THE long-running issue of rising motor insurance premiums is about to be heard in the highest forum in the land.
Mr Yeo Guat Kwang, a Member of Parliament for Aljunied GRC and head of the Consumers Association of Singapore (Case), is seeking legislative support for fundamental changes to motor insurance laws and practices here.
When Parliament sits later this month, Mr Yeo will propose that a task force be formed to look into the issue, with representatives from stakeholders like the General Insurance Association (GIA), Automobile Association of Singapore and motor workshops.
'We are checking with the Land Transport Authority and Monetary Authority of Singapore for resource people,' he said.
A key change Case is exploring is whether Singapore can adopt the so-called no-fault regime. In such a system, motorists involved in accidents file claims against their own insurers, regardless of whose fault it is.
This does away with third-party claims, seen by many to be the main cause of escalating claims.
Asked whether such a system would penalise good drivers, Mr Yeo said: 'Isn't that what's happening now? The claims we see now are caused mainly by a small group of drivers.'
Motor insurance premiums have been climbing steadily. The average rate in 1998 was $672, while claims amounted to $375 million. Last year, premiums averaged $1,013, while claims hit $741 million.
Premiums are expected to rise substantially this year. NTUC Income, the top motor insurer here, has raised some rates by more than 30 per cent, while No.2 AIG has increased its premiums by 17 per cent. They blame high claims for the increases.
Mr Yeo told The Straits Times that Case is not pushing for a no-fault regime per se.
'There is no straightforward solution. We need to look at an overall review of the industry,' he said, adding that other changes will have to be made to make a no-fault regime work.
One possible change: making sure that those making accident statements tell the truth - or face legal action.
There are no statistics on false accident claims, although insurers reckon such cases have become more common in the last three years.
Police have no arrest figures, but said they are investigating one case in which a motorist went one step further: producing a false witness to make a fraudulent claim.
Mr Yeo is also proposing that Singapore update its 60-year-old laws governing motor insurance claims.
GIA president Derek Teo points to one main weakness of the law: the three-year window for submitting bodily injury claims.
This has to be shortened, he said, adding: 'If you delay, you're blocking early investigations, and there might be loss of evidence.'
The GIA president said there are lessons to be learnt from countries which have adopted the no-fault regime, and 'tweaks' must be made to make it work here.
Mr Tan Kin Lian, former chief executive of NTUC Income, said a no-fault system would work best for injury claims.
He said most injury claims here involve lawyers and often take years to settle, adding that legal fees could even account for up to a third of the payout.
The no-fault system practised in Sweden - similar to the workman's compensation system - could work here, he suggested.
'It allows for the compensation to be paid more promptly and fairly, and reduces the litigation cost.'
For property damage claims, Mr Tan, now an active social advocate, said third-party claims should still be allowed, but the claims must be made 'directly with the insurance company, prior to arranging the repair of the vehicle'.
This will allow insurers to inspect the accident vehicle and ascertain the damage. Currently, it is not uncommon for workshops to submit claims after a vehicle has been fully repaired.
Motorists are of the view that more can be done to lick the problem of fraudulent claims.
IT manager Roger Tan, 55, said: 'To prevent accident-prone drivers from getting away cheap, a national bureau of insurance register, funded by insurers, can be set up to track all accident claims.
'This will prevent frequent insurance claimers from jumping to another insurer and starting all over again.'
