the 23 March 2010, a letter has been published in the Star from BNM.Â In this letter BNM states that it will be conducting consultations with all relevant stakeholders.
The irony is that on the other hand, the same letter goes on to state that current insurance premium rates are low and that Â the amount paid out by insurers in comparison to the premium collected is high.
The letter then goes on to state that the new scheme seeks to ensure that all motorists obtain a basic motor insurance coverage at a reasonable premium commensurate with the level of protection provided.
This letter of BNM suggests that BNM already has in mind its proposed structure.
Prime Minister Sir, CASSA puts on record that this has been done without consultation with the relevant stakeholders.Â This letter indicates that the new scheme will seek to further limit the compensation payable to motor accident victims and their families (which is already limited following amendments made in 1984 to the Civil Law Act).
CASSA is also concerned that the new scheme would require motorists/road users to take additional personal accident insurance coverage if they require additional coverage.
YAB Datoâ€™ Seri, both these approaches will result in the insurance industry standing to benefit at the expense of the ordinary road user.
BNM should learn from the experience gained on the proposed 2 tier petrol price scheme and the imposition of the GST.
The public was not adequately represented/consulted in the discussions.
The end result was wasted time and effort in putting forward proposals which were not acceptable to the public resulting in these proposals being deferred.
CASSA therefore reiterates its position that before anything further is implemented or proposed by BNM, BNM should engage immediately in open discussions and deliberations with all concerned stakeholders.
Indeed, Â these stakeholders shouldÂ have been involved in the discussions from the beginning.
This would accord with the present 1Malaysia : People First approach of the Government!