The Phased Liberalisation of the Motor Tariff will be implemented in a phased approach to allow time for consumers and industry to adjust to the new operating environment.
In the first phase, starting 1 July 2016, Takaful Operators progressively offers new products to the consumers at market rates. Existing Motor Comprehensive cover, Motor Third Party Fire and Theft cover and Motor Third Party cover was continued to be made available.
Starting 1 July 2017, contribution rates for Motor Comprehensive cover and Motor Third Party Fire and Theft cover was liberalised.
In parallel, a more gradual upward adjustment similar in quantum to the adjustments of Motor Tariff made from 2012 to 2015 under the framework will be made for some vehicle classes under Motor Third Party cover which remain substantially under-priced (for every ringgit of contribution received, Takaful Operators are paying between RM1.30 to RM3.00 in claims). This is to avoid sharp upward contribution rates adjustments if this class of cover is immediately liberalised.