PROTON EDAR DEALERS ASSOCIATION MALAYSIA
“FIX MOTOR TARIFF SHOULD BE REVISED INSTEAD OF THE MANDATORY REBATE”
MAY 2009, KUALA LUMPUR. “The motor tariff should be revised for the benefits of the public in line with the rest of the world instead of a direct rebate” said Armin Baniaz Pahamin, Acting President Proton Edar Dealers Association Malaysia (PEDA) commenting on the YB Dato Chor Chee Heung, Deputy Finance Minister remarked on the implementation of the mandatory rebates for car owner.
1. The rest of the world, typically the developed countries like the United Kingdom, Australia and Japan, Motor Insurance tariff premium are variable according to age, gender, occupation, geographical area, location of car parked (owned house or public car park), type of car and the cylinder capacity.
2. For example, in the developed countries, lower risk customers are classified as a middle age lady drivers whom worked as a teacher driving a 1.3cc Proton saga. Example of Higher risk customers are 19 years old man driving a 2.0 Fiat Coupe turbo. The lower and higher risk customers pay a different insurance premium.
3. Extra loading are extended to customer with higher risk depending on the risk hazard listed above whilst customer with lower risk pay a cheaper premium.
4. Malaysia adopted a fix-tariff in discrimination to the low risk customer and at the advantage of the higher risk customer.
5. Customers do not have any option for a cheaper tariff except to pay the fix tariff regulated by Bank Negara even if they approached all the 36 General Insurance companies in Malaysia.
6. The public will benefit better with a non-fix tariff rather than the mandatory rebate. PIAM or the Bank Negara should review to revise the current fix tariff in favour of a variable non-fixed tariff that will be of direct benefit to the public.
7. With a variable non-fix tariff, insurance agents can provide and a better services by offering and advising varieties of insurance packages (under different tariff) to cater for the public’s individual needs.
8. If the fix-tariff is revised in favour of a variable non-fix tariff, then the rebate can be extended in favour to customers whom opt not to use the agent’s services or advice (to choose which tariff that best suited them).
9. Until such a revision is made, PIAM should withdraw the proposal.