Gerakan has reminded Bank Negara Malaysia that “It must always be the people first, not the insurance industry first,” in its memorandum submitted to the Director of the Financial Sector Development Department of Bank Negara Malaysia on the proposed scheme for the Third Party Bodily Injury and Death (TPBID) Claims.

Gerakan National Deputy President Datuk Chang Ko Youn said the memorandum has been submitted to Bank Negara today, as the nation’s central bank has called for public feedback on the proposed scheme.

Chang explained that among the contents of the memorandum are the concerns whereby limiting heads of damages and capping is detrimental to the public, which is inconsistent with the purposes of the damages sought.

“The protection must also be equal for everybody and not limited to a certain segment of society,” stressed Chang who added that there is a concern on whether the public or victims’ rights will be seriously affected in the implementation of the scheme, resulting in the erosion of their basic rights.

Chang further added that the issue of grossly misaligned motor premium should be explored, as it was reported that the profit from comprehensive policy is RM 1.6 billion whereas the loss for third party risk is RM 940 million.

“The setting up of a new company or New Co to manage the scheme must be avoided as it involves huge public funds and this may affect the government’s credibility,” Chang said.

“Some of the questions that arise from the formation of the New Co are public funding issues which cost tax-payers money, wastage of funds as there is already an existing system to handle and deliver claims, possibility of bailing out existing insurers who ran into trouble and the creation of an extra layer of bureaucracy.”

Chang reminded the Bank Negara that it must explain to the public on why only one or two companies which have monopolized the insurance business were not monitored in their operation for the past 10 to 20 years leading to their claimed losses.

“Otherwise, the public would have the perception that there is mismanagement and leakages in the system. Bank Negara’s supervisory role will be questioned and this does not bring a good image to the government,” warned Chang.

Chang concluded by calling for the maintenance and possible fine-tuning of the current system because introducing a new scheme with multiple weaknesses would be a waste of time and money.

The memorandum is based on a study done by a special committee helmed by Baljit Singh, a lawyer-cum-member of Gerakan Central Bureau on Human Rights and Law.