Bank Negara sets new claims standards for insurers

It also promotes the adoption of digital solutions to enhance efficiency.

The Bank Negara Malaysia (central bank) released the Policy Document on Claims Settlement Practices (PD CSP), which unveils the insurance industry’s minimum standards when handling and assessing claims (general and general takaful).

The PD CSP aims to ensure fair, transparent, and timely claims settlements by imposing regulatory requirements and expectations. 

It also promotes the adoption of digital solutions to enhance efficiency, reduce fraud risk, and improve customer experience, thereby maintaining affordable motor insurance and takaful for consumers.

Key enhancements include:

• Clear roles and responsibilities for Board and Senior Management in claims settlement.
• Mandatory display of a Motor Consumer Service Charter (MCSC) outlining expected turnaround times.
• Shortened turnaround times for motor and non-motor claims.
• Transparency in motor repair estimates.
• High standards of professionalism for in-house assessors.
• Guidance on Own Damage Knock-for-Knock (OD KfK) claims to expedite processing.
• Proper handling of Actual Total Loss (ATL) and Beyond Economic Repairs (BER) vehicles.
• Fair treatment for consumers purchasing BER vehicles.

The policy is effective from 2 January 2025, with certain provisions starting on 1 July 2024.