The Consumers Association of Penang congratulates Bank Negara and the General Insurance of Malaysia (PIAM) for introducing rebates for motorists who buy their policies directly from insurance companies.

Starting from 1 July 2009 motorists will get to enjoy a five percent rebate on their insurance in the first year and a 10 percent rebate for renewals thereafter when the policies are purchased directly from the insurance companies.

This move is fair to consumers and should have been implemented long ago. Years ago we had questioned Bank Negara and PIAM as to why the motorists who buys directly from the insurance company should pay the same premium when no intermediary and therefore no commission is involved.

We sympathise with the agents who are worried that their income will be threatened by this move. However they should be comforted by the thought that in the business world, if one provides excellent service, the clients will stay on.

On the other hand agents as consumers themselves, will understand that costs saved by the companies should be passed on to consumers. Therefore the costs that insurance companies saved by dealing directly with motorists should be passed on to motorists.

Bank Negara and PIAM must ensure that the consumers enjoy the rebates come 1 July 2009.


S M Mohamed Idris is President of the Consumers Association of Penang