Don’t go it alone MMIP, work with SPADPOSTED BY Nigel Andretti ON 01 February 2016
By Y S CHAN
THE majority of the 47,441 buses in the country are insured by the Malaysian Motor Insurance Pool (MMIP) as most general insurance companies decline to insure them, particularly those with poor claims records.
So it is no suprise that MMIP’s recent announcement to have all its relevant customers install its selected telematics-based insurance product has raised a furore.
MMIP was formed in 1992 to provide the minimum (third party) motor insurance cover required by law for owners who are unable or have difficulty in securing motor insurance from the normal market.
All general insurance companies operating in the country are required to share losses in this pool as decreed by Bank Negara.
MMIP must have initiated this ‘black box’ project In an attempt to cut mounting losses.
It told bus operators that their insurance would not be renewed after February 1 unless their buses were fitted with a monitoring device by an appointed vendor.
As well, operators would have to cough up to RMup to RM2,500 for installation of each monitoring device plus RM900 annually in maintenance.
MMIP also said the telematics device must be installed by its sole partner – Vehicle Telematics Online Services Sdn Bhd (VTOS), at least two weeks before the renewal date of the motor policy.
Unlike taxis, it is not easy to stop buses from running as operators would also have to seek approval from the Land Public Transport Commission (SPAD) to suspend services.
However, it would be unfair for insurers to lump all buses as high-risks as not all of them are.
Moreover, there are different types of buses such as stage, express, excursion, chartered, workers or school buses.
Over the past decades, those attempting to introduce ‘black boxes’ for commercial vehicles have been dismissed by the public as nothing more than moneymaking projects.
Stage bus operations are loss making as they are required to run on unprofitable routes, and fares have to be kept low as the majority of the passengers can not afford to travel in taxis or buy their own cars.
Stage buses are critical for large number of residents through their extensive networks and more commuters ride in them than trains.
As it costs the government much less to subsidise private stage bus companies than to expand government-run bus services, the “Interim Stage Bus Support Fund” was set up from January 2012.
While stage bus companies are on life-support, MMIP seems keen to draw blood from these ailing patients.
Previously, many buses had been fitted with a Global Positioning System, allowing SPAD to monitor and track them.
Surely this is known to MMIP so what is the justification for another monitoring device?
If MMIP requires funding, it should turn to government agencies such as Bank Negara and enlist the support of SPAD, instead bleeding stage bus operators.
Just like the Automated Enforcement System, vehicle telematics is also an effective measure to promote road safety but without seeking the necessary buy-in, the resultant public outcry is no suprise.
MMIP has said that as a high risk insurance pool organisation, it introduced the safety measure to safeguard the millions of passengers, “by introducing Insurance telematics to identify and monitor every driver in control of its insured vehicles on a 24/7 basis”.