PETALING JAYA: Tune Protect Group Bhd’s 83.26%-owned Tune Insurance Malaysia Bhd is facing a penalty of RM3.61 million after the Malaysia Competition Commission (MyCC) found it was among one of the 22 general insurance companies allegedly in breach of the Competition Act 2010.
Tune Insurance and the 21 other companies are members of the General Insurance Association of Malaysia (PIAM), which faces a consolidated penalty of RM213.45 million, Tune Protect said in a filing with Bursa Malaysia yesterday.
The letter from MyCC was received by Tune Insurance on Feb 22 containing the proposed decision, it said.
PIAM is involved in an ongoing investigation into an agreement it had entered into with the Federation Of Automobile Workshop Owners’ Association Of Malaysia (FAWOAM) for trade discount rates applicable to parts of certain types of vehicles and agreed labour rates for PIAM approved repairer’s scheme workshops.
According to Tune Protect, PIAM engaged with FAWOAM to resolve issues concerning the trade discounts and hourly labour rates. The rates were subsequently issued via PIAM’s members’ circular and were adopted by members including Tune Insurance.
“The proposed decision is not conclusive as PIAM members have been given an indulgence of time to file their respective written representations to defend their position,” Tune Protect said.
“The company and Tune Insurance, in consultation with their legal counsels, will take all necessary and appropriate actions to defend that it has not infringed Section 4(2) of the Competition Act and at all times maintain that Tune Insurance acted in accordance with the directives issued,” it said.
Separately, MyCC chief executive officer Datuk Abu Samah Shabudin confirmed it had indeed issued the proposed decision on Feb 22 against PIAM and its 22 members for fixing the parts trade discount at 25% for six vehicle makes, namely Proton, Perodua, Nissan, Toyota, Honda and Naza, and at 15% for the Proton Saga BLM model.
He also alleged that they had fixed the labour hourly rate at RM320 per hour for PIAM approved repairs scheme workshops.
He said MyCC proposed to impose various remedies including financial penalties against the 22 general insurers, adding that it is allowed to do fine up to 10% of the worldwide turnover of each enterprise under the law.
Apart from Tune Insurance, the other 21 are: AIA Bhd, AIG Malaysia Insurance Bhd, Allianz General Insurance Company (M) Bhd, AmGeneral Insurance Bhd, AXA Affin General Insurance Bhd, Berjaya Sompo Insurance Bhd, Chubb Insurance Malaysia Bhd, Etiqa Insurance Bhd, Liberty Insurance Bhd, Lonpac Insurance Bhd, MSIG Insurance (M) Bhd, MPI General Insurans Bhd, Overseas Assurance Corp (M) Bhd, Pacific & Orient Insurance Co Bhd, Progressive Insurance Bhd, Prudential Assurance Malaysia Bhd, QBE Insurance (Malaysia) Bhd, RHB Insurance Bhd, The Pacific Insurance Bhd, Tokio Marine Insurans (Malaysia) Bhd and Zurich Insurance Malaysia Bhd.
The proposed decision sets out the facts on which MyCC makes its assessment and the reasons why the decision was arrived.