In a statement today, BNM said the proposed options for the scheme would be based on four guiding principles of ensuring accessibility of basic protection to motorists, providing basic protection at reasonable premiums, continue providing voluntary cover on top of basic protection and faster settlement of claims.
One proposed feature under the basic scheme is for liability to be capped so that compensation paid would be limited to, for example, RM2 million per injured person/life.
This may also be subject to sub-limits based on damages, such as, personal injury, nursing care and loss of earnings. Two options have been tabled for feedback from key stakeholders.
Scenario A proposes a fixed compensation scale with limited access to courts.
Under this scenario, the proposal calls for no hike in premiums but for speedier claims settlement.
Scenario B proposes ranged compensation with full access to courts as per the current system, which would involve a reasonable premium increase.
The statement said the central bank and the Ministry of Finance had completed initial consultation sessions on the proposed third party motor cover framework with key stakeholders in April.
It said a consultation paper, explaining the rationale for proposing a basic scheme, guiding principles, objectives and broad features under consideration, was posted on BNM's website for members of the public to provide their feedback on the scheme.
As at end-May, 125 respondents submitted their feedback via email, memoranda or letters to editors of national newspapers.
Feedback were received from members of the public, consumers, transport and business associations, political parties, Members of Parliament, the Bar Council and lawyers, insurers and insurance agents
BNM said all feedback received was being taken into consideration and further engagement with stakeholders would be undertaken to provide a holistic solution that ensured adequate protection to motorists and road users at reasonable premiums.
The review will involve resolving the appropriate overall limit of compensation; enhancing the existing court system to resolve disputes; phasing-in of additional measures to enhance the efficiency in the overall claims settlement process and instituting gradual premium adjustments over time to reflect the cost of insurance.
The infrastructure to support the framework will also be further reviewed to minimise the costs to the government, taking into consideration, the constructive feedback received.
In addition, extensive efforts will also be undertaken towards significantly improving the overall claims settlement process which would require the full support of all relevant stakeholders. - Bernama
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