by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tan Jung, Lim Kit Siang, in Petaling Jaya on Friday, June 10, 1994:
Bank Negara insist be firm to protect the interests of the motoring public and not issue mixed signals to the insurance companies
Bank Negara must be firm to protect the interests of the motoring public to ensure that they get protection of insurance policies and not issue mixed signals to the insurance companies.
Bank Negara’s statement yesterday is the best example of such mixed signals to the insurance companies.
On the one hand, Bank Negara warned that insurance companies should not arbitrarily reject any form of insurance cover for motorists, but on the other hand. Bank Negara has refused to intervene in the case of Kurnia Insurance (M) Bhd. which had refused to provide insurance cover to vehicles more than 10 years old and commercial vehicles more than five years old since June 1.
Bank Negara should realise that as it has become the regulatory authority of the insurance industry since 1988, it has a responsibility to ensure that the motoring public are not put to great inconvenience and hardships by arbitrary underwriting guidelines by insurance companies rejecting insurance cover for motorists.
If Bank Negara is against insurance companies arbitrarily rejecting any form of insurance cover, then it must be bold enough to take a public position that the new underwriting guideline of Kurnia Insurance (M) Bhd. in rejecting to provide insurance cover for vehicles more than ten years old and commercial vehicles more than five years gold is against public policy.
This will also prevent other motor insurance companies from following the example set by Kurnia Insurance (M) Bhd. and unilaterally and indiscriminately rejecting insurance cover for all vehicles after a certain age, in utter disregard of the condition of the vehicle.
As the regulatory authority responsible for the supervision of the insurance industry, Bank Negara should set up complaints centres in every state where motorists who have difficulties in buying insurance cover for their vehicles can go for help.
Call on Anwar Ibrahim not to take any action to wind up Mercantile Insurance Sdn. Bhd. until after July Parliament meeting and debate on Bank Negara take-over of Mercantile since 1991
Finance Minister, Anwar Ibrahim, should state whether the Mercantile Insurance Sdn.Bhd. shareholders had submitted a rescue plan by the June 7 deadline to forestall the liquidation of the company.
On May 17, Bank Negara directed Mercantile Insurance to cease all business and suspend all payments and announced that unless the Mercantile Insurance shareholders injected RM383.4 million within two weeks, it would recommend to the Finance Minister to wind up the company.
Yesterday, a Bank Negara spokesman said that he did not know whether the Mercantile shareholders had sent a rescue plan to the Finance Minister by the June 7 deadline.
Parliament has been summoned to meet for ten days from July 4 to July 19.
DAP calls on the Finance Minister not to take any action to wind up Mercantile Insurance, which will adversely affect the 230,000 policyholders and 40,000 claimants, until there is a full debate in Parliament both on Bank Negara’s take over of Mercantile since 1991 as well as on the proposed amendments to the Insurance Act 1963.