Premium Rating for Electric Vehicles

Premium ratings for electric vehicles (motorcycles and private cars) were introduced in the Motor Tariff following the introduction of rules for the registration of electric vehicles by the Road Transport Department (JPJ). Members have also been requested to maintain a separate database for these category of electric vehicles to assist in the future rating and review of ratings for this vehicle class.

Agreed Value Cover in Motor insurance

As a measure to expand motor insurance cover to the general public, the Association supported the introduction of agreed value policies in the market. The following conditions were agreed for market use:-

  • the offer and sale of agreed value policies are at the discretion of individual member companies based on their own underwriting guidelines and policies.
  • the restriction in the Motor Tariff whereby member companies were restricted from promoting the offering of agreed value policies was lifted.
  • Insurers will pay the agreed amount to the insured in the event that the vehicle is stolen or totally destroyed.

Trade Discounts on Parts Prices and Labour Rates

Arising from meetings between BNM, PIAM, the Malaysian Takaful Association (MTA), the Association of Malaysian Loss Adjusters (AMLA), Motordata Research Consortium (MRC), and the Federation of Workshop Owners’ Associations of Malaysia (FAWOAM), a consensus was agreed in respect of the trade discounts on part prices and labour rates.

Following several meetings with FAWOAM, the insurance industry was able to negotiate an offer on trade discounts on parts and labor rates that were accepted by FAWOAM in July 2011. The implementation date was fixed for 1st August 2011 and the agreement comprised of:-

  • Trade Discounts on parts at 25% for the six vehicle makes namely Proton, Perodua, Nissan, Toyota, Honda and Naza and 15% for Proton Saga Base Line Model (BLM). It was further agreed that in special cases where repairers have to purchase parts with lower trade discounts due to urgency or other valid reasons, a reduction in the trade discount of 25% could be considered by insurers on the merits of each case and subject to evidence via purchase invoices and verification by appointed adjusters.
  • Labour Rates of RM30.00 per hour but with allowance for insurers to apply either Thatcham Repair Times or Opinion Times as currently practiced, pending review of the Thatcham Repair Times to adapt to local repair standards.

Central No Claims Discount (NCD) Database

With effect from 1st November 2011, it is mandatory for all insurers to obtain confirmation of NCDs for their renewal business through the Central NCD Database before allowing NCDs to any insureds.

With the above requirement, the industry is now using one consistent and reliable source of reference for NCD confirmations for new business (which was implemented on 1st August 2010) and renewal business.

Review of Knock-for-Knock (Kfk) Agreement

Implementation of Electronic KfK Workflow System

The industry has implemented the Electronic KfK Workflow System effective from 1st November 2011 whereby all member companies and Takaful Operators are required to use the electronic workflow system to replace the manual KfK claims process of notification, confirmation and reimbursement between insurers as well as with takaful operators.

The Claims Management Sub-committee will be looking into the 2nd Phase of the project to further enhance the KfK Workflow System by introducing the following:-

  1. ODKfK – KfK notification and reply
  2. Third Party uninsured losses – KfK enquiry and confirmation (documents submission)
  3. KfK reimbursement – enforcement of 1% penalty charge for late reimbursement will be auto-defaulted via the system
  4. KfK recovery and reimbursement statement with inclusion of the 1% penalty charge.

Electronic Submission of Third Party Property Damage Claims

With effect from 1st November 2011, BNM has directed all adjusters to make reference to the MRC centralized database for estimation of repairs and electronically submit all third party property damage claims estimates to insurers or takaful operators upon completion of assessment of the damages.

This requirement will enhance and expedite the claims settlement process as well as provide greater transparency to insurers and consumers making third party property damage claims.

Vehicle Theft Reduction Council of Malaysia Bhd (VTREC)

Strategic Planning Workshop

VTREC organised a 2-day workshop in July 2011 with the theme “Combating Vehicle Theft in Malaysia”. Fifty five (55) participants representing thirty one (31) key stakeholder organisations from both the public and private sectors came together to address the issues of vehicle theft for cannibalisation of spare parts and for smuggling across borders. A total of 16 initiatives were identified and adopted for action at the Workshop.

“VTREC Workshop on “Combating Vehicle Theft in Malaysia” held on 18 – 19 July 2011 at Awana Genting Highlands. Keynote Address by YB Dato’ Sri Khalid Bin Abu Bakar, Deputy Inspector General of Police

In line with the government’s efforts in crime reduction under the National Key Result Area (NKRA) on Crime, these initiatives were submitted to the Delivery Task Force of NKRA, through PEMANDU (Performance Management and Delivery Unit) for endorsement, direction and action.

National Register for stolen, total loss and Beyond Economic Repair (BER) vehicles

With the endorsements from the VTREC Board and PIAM Management Committee and as one of the initiatives adopted under the Workshop, VTREC is working to provide the Road Transport Department (Jabatan Pengangkutan Jalan) and the vehicle inspection organisation, PUSPAKOM, with records of stolen, total loss (scrap) and BER vehicles. The main objective is to prevent the re-registration or transfer of ownership of stolen and total loss vehicles. Whilst for BER vehicles, it is for thorough re-inspection of BER vehicles to ensure no transfer of ownership is allowed if the repaired vehicle is certified not roadworthy or if the repaired vehicle fails the inspection.

Recovery of Stolen Vehicles from Overseas

In August 2011, in close co-operation with the Royal Malaysia Police Interpol, the Association was successful in the recovery of nine (9) vehicles from Singapore with estimated value of RM930,000.

Towing of Police Recovered Stolen Vehicles Scheme

The Association has decided that for mutual benefit, the Scheme which provides free towing service to the Police for towing of recovered stolen vehicles would be continued. The Scheme has been in operation in the Klang Valley since 1st January 2010 and up to 31st December 2011, 259 cases had been handled.

The Association is continuously monitoring the usage of the service by the Police and looks into improvement measures to ensure the effectiveness of the scheme.

PIAM Approved Repairers Scheme (PARS)

The total number of workshops approved as at 31st December 2011 was 593. The breakdown of PARS repairers by states was as follows :-

  1. JOHOR : 72
  2. KEDAH : 28
  3. KELANTAN : 9
  4. MELAKA : 17
  6. PAHANG : 22
  7. PERAK : 40
  8. PERLIS : 2
  9. PULAU PINANG : 38
  10. SABAH : 36
  11. SARAWAK : 40
  12. SELANGOR : 173
  13. TERENGGANU : 13
    TOTAL : 593