by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Sunday, July 10, 1994:
Most unfair of Bank Negara not to wait until Parliament has passed amendments to Insurance Act to provide for payment of claims at 70 sen on each ringgit before applying for liquidation of Mercantile Insurance Sdn. Bhd.
It is most unfair to the 122,000 Mercantile motor insurance policyholders that Bank Negara had not waited until Parliament had passed amendments to the Insurance Act to provide for payment of claims at 70 sen on each ringgit before applying to the courts for the liquidation of Mercantile Insurance Sdn. Bhd.
The amendment to the Insurance Act was tabled in the Dewan Rakyat for first reading last week and they have not been debated and passed yet.
As the Bank Negara’s petition to the High Court for the winding up of Mercantile Insurance Sdn. Bhd has not been heard yet, it is also most unfair for the Road Transport Department (JPJ) to warn the 122,000 motor policy holders that their policies are now defunct and that unless they seek new cover, they would be prosecuted for not having valid insurance coverage.
Bank Negara must not shirk its responsibility to the 122,000 Mercantile motor insurance policyholders who had put their trust in the Bank Negara’s public undertaking after its takeover of Mercantile Insurance Sdn. Bhd. in April 1991 that it would be ‘business as usual’.
Why should these 122,000 Mercantile Insurance policyholders, who had acted on Bank Negara’s undertaking in April 1991 that it would be ‘business as usual’ in Mercantile Insurance Sdn. Bhd. and renewed or bought new motor insurance policies, pay the price of the failure of Bank Negara to realise the magnitude of the financial problems in Mercantile Insurance Sdn. Bhd. three years ago?
The parties who should pay the price of such an insurance scandal should be the Mercantile Insurance Sdn. Bhd. shareholders or Bank Negara for its oversight in giving the public undertaking of ‘business as usual’ in April 1991.
It would be double injustice for the JPJ to hound the 122,000 Mercantile Insurance policyholders with its threat to arrest and prosecute them for not valid insurance coverage. If anybody should be prosecuted for the predicament faced by the 122,000 Mercantile Insurance policyholders, it should be Bank Ngara for selling policies which are now regarded by JPJ as invalid!
Bank Negara should suspend its court petition to wind up Mercantile Insurance Sdn. Bhd. and honour all its motor insurance policies until Parliament has passed amendments to the Insurance Act to protect the rights and interests of the 122,000 Mercantile Insurance motor insurance policyholders now left in a lunch by Bank Negara.