MyCC Issues Infringemet Decision against General Insurance Association of Malaysia and its 22 members
The Malaysia Competition Commission (“MyCC”) has issued a final decision against the General Insurance Association of Malaysia (“PIAM”) and its 22 members for infringing Section 4(2)(a) of Competition Act 2010. The insurers through PIAM have collectively fixed the trade discount for parts at 25% for six vehicles namely Proton, Perodua, Nissan, Toyota, Honda and Naza and 15% for the Proton Saga BLM model. In addition, the insurers have also set the labour hourly rate at RM30.00 per hour for PIAM Approved Repairers Scheme (“PARS”) workshops.
MyCC imposed a financial penalty totalling more than RM130.24 million against the 22 general insurers with a reduction of 25% for each of the fines after considering their oral and written submission and Covid-19 situation. In the same decision, the MyCC also imposed few other remedies including order to cease and desist from implementing the agreed parts trade discount and labour rate per hour in relation to repairing accident damaged vehicles. Other than that, the future parts trade discount rate and labour rate per hour in relation to repairing accident damaged vehicles should be determined independently by the insurers.
MyCC also granted a moratorium period for the payment of the financial penalty for up to six (6) months, calculated from the service date of the decision. At the end of the moratorium period, the Parties are allowed to make the payment of the financial penalty by equal monthly instalment for up to six (6) months.