It is also aligned with the MoT’s Road Safety Plan 2014-2020 to reduce the number of deaths and serious injuries by 50% by 2020
by RAHIMI YUNUS/ pic by BERNAMA
THE government is reviewing the no-claim-discount (NCD) to instil and encourage good driving behaviour and road safety.
The Finance Ministry said the move is in line with the government’s commitment to implement a more equitable and market-based approach for the private sectors as part of the ongoing phased liberalisation of motor insurance tariff.
“Bank Negara Malaysia, together with the insurance and takaful industry in Malaysia, is currently developing proposals for the next phase of the liberalisation of the motor and fire tariffs targeted for the second half of 2020.
“This is as part of the reforms to enhance the sustainability, as well as to preserve the overall stability in the insurance and takaful market,” the ministry said in a statement yesterday.
It added that the review is also aligned with the Transport Ministry’s (MoT) Road Safety Plan 2014-2020 with the aim of reducing the number of deaths and serious injuries by 50% by 2020.
The NCD is a “reward” entitlement for vehicle owners if no claim was made on their insurance policy on an annual basis.
Different NCD rates are applicable for different classes of vehicles.
For a private car, the scale of NCD ranges from 25% to 55% as provided in the policy.
The first phase of the liberalisation of the motor and fire tariffs was introduced on July 1, 2016.
In the initial phase, insurers and takaful operators were given the flexibility to offer new motor products and add-on covers that were not defined under the previous tariff system.
The liberalisation also provides flexibility for premium rates for motor comprehensive, and motor third-party fire and theft products where premium pricing will be determined by individual insurers and takaful operators.
Consumers have benefitted an improved service quality and a wider range of products at competitive prices due to greater competition among insurers since the liberalisation took effect.
Malaysia was ranked the third-highest in Asia in road accident death rate, after Thailand and South Africa, according to the World Health Organisation in 2013.
The study stated that Malaysia recorded a death rate of 23 per 100,000 population, which could be translated to about 7,000 casualties on the road every year for a 30 million population.
Insurance providers are also saddled with high motor insurance claims largely due to the high number of accidents.