Portal KSM

The Star - Wednesday, 3 June 2009

BATU PAHAT: The Government should intervene and defer the implementation of direct rebates for motor insurance as this will increase unemployment in the country.

State Unity, Human Resources, Science, Technology and Innovation Committee chairman M. Asojan said the direct rebates would affect the livelihood of thousands of insurance agents nationwide.

“The Government is working hard to ensure that people have jobs during the economic crisis and the last thing we need is a mass lay-off in the insurance sector,” he told The Star here.

Asojan, a former insurance agent, said he understood the plight of the thousands of agents nationwide.

He said the agents provided an array of services including helping with claim forms, advising clients on what to do in road accidents, providing contacts on the nearest workshops and checking on the status of claims.

“Are insurance companies ready with more counters to handle the influx of motorist from July 1?” he aked.

Asojan pointed out that it was the insurance companies’ responsibility to assist the Government in ensuring people had jobs, especially when the Government was trying to kick-start the economy with the two stimulus plans.

“Was there a study done before the General Insurance Association of Malaysia and Bank Negara decided to implement the move?

“What about the consequences of this move on the thousands of agents who have helped the industry?” he said, adding that it should be implemented after taking into account the views of all the parties.

Meanwhile, Human Resources Minister Datuk Dr S. Subramaniam suggested that the insurance agents group together and give their views to the Government as soon as possible.

“I can understand the implications of such a move. It is up to the Ministry of Finance to look into the matter,” he said, adding that he was unsure about the rationale behind the move.

Since the news about the rebate broke, there has been a huge outcry, with some quarters starting a signature campaign and a boycott.

Come July 1, car owners who buy motor insurance directly from insurance companies without an agent will qualify for mandatory rebates of 5% to 10%.