I AGREE substantially with the report, 'No-fault insurance 'may not always work'' (Oct 16), and wish to add the following:

• The latest Motor Claims Framework (MCF) imposed by insurers stipulates that motorists should report accidents at workshops appointed by insurance companies. Such appointed workshops comprise less than 10 per cent of all workshops.

Most insurance policies require motorists to use these workshops to file an insurance claim.

Channelling work exclusively to these workshops grants an unfair advantage, an effective monopoly to these workshops that may place insurers' interest in cheap repairs above claimants' interests in best repairs.

The selection criteria for these workshops is not standard or transparent, leading to unfair discrimination. Motorists are inconvenienced by limited choice and confused as to which workshops they can use.

• The MCF has probably channelled more than 80 per cent of accident vehicles to these authorised workshops in the past 16 months. If the MCF system and selection criteria were sound, inflated claims should have been significantly diminished. Yet insurers continue the complaint.

• Rather than advocate no-fault insurance, a scheme so complex it requires amendment of current laws, the Consumers Association of Singapore (Case) would do better to investigate the MCF.

Notably, even no-fault insurance jurisdictions implement strict regulations such as anti-steering legislation to prohibit insurers from unfairly channelling business to certain workshops that protect their interests. Such statutes are conspicuously absent in Singapore.

Case should examine the merits of such legislation rather than schemes such as no-fault insurance which have actually resulted in higher premiums in many states.

• Despite variations of systems and policies, premiums continue to increase. Insurers must review claims settlement practices and internal procedures rather than cry fraud without providing any statistics or a detailed breakdown of their loss.

How many such claims were pronounced fraudulent in court? How much insurance revenue was lost to isolated instances of proven fraud? How many times do courts award more than insurers offer? What portion of insurance revenue was lost to bad investments, agents' commissions and administrative costs such as executive bonuses?

These, among many pertinent questions, cannot be ignored while insurers blame their woes on fraud and tar most honest workshops providing excellent and transparent service to their clients with the same brush as a few errant rogues.

Joey Lim
President
Singapore Motor Workshop Association

Also read: No-fault insurance 'may not always work'

This article was first published in The Straits Times.

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