Sunday, June 21, 2009

Insurance premium rebates from July 1

Come July 1 2009, individuals purchasing general insurance covers directly from insurance companies will enjoy rebates, Bank Negara Malaysia says.

Direct purchases include via walk-in, through the Internet, direct mail and telemarketing channels.

The quantum of the rebates will depend on the type of insurance cover purchased.

For motor insurance, individuals will receive a 5 per cent premium rebate in the first year of implementation, and 10 per cent thereafter.

For others including businesses, insurance companies have the flexibility of providing rebates.

The announcement came amidst protests by insurance agents, who were first alerted by the move when a circular to General Insurance Association of Malaysia (PIAM) from Bank Negara leaked out to the press in May.

Insurance agents were concerned that with the new incentive, individuals will stop using their services. Insurance agents receive commissions from selling insurance covers.

Yesterday, Bank Negara deputy governor Datuk Mohd Razif Abd Kadir said it will go ahead with the implementation of the policy despite the pressure from insurance agents, "because it is only fair to the consumers".

He said the new policy is part of Bank Negara's ongoing reviews of its policies, as well as from feedback from consumers.

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