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Read more news from bernama below about the discussion that will be held to find a solution on rebate for motor insurance.
PERWAKIM, an association of general insurance agents in Malaysia, will meet Bank Negara Malaysia and the General Insurance Association of Malaysia (PIAM) soon to discuss the proposal on direct rebate for motor insurance.
Its president, Liza Lau said the proposal by PIAM to give rebate directly to customers of motor insurance will take effect from July 1, this year.
“Rebates given to customers for direct purchases will of course be detrimental to insurance agents but PERWAKIM is of the firm opinion that neither will they ultimately benefit the customers,” she said at a media briefing here Friday.
There are a total 50,000 insurance agents nationwide, of which 40 percent are full time agents, she said.
Lau said the proposed direct rebates will only benefit insurance companies to the serious detriment of the insured, particularly at a time when the insured require compensation from the insurers.
Looking at the prospect for insurance agents, she said under the current global economic climate, their businesses were practically in crisis.
Yet in the last 20 years, insurance agents had only earned 10 percent commission from the insurance companies, out of which they have to pay staff salaries, rent, transportation, all of which have gone up relentlessly, she said.
“Even now the 10 percent is liable to be forfeited if the proposal goes through that consumers get a discount should they buy direct from the insurance companies, bypassing the agents.
“Agents earn no more than their 10 percent and any reduction in this percentage may be likened to a reduction in salary. Staff of smaller agencies will likely be retrenched with little and no compensation,” she added.
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