Phased Liberalisation of Motor and Fire Tariffs

This policy document implements the Bank’s initiative to deregulate the pricing of motor and fire products through the gradual disapplication of requirements under the Motor Tariff and Revised Fire Tariff (Fire Tariff). The Tariffs, which have been in place for more than three decades, will no longer be applicable to certain types of motor and fire products as specified in this policy document.

With improvements in financial and risk management practices reinforced by strengthened prudential regulation and supervision, the insurance and takaful industry is on a stronger footing to compete in a more liberalised environment. The flexibility being accorded to the industry is further expected to support greater product innovation for the benefit of consumers.

This policy document sets out requirements for the gradual disapplication of the Tariffs with the aim of promoting orderly conditions under a market-based pricing approach. The requirements in this policy document are intended to ensure that:
(a) the transition to market-based pricing is gradual and supported by prudent risk management and practices;
(b) access to basic protection or compulsory lines remains affordable, and any adjustment to the prices of such products is implemented gradually;
(c) consumers’ interests remain protected through enhanced transparency and improved sales and marketing practices; and
(d) overall stability in the general insurance and takaful market is preserved.

This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking