KUALA LUMPUR: The Malaysia Competition Commission (MyCC) says it has given more time to the General Insurance Association of Malaysia (Piam) and its 22 general insurer members, whom it is planning to penalise for allegedly being parties to an anticompetitive deal, to respond to its proposed RM213.45 million fine.

In a short WhatsApp message, a MyCC spokesman said the deadline to respond to the proposed penalty issued on Feb 22 has now been extended to April 25. The insurers originally had 30 days to make their representations to MyCC from the date the proposed decision was received.

However, the spokesman did not respond when asked why the extension was given.

When MyCC issued the proposed penalty, it had accused the insurers of having engaged in price-fixing activities in the agreement between PIAM and the Federation of Automobile Workshop Owners’ Association of Malaysia (Fawoam).

It said PIAM members had fixed trade discounts for parts of certain vehicle makes, and fixed hourly labour rates for workshops under the PIAM Approved Repairers Scheme.

However, Bank Negara Malaysia came out to defend Piam and the 22 general insurers, calling the proposed decision by MyCC as “most unfortunate”, and will “severely impact consumers’ interests”.

The central bank also clarified that the agreement between Piam and Fawoam was put in place in response to a directive from the bank to the insurers in 2011 to address disputes between workshops and general insurance companies over insurance claim payments for motor repairs.

Hence, it stressed that the agreement, which it had described as necessary to reflect reasonable costs of repairs in an environment where motor insurance premiums are regulated via tariffs, was for the benefits of the public.

Piam also issued a statement urging the commission to reconsider its proposed penalty, and said it would obtain legal advice to defend its position that the arrangement was not an anticompetitive agreement.

In response, MyCC reiterated that the penalty it proposed was not final, and invited the firms to adduce fresh evidence to show that they were not in breach of the Competition Act 2010.