In a joint press release, it was announced that all 23 member companies under the General Insurance Association of Malaysia (PIAM) and four general takaful member companies of the Malaysian Takaful Association (MTA) are committed to supporting an orderly and gradual transition to market-based pricing as well as provide higher service quality as part of phase two of the liberalisation of motor and fire tariffs.
The phased liberalisation of motor and fire tariffs was announced by Bank Negara Malaysia (BNM) in 2016, with phase one commencing from July 1 that year. Following this, the industry was allowed to offer new products and optional add-ons, with examples of the latter being flood coverage, lost car key replacement and others.
In phase two, which kicked off a year later from July 1, 2017, motor insurance premiums are no longer determined on a fixed rate basis, but on a risk-based assessment system.
As such, insurers and Takaful operators are now able to set pricing based on various risk factors such as residence location, vehicle make and model, use of vehicle, occupation of owner, claims history, gender and age. The upside is greater competition in the industry as consumers are able to shop around for competitive pricing rates and coverage that best meets their insurance needs –
“With the effectiveness of phase two, all licensed general conventional insurers and general Takaful operators shall ensure that basic protection remains accessible and affordable. On top of that, phase two involves the deployment of end-to-end digital claims solutions to deliver a seamless consumer experience and maintain continued access to affordable motor protection in the future,” PIAM and MTA stated in the joint release.
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What about proposers who conceal or won’t disclose the actual use of vehicle????if there is any claims arising from these concealment who is responsible for the damages????