Bank Negara Malaysia issues code for insurers, takaful operators

It aims to enhance public trust and confidence in Malaysia’s motor claims and repair industry.

Bank Negara Malaysia (BNM) has introduced the Insurers and Takaful Operators-Repairers Code of Conduct, which came into effect on January 2. 

This cross-sector, industry-led initiative involves collaboration amongst general insurers, takaful operators (ITOs), repairers, and key industry associations such as the Persatuan Insurans Am Malaysia, Malaysian Takaful Association, and the Federation of Automobile Workshop Owners’ Association of Malaysia. 

The code aims to enhance public trust and confidence in Malaysia’s motor claims and repair industry by setting out minimum standards for ITOs and repairers in handling motor claims settlements. 

Participation in the code is mandatory for panel repairers, as stipulated in their service level agreements with ITOs. Non-panel repairers may opt-in voluntarily but must comply with the code’s minimum standards upon registration.

Additionally, the code mandates that ITOs establish a dedicated internal dispute resolution process to ensure disputes between ITOs and repairers are resolved transparently, fairly, and promptly. It also sets out minimum terms and conditions to facilitate effective collaboration between ITOs and repairers, aiming to expedite the motor claims and repair process for consumers.

The code reflects contributions from authorities including the Malaysia Competition Commission, Road Transport Department Malaysia, and the Malaysia Automotive Robotics and IoT Institute.

To ensure its continued relevance and efficacy, a post-launch review is planned 12 months after the code’s implementation. This review will assess the feasibility of a second-stage external dispute resolution mechanism and gauge repairers’ satisfaction with the code’s scope and administration. 

BNM will collaborate with the Secretariat and the Code Administration Committee to conduct and analyse findings from the review.