It has taken Banak Negara Malaysia a full seven months to give some disclosure to the public on its proposals to dramatically change the motor insurance coverage and payments to accident victims and their families. And it is clear that these details are very preliminary and subject to further discussions with the concerned stakeholders.

Firstly, I am relieved that BNM has seen the light and has finally engaged with the concerned stakeholders.

Certainly the proposed limit of RM2 million is much more reasonable than the figure of RM100,000 that was previously talked about. However, I am sure there will be sub-limits indicating the range of payments to be made for the possible range of injuries that may be sustained. It is necessary that a mechanism is also put in place so that the overall limit and sub- limits are periodically examined to see that these amounts are realistic based on the increases in inflation and cost of living.

Regardless of whether these changes are finally adopted by the government, the crucial issue in settlement of claims is the receipt of full documents. Even BNM’s new proposal for speedy settlement states that settlement is estimated to be 2 to 4 weeks upon receipt of full documentation. That is the problem faced by many accident victims. It takes months (if not years) to get police reports and the outcome of police investigations on an accident.

It also takes months (if not years) to get hospital reports on the injuries sustained by accident victims or post mortem reports. Indeed, it is a well-known fact that a certain large government hospital in the Klang Valley takes about two years to issue a medical report.

Before implementing any new scheme, and if BNM truly wants speedy settlements to be the order of the day, there must be a marked improvement in the delivery service of the police and the government hospitals on the outcome of police investigations and the preparation of hospital reports relating to accident cases. I am not blaming the police or the hospitals – they have their priorities and their limitations. These limitations have to be addressed be it in terms of manpower, resources and skills, so that delays referred to above can be overcome.

Another point to note is that in view of the delays in obtaining these documents, accident victims and their families are under grave financial stress. Many accident victims are from the low- income group or contract workers/daily paid workers. The reality of the situation is that at present, many of these victims and their families rely on the lawyers who are handling the accident cases to pay for medical and surgical bills including expenses for plating and implants due to certain orthopedic injuries.

In fact, for those who cannot work for months, the lawyers handling the accident cases even assist in their day to day expenses. If the new scheme comes into play and lawyers are not to have a role, is the government or the new company to be established prepared to pay these expenses pending the settlement of the insurance claims? If not, how are these accident victims and their families going to cope? This is a critical issue for the lower income group and must be addressed before any new scheme is implemented.

Further, who will do the running around to get police reports, hospital reports and specialist medical reports (presently done by the lawyers handling the matter) so that all these are put forward to ensure that accident victims are adequately compensated? In view of the efficiency of the present system (or rather the inefficiency), some one has to liaise with the relevant parties, compile the documents, obtain further documents (if necessary) and obtain views of medical specialists.

Reports of medical specialists are often necessary so that the person assessing the claim can understand the full impact and effect of the injuries. Is the accident victim or family member of a deceased accident victim able to do all this? And if lawyers are no longer to be involved, who will ensure that all these documents are complied and made available? I do not think that the insurance company/new company to be formed will bother to obtain documents which will increase the compensation that would be payable.

I also understand from recent newspaper reports that the insurance companies themselves will continue to play a role including assessing the claims made by accident victims and their families. It is a well-known fact that some insurance companies take years to process claims. The continued role of insurance companies in assessing claims in the new proposal of BNM will not assist in a speedy settlement of claims.

On the present proposal of BNM, it is also necessary to know who will run the separate company that will be entrusted with considering the claims and making the payments? Will this be done in an open and transparent manner? The last thing we want is a situation where, for certain reasons, legitimate claims are rejected and again, for certain reasons, fraudulent claims accepted.

BNM has focused on the need for the present changes apparently due to insurance companies making losses in the motor insurance sector. This should not be the principal focus of BNM. BNM should instead focus on the needs of the ordinary motorist. Further, BNM has not disclosed the source of its information that for every RM1 earned in policy claims, RM2.70 is paid out by motor insurance companies.

The question I have is whether in determining this statistic, BNM is taking into account the entire premium paid by motorists or only an allocated portion of the premium paid by motorists? If the latter is the actual situation, then this statistic of BNM is not reflective of the true situation. I trust that BNM can clarify this position.

Instead of putting into place a wholly new system, I would suggest that we look at the existing system. Things have changed for the better in the past few months. The courts under the revitalised leadership of Zaki Tun Azmi have taken bold steps in expediting the disposal of cases. The impact of these is already felt – there is much faster settlement of claims and/or disposal of claims.

But there is a need to further improve the present system. One area would be on the amounts that lawyers can take as fees and disbursements. I am aware that the Bar Council is taking steps to put in place a scale of fees for lawyers involved in personal injury matters. This will ensure that lawyers are fairly compensated for their services but not to the detriment of the accident victim.

The need to improve the efficiency of the police and the hospitals in making available reports and the outcome of investigations remains imperative, regardless of whichever system is in place.