We heard a lot about the impending detariffication recently, and as with most events that trigger the changing of processes, peoples and products cum services there tend to be instability and misunderstand (of the majority) of the actual change needed and what it was intended to achieve in the very first place. I supposed there will be misunderstanding and to an extent, the regulators are still unsure how those micro aspects (as raised by the industry subject-matter experts) should work in tandem with the overall conceptualised viewpoint (model) of the regulators for the benefit of the masses, i.e. the insurance buying public.
Nonetheless to give you what’s still fresh in my mind, here are some of the pointers, if that could help you glide through the mystery surrounding this liberalisation process or roadmap….
(1) The “new product” which was previously announced as new standalone product and new optional add-on is now rephrased as:
a) Existing tariff regulated products plus new optional add-ons
b) The packaging of existing tariff regulated products and new products as a package where no option for selecting of the exact coverage.
c) The bundling of existing and new products for selling as a bundled product. This is a confusing part based on the definitions and choice of wordings used.
(2) PIAM still need to work out the policy wordings if any of those products fall within (1) above.
(3) Once PIAM approves the wordings insurers / takaful operators must compile all information including pricing matrices for submission to BNM for final approval. Please bear in mind this is NOT a file-and-launch or launch-and-file, whatever you call it but is an outright approval requirement. This is liken as kicking the tariff out and replacing the procedures which you need to pick up from the regulators.
(4) Once approved then the product (….of course, minus the pricing) is make known to the industry. Insurers / TO may play copy-catting the new product.
The following is the media holding statement jointly issued ….. (enjoy reading).
|MEDIA HOLDING STATEMENT
PHASED LIBERALIZATION OF FIRE AND MOTOR TARIFFS
1) In March 2016, Bank Negara Malaysia (BNM) announced the phased liberalization of the Motor and Fire Tariffs.
2) The phased liberalization of these 2 major insurance classes is expected to yield several important outcomes as follows
· Differentiated rates according to risk profiles
· Wider range of motor and fire products
· Higher efficiency level
· Diversified delivery channels
· Expanded role of intermediaries
3) To ensure an orderly transition to a liberalized environment, a thorough review of the governance structure and processes is being carried out by the general insurance industry. In this regard, the general insurance industry is working in close consultations with BNM.
4) Following the issuance of the concept paper on Liberalization in March 2016, PIAM has consolidated and submitted the overall industry response and feedback to BNM. We are awaiting for the finalised policy document from BNM which will entail implementation requirements and supervisory expectations placed on the industry to implement the liberalization plan.
5) We will continue to update the media on the latest developments and progress.
Issued by Corporate Communications Department
26 May 16