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MOTOR INSURANCE CLAIMS New framework impractical and unjustified and Govt should check it I REFER to the new motor claims framework (MCF) imposed by the General Insurance Association (GIA) on Sunday. The total motor premiums collected last year amounted to more than $750 million. Yet, insurers suffered losses of $103 million, resulting in a payout of more than $853 million for their motor business. The association justifies the new framework by blaming non-accredited or independent workshops. But the facts show otherwise. There were more than 150,000 reported accident cases last year. Half the number would be at fault and would have to pay the insurance excess amount for their own damage claims. And those without comprehensive coverage have to pay for their own repairs. Another 30 per cent would arrange for the car agent or the insurers to do the repairs. That leaves only 20 per cent of motor accident repairs which are handled by an owner's preferred workshop. In fact, repair costs by the latter are likely to amount to less than 10 per cent of the total payout by insurance firms for motor claims. Yet, the association chooses to blame the issue of inflated claims on this minority group to justify a new framework which allows insurers to call the shots exclusively. The facts do not square with the GIA's rationale for introducing the MCF and forcing motorists to repair their vehicles at GIA-approved workshops. It is shocking that the GIA is allowed to implement a new MCF. The Monetary Authority of Singapore and anti-competition agencies should address the negative fallout from the new MCF viz: [*]Restricting the car owner's right to choose his own repairer; [*]Inconveniencing a policy holder into lodging a report within 24 hours even if there is no damage to his vehicle; [*]Diverting the repair business to a selected few; Restricting the trade of owner-repairers who comprise 95 per cent of motor workshops; [*]Transgressing the anti-competition act; [*]Penalising motorists if they do not follow the unfair terms by removing their no-claim bonus and denying policy renewals; [*]And forming a cartel to increase premiums. I urge the GIA to be transparent in detailing the actual losses, to study the actual cause of their losses and work with the Singapore Motor Workshop Association to find a pragmatic, fair and reasonable solution for motorists and their preferred workshops. Alan Chuang Managing Director/Accident Analyst, Partners Automotive Consultants http://www.straitstimes.com/ST%2BForum/Sto...ory_244160.html

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