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KUALA LUMPUR (September 30): Bank Negara Malaysia (BNM) said today that it regrets the final decision of the Malaysian Competition Commission (MyCC), in which MyCC concluded that Persatuan Insurans Am Malaysia (PIAM) and its 22 members had infringed Section 4 of the Competition. Act 2010 by entering into an agreement on the application of trade discounts in the prices of auto parts and hourly labor rates for motor vehicle repairs by garages under the Repairers Program approved by PIAM.
PIAM is also known as the General Insurance Association of Malaysia.
“BNM regrets MyCC’s decision as the agreement was implemented through BNM’s facilitation and direction to general insurers to address disputes between shops and general insurance companies that had adversely impacted consumers.
“This was due to lengthy backlogs and disagreements over insurance claim payments for engine repairs. The resulting arrangement was implemented after discussions between PIAM and the Federation of Automobile Workshop Owners Association of Malaysia (FAWOAM).
“As a result of BNM’s regulatory intervention, delays in settlement of claims arising from engine repairs had been significantly reduced and policyholders were better served by a more efficient claims settlement process. For example, average response time from the date of notification of an accident to the completion of the repair works it had been reduced by 55% since 2010, “said BNM.
According to the central bank, the MyCC decision may unravel the positive results of past and ongoing initiatives by BNM and the insurance industry to curb fraud and improve the efficiency of the auto claims process.
BNM said that this in turn will have broader ramifications for the access and cost of auto insurance for Malaysian consumers.
“In light of MyCC’s decision, BNM will follow due process and review its options to safeguard the interests of the automotive public. If any of the policyholders experience undue delays in the repair and release of their vehicles, please contact their respective insurers to get advice. “BNM said.
Meanwhile, PIAM said today in a separate statement that the association and its members are deeply disappointed with the final decision issued by MyCC on September 14, 2020 against PIAM and the 22 general insurers.
PIAM said MyCC found that the association and the insurers had violated the 2010 Competition Act in connection with the agreement between PIAM and FAWOAM on minimum hourly labor rates and parts prices for six types of common-use vehicles, namely, Proton, Perodua, Naza, Nissan. , Toyota and Honda.
“PIAM and its members have always put the automotive public and policyholders at the forefront. To safeguard the interests of consumers, PIAM, under the direction of BNM, agreed with FAWOAM to resolve the long-running dispute between insurers and repairers over trade discounts for parts and labor rates.
“BNM’s leadership was in the interest of the automotive public and addressed consumer complaints about the engine repair process. It also supported ongoing reforms in the auto insurance industry to promote greater competition, innovation and affordability to long term.
“PIAM has presented clear and strong evidence to the commission that the agreement with FAWOAM brings benefits to consumers, in terms of faster response time for repairs, fewer complaints and growth in the number of repairers (thus improving the availability of repairmen for accident repairs).
“RBB Economics UK’s independent economist report was presented by their economist in person to the commission on two occasions. RBB’s report presented clear and strong tangible evidence of how consumers had benefited from the deal,” PIAM said.
According to today’s PIAM statement, MyCC published its final decision after three years of investigations.
PIAM said that the association and the insurers had participated in good faith throughout the process, following the previously proposed decision, on the basis that their evidence and arguments would be thoroughly evaluated, and that the final decision would have taken into consideration and interpreted properly all the facts, arguments and evidence that had been presented to MyCC.
“After three years, PIAM is deeply disappointed that MyCC has issued a decision that does not fully take into consideration the voluminous evidence presented and the legal arguments presented. MyCC’s decision rejects legal and regulatory certainty, and is a decision against Malaysian car public and consumers: PIAM will file a strong appeal against the decision.
“PIAM would like to inform the automotive public that our member insurers are ready to serve all policyholders through their customer service hotlines and channels. The industry is committed to continually improving and improving the customer journey for all of our customers. insured, “PIAM said.
At the time of this writing, MyCC had not issued a statement on its final decision or a response to BNM and PIAM’s statements.
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