Central bank slams competition commission’s fining of insurers

Financial authority defends general insurers, saying that its actions were for the benefit of consumers

Central bank slams competition commission’s fining of insurers

Insurance News

By Gabriel Olano

Bank Negara Malaysia, the country’s central bank, has criticized the Malaysia Competition Commission’s (MyCC) decision to fine the General Insurance Association of Malaysia (PIAM) and its 22 members.
The decision, which levied a penalty of MYR213.45 million (US$48.1 million) on PIAM and its members, was handed down due to the association allegedly entering an “anti-competitive agreement” with a group of auto repair shops.
“The proposed decision is most unfortunate as it will severely impact consumers’ interest. Public benefits are served by the arrangement that was mutually agreed between PIAM and the Federation of Automobile Workshop Owners’ Association of Malaysia (FAWOAM),” the central bank said in a statement released on Wednesday.

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The central bank’s statement comes after the PIAM requested MyCC to reconsider its decision, saying it would seek legal advice and defend its position that the agreement with FAWOAM was legal.
Bank Negara agreed with PIAM that the deal was made to comply with a 2011 directive issued by the central bank to quickly resolve consumer complaints about motor insurance claims and repairs.
“Such disputes had given rise to protracted delays in repairs and caused significant inconvenience to consumers,” the central bank said in PIAM’s defence. In conclusion, it said that public interests were best served by similar agreements which instituted reforms in the motor insurance industry.

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