Phased Liberalisation Announcement
In March 2016, Bank Negara Malaysia announced the Phased Liberalisation of the Motor and Fire Tariffs before transitioning to a fully liberalized market. Motor and Fire insurance are mandatory insurance protection and accounts for close to two-thirds, i.e. 66% of the total general insurance market in 2015. For the past three decades, the premiums which insurance companies can charge consumers have been regulated by a tariff structure. For motor insurance, this has resulted in a growing gap between premiums collected and claims paid out by the insurers. This has led to the Motor Third Party business becoming unsustainable. To ensure that motor insurance cover continue to be made available and accessible to motorists, The New Motor Cover Framework (the Framework) was implemented in 2012 and saw four rounds of gradual upward adjustments from 2012 to 2015. The Framework also paves the way for phased liberalization of Motor Tariff in 2016. On the other hand, the Fire Tariff was revised three times from 1992 to 2000.