Ministry Looks At Pool System For Insuring Aged Cars

July 04, 2009 18:48 PM

Ministry Looks At Pool System For Insuring Aged Cars

By: Ramjit

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BACHOK, July 4 (Bernama) -- The Ministry of Finance is looking at implementing a pool system for insurance companies in order to counter the problems faced by car owners in getting insurance for cars older than 10 years.

Deputy Finance Minister Senator Datuk Dr Awang Adek Hussein said for a near term solution, the ministry through Bank Negara Malaysia (BNM) has also agreed to encourage Pos Malaysia Bhd (Pos Malaysia) to become an agent to provide the service for its clients.

"The government is aware of the problem of insurance companies not wanting to give coverage for cars older than 10 years or costing less than RM10,000, that are still operational on roads, as this brings them losses," he told reporters following the release of fish seedlings at the ikan keli cultivation project at Kampung Telok Merbau in Perupok, near here Saturday. The project is part of a poverty eradication programme.

The minister said this when commenting on the refusal by several insurance agencies that are refusing to renew insurance applications for cars below RM10,000, including taxis, as they are considered to bring losses.

A news report today said that there are an estimated 4.8 million cars on the road, aged 10 years and above and valued less than RM10,000, including more than 900,000 Proton and 300,000 Perodua cars, namely Kancil, Rusa and Kembara registered between 1994 and 1999.

Dr Awang Adek said the government was aware of insurance companies that cannot afford to cover high risk cars as it would involve losses for the companies in the event of accidents.

This is not a new problem and the government through Bank Negara Malaysia (BNM) and involved insurance companies are working to overcome this by taking several measures that will benefit the involved parties.

"Following a meeting chaired by me recently, the government has agreed to appoint a specific party, including Pos Malaysia as an insurance agent to enable the car owners pay insurance and get coverage based on the classification of the insurance," he said.

He said the government also agreed to encourage insurance companies form a company or pool of insurance agents through a memorandum of understanding in order for all parties to see profits and not be monopolised by a single party.

"The move will be introduced in July and will be effected nationwide to take care of the interest of car owners and the operator of the company or insurance agent," he said.

-- BERNAMA

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