The Chairman of the General Insurance Association of Brunei
Darussalam, Mr Paul Kong, in response to RTB Consumer Focus,
published in the Weekend Bulletin dated Feb 22, 2003, has stated
in a letter that the report is "grossly exaggerated".
Following is the full text of
the letter sent to the Borneo Bulletin yesterday:
"On behalf of the General
Insurance Association of Brunei Darussalam (GIAB), I write in
response to the article mentioned above, for the purpose of
providing clarification to the general public as your article
has inaccuracies.
"Your report on an
increase in car insurance premium of 50% or more is grossly
exaggerated. The insurance industry has in place a guideline for
calculating motor premium that has not changed dramatically over
the last 12 years.
"Motor vehicle premiums
are calculated based on several factors. There are the sum
insured, the engine capacity, the make, model and age of the
vehicle, and its claims history. As an example, the base rate
(minimum premium for the first $1,000 sum insured) for a
comprehensive private motor cover for a vehicle having an engine
capacity of up to 1,400 c.c. has remained at $226 since 1991.
Any amount above the first $1,000 cover is chargeable at $26 per
$1,000. Again this has not increased since 1991.
"It is highly unlikely
that business houses will use insurance (although there is no
actual increase) as an excuse to pass on the cost of business to
consumers, as insurance cost usually constitutes a minimal
percentage of their overhead. For example, the premium for a
Toyota Kijang, engine capacity 1,800 c.c., year 2000 model, with
a sum insured of $20,000, and 50% NCD entitlement will be
$386.00 for the year, which works out to be $1.06 per day. This
is the same cost as in 1991. If the vehicle is insured on a
third-party basis, the cost of insurance is $105.00 for the
year, or only 29 cents a day.
"The above matter was
raised several months ago and has been addressed in an article
published in your newspaper on 27th November 2002 entitled
'Motor Insurance Premiums Back to Pre-95 Levels' by Azaraimy Hj
Hasib"
"As explained in the news
article, insurance companies between 1995 till early 2002
allowed heavy discounting on motor premiums. These were given in
good faith in the face of increased motor vehicle prices because
the increase in import duties in early 1995. Now that the motor
vehicle prices have returned to pre-1995 levels, these extra
discounts have been discontinued.
"We trust you will publish
this information in tomorrow's newspaper."
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