THE government is conducting a study on the review of the motor no-claims discount (NCD) as part of efforts to instil and encourage good driving behaviour and road safety, the Finance Ministry said in a statement today.

Bank Negara Malaysia and the insurance and takaful industry in Malaysia are currently developing proposals for the next phase of the liberalisation of the motor and fire tariff targeted for the second half of 2020, it said.

“This is as part of the reforms to enhance the sustainability, as well as to preserve the overall stability in the insurance and takaful market.

“This multi-stakeholder effort includes a review on the NCD’s structure for greater flexibility and responsibility by all parties, to encourage safer driving by rewarding good road behaviour.”

NCD is a vital part of car insurance and is extended when an insurance holder does not make any claim during the in-force period. As such, when he/she renews the insurance for the next 12-month period, he/she is entitled to this NCD.

The ministry said the effort is also aligned with the Ministry of Transport’s Road Safety Plan 2014-2020, with the aim of reducing the number of deaths and serious injuries by 50% by 2020.

It said the phased liberalisation of the motor tariff, which started in July 2016, introduced two significant changes.

These changes are flexibility for insurers and takaful operators to offer new motor products and add-on covers not defined under the previous tariff system, as well as flexibility for premium rates for motor comprehensive, and motor third party fire and theft products. – December 23, 2019.