Bank Negara Malaysia has issued the Policy Document on Claims Settlement Practices (PD CSP). This policy document sets out the minimum standards on the handling and assessment of general insurance and general takaful claims. This must be met by licensed insurers carrying on general business and licensed takaful operators carrying on general takaful business (ITOs) as well as registered adjusters.

The PD CSP aims to ensure fair, transparent and timely outcomes in claims settlement practices through the imposition of regulatory requirements and expectations for ITOs and registered adjusters. This is to observe high standards of sound and responsible business conduct.

Another key objective of this policy document is to promote wider adoption of digital solutions by ITOs to reduce frictions, enhance efficiencies and improve customer experience. This in turn will facilitate better management of claims costs and containment of fraud risk(s) by ITOs. In addition, this will contribute to continued access to affordable motor insurance/takaful by consumers in the long run.

Highlights
Key enhancements to the policy document with respect to motor claims, aimed at achieving the desired outcomes and ensuring positive consumer experiences, include the following requirements for ITOs on:

1. the roles and responsibilities of Board and Senior Management with respect to claims settlement practices;
2. the need to publish and prominently display a Motor Consumer Service Charter (MCSC) in all of its branches and websites. The MCSC will outline, amongst others, turnaround times consumers can expect for their motor claims and criteria and thresholds for expedited claims, where applicable;
3. shortened turnaround time for its motor and non-motor claims settlement process;
4. enhancing transparency in motor repair estimates by making assessments and recommendations of registered adjusters or in-house assessors accessible to repairers;
5. maintaining high standards of professionalism and conduct for its in-house assessors. The ITO must ensure that its in-house assessors are adequately qualified and competent to perform objective assessments of motor claims and receive relevant training to stay updated with the latest technical, technological, environmental, and other developments in the motor ecosystem;
6. advising policy owners/takaful participants with comprehensive coverage on the benefits and option to submit an Own Damage Knock-for-Knock (OD KfK) claim to expedite claims processing;  
7. ensure proper handling and assessment of Actual Total Loss (ATL) and Beyond Economic Repairs (BER) vehicles, including applying ATL and BER as distinguishable terms, consistent with its corresponding definitions; and
8. ensure fair treatment of consumers who purchase BER vehicles with respect to access to insurance/takaful coverage.

Issuance Date
1 July 2024

Effective Date
2 January 2025 except for the following paragraphs, which will come into effect on 1 July 2024:

1. paragraphs 10. 26 to 10.28;
2. paragraphs 11.16 to 11.18;
3. paragraphs 12.1 to 12.13;
4. paragraphs 14.1 to 14.5;
5. paragraphs 14.11 to 14.26;
6. paragraphs 15.1 to 15.27; and
7. paragraphs 16.1 to 16.6.

Documents

• Policy Document on Claims Settlement Practices
• Frequently Asked Questions on the Policy Document
• Feedback Statement on the Exposure Draft

Issuing Department
Jabatan Konsumer dan Amalan Pasaran