Wednesday, 30 Sep 2020 04:13 PM MYT
KUALA LUMPUR, Sept 30 — Bank Negara Malaysia (BNM) regrets the Malaysia Competition Commission’s (MyCC) decision to penalise General Insurance Association of Malaysia (Piam) and its 22 members for infringing Section 4 of the Competition Act 2010.
In a statement today, BNM said on September 14, 2020, MyCC concluded that Piam and its 22 members had infringed the Act when it had entered into an agreement on the application of trade discounts on parts prices and hourly labour rates for motor vehicle repairs by workshops under the Piam Approved Repairers Scheme.
Besides imposing financial penalties, MyCC had also directed the parties to cease and desist from implementing the agreed parts trade discount and the hourly labour rates, and for such discounts and rates to be determined independently by individual insurers and workshops.
“BNM regrets MyCC’s decision as the arrangement was put in place through the facilitation and direction of BNM to the general insurers to address disputes between workshops and general insurance companies that had adversely impacted consumers.
“This was due to protracted delays and disagreements over insurance claims payments for motor repairs,” it said.
The central bank said the resulting arrangement was implemented after discussions between Piam and the Federation of Automobile Workshops Owners Association of Malaysia (FAWOAM).
“As a result of BNM’s regulatory intervention, delays in settlement of claims arising from motor repairs had reduced significantly and policyholders were better served by a more efficient claims settlement process.
“For example, the average turnaround time from date of notification of an accident to the completion of repair works was reduced by 55 per cent since 2010,” it said.
It said MyCC’s decision might unravel the positive outcomes from past and ongoing initiatives by BNM and the industry to curb fraud and improve efficiency in the motor claims process.
“This in turn will have wider ramifications for access to and the cost of motor insurance for Malaysian consumers,” it said.
BNM said in light of the decision by MyCC, the central bank would follow due process and review its options to safeguard the interests of the motoring public.
Policyholders who experience undue delays in the repair and release of their vehicles should contact their respective insurers for advice, it said.