by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Wednesday, 8th June 1994:
DAP calls for formation of Cabinet Committee to resolve the motor insurance crisis
The first question that is now asked when there is an accident is whether the motor insurance policies of the vehicles involved are from the Mercantile Insurance Sdn. Bhd.
The Bank Negara decision on May 17 to stop all Mercantile Insurance Sdn. Bhd. business and suspend its payments has triggered off a major motor Insurance crisis – the full magnitude of which has not been fully appreciated by the public or the Government.
This motor insurance crisis has been compounded by three further developments:
* the decision by Kurnia Insurance not to give insurance coverage to vehicles more than ten years old and commercial vehicles over five years old;
* the refusal of the Director-General Insurance to intervene to protect the interests of ordinary motor-vehicle owners against, such unilateral decision by Kurnia Insurance, which would be followed by other motor-insurance companies;
* news report that another major motor-insurance company faces a RM50 – RM60 million financial crisis which may result in Bank Negara takeover and liquidation.
The refusal of the Director-General of Insurance to intervene to protect the interests of the ordinary motor-vehicle owners against unreasonable guidelines by motor-insurance companies make a complete mockery of government claims to protect the consumers.
The Government cannot allow a situation where 30 to 40 per cent of the six million vehicles on the road are not adequately protected by insurance policies to continue.
Malaysia may be the only country in the world where the Transport Minister is completely indifferent to this crisis in the motor-insurance industry – to the extent that the Transport Minister, Datuk Dr. Ling Liong Sik, has not said a single word about it in the past month.
A Cabinet Committee should be urgently established to resolve the motor insurance crisis to give meaningful protection to the consumers, whether in the form of motor-vehicle owners in terms of getting adequate protection of insurance companies, or the members of public involved in accidents claiming compensation against insurance companies.