1. Introduction (Our Capacities/requirements)

Motor insurance is compulsory under the law of Malaysia. This class of insurance is governed by the Motor Tariff and can only be transacted on a Cash Before Cover basis. The main classes of vehicle can be broadly divided into 3 categories, namely :

a) Private Cars

b) Commercial Vehicles & Special Type vehicles

c) Motor Cycles

2. Company Attitude

As motor business has always been a difficult class of business to underwrite, the company's attitude towards this class of business is to do it on a selective basis. Our main focus is on private cars which is generally more favorable than the other type of vehicles. 

Other classes of vehicles including high risk vehicles such as buses, tankers, taxis, 'A' Permit Commercial Vehicles should be avoided as far as possible due to its adverse claims experience. 

Motor Cycles business is also not a class the Company wants to develop due to its small premium (which is not commensurate with the risk exposure), bad claims experience and heavy administrative work involved in processing the policies.

As a guide for business development, Agents who are writing motor business and possess the following characteristics are preferred :

a) comply strictly with CBC regulations, and underwriting guide and 

    requirements.

Collect Cash Before Cover

b) 85% of the motor business must be private car 

business.

3. Preferred Motor Portfolio Mix

Our preferred motor portfolio mix is as follows:

Type of Vehicle Total Motor Gross Premium

Private Car 85%

Commercial Vehicle 14%

Motor Cycle 1%

a. Private Cars

Our main focus is on Private Cars Insurance which is generally more favorable than other types of vehicles, MPIB's Agents are thus encourage to focus on this class of business, Agents arc required to maintain their private car portfolio at 1:15% of the total motor gross premium.

Third Party cover policy is strongly discouraged due to its bad claims experience and inadequate premium, We are only prepared to underwrite on accommodation basis, Each and every agent's contents of Third Party cover shall not exceed Two (2) policies for every Ten (10) issued.

b. Commercial Vehicles

Commercial Vehicle business is not our preferred type. This includes lorries and buses, Public buses and "A" permit commercial vehicles are totally declined, However, "C" Permit vehicles can be accepted, Commercial Vehicle content shall not exceed 14% of total motor gross premium.

Third Party cover policy is strongly discouraged due to its bad claims experience and inadequate premium, We are only prepared to underwrite on accommodation basis, Each and every agent's contents of Third Party cover shall not exceed Two (2) policies for every Ten (10) issued

C. Motor Cycles

Motor Cycles business is also not a class the Company wants to develop due to its small premium (which is not commensurate with the risk exposure), bad claims experience and heavy administrative work involved in processing the policies. 

Agents should avoid this class of business and only accept motor cycle business if the Insured's other insurance business are also insured with the Company, The content of motor cycle business should not exceed 1 % of the total motor gross premium.

4. Scope of Cover

The two main types of cover is as follows :

a) Comprehensive policy

This is the broadest insurance cover available under the motor tariff and it covers the Insured against :any loss or damage to the vehicle as a result of theft, fire, explosion, lightning, malicious act, impact damage due to accidental collision; and

• any liability claims from third party for property damage and/or bodily injury arising out of the use of the vehicle.

Additional benefits are also available subject to a small additional premium legal liability to passengers

•windscreen damage cover

•radio cassette/CD player

•flood, windstorm, rainstorm, landslip

•strike, riot and civil commotion

b) Third Party Policy

The coverage provided under this policy is very limited as it only protects the Insured or the authorized driver against any liability claims from the third parry for property damage and/or bodily injury arising out of the use of the vehicle.

5. Acceptance Criteria

All acceptances of molar business are strictly subject to the following Regulations/Guidelines

a) Cash Before Cover Regulations.

b) Inter-Company Agreement on General Insurance Business (ICAGIB).

c) Motor Tariff.

d) Motor Insurance Underwriting Term as stated in this guideline.

e) No Claim Discount Confirmation procedure.

6. No Claim Discount

Insurer shall upon granting the NCD, confirms the NCD with the Insured's previous insurer and if it is discovered that the NCD is incorrect, the Insured shall pay the difference within 14 working days, failing which the policy may be canceled by the Company.

7. Transfer of Ownership

When a vehicle is transferred to a new owner, a fee of RM10.00 (for all classes) will be charged for the transfer of the insurance policy. NCD is not transferable to new owner and shall be recovered on pro-rata basis for the unexpired period of insurance.

8. Short Period Cover

• All policies which are renewed/extended for less than one year are subject to the following short period rates :

Not exceeding 1 week       1/8 of the a. premium

Not exceeding 1 month      1/4 of the a. premium

Not exceeding 2 months    3/8 of the a. premium

Not exceeding 3 months    1/2 of the a. premium

Not exceeding 4 months    5/8 of the a. premium

Not exceeding 6 months    3/4 of the a. premium

Not exceeding 8 months    7/8 of the a. premium

Exceeding 8 months         Full annual premium

9. Designated Bank Accounts for remittance of Motor Premium

To ensure that the Cash Before Cover Regulation is fully complied with, all Agents are advised to bank all premium within 7 working days from the date of issuance of the cover notes, into the following designated accounts at any of the branches nearest to your office.

Current Account Nos

a) Malayan Banking Bhd 014011-3-2095-6

b) Alliance Bank Malaysia Bhd 140820010004240

All submission of cover notes must be accompanied by the bank-in slips and the batching sheets. Remittance must be in exact sums and identified with the relevant cover notes

a) Private Cars

b) Commercial Vehicles & Special Type vehicles

c) Motor Cycles

All premiums quotation illustrations were in practice generating business for various insurers between 2001 until detariffication and PDPA's act implementation.