KUALA LUMPUR (Dec 23): A study on the review of the Motor No-Claims Discount (NCD) is currently being undertaken to instil and encourage good driving behaviour and road safety, according to the Ministry of Finance (MoF).

In a statement today, the ministry said Bank Negara Malaysia, together with the insurance and takaful industry in Malaysia, is currently developing proposals for the next phase of the liberalisation of the motor and fire tariff targeted for the second half of 2020.

It said this was as part of the reforms to enhance the sustainability, as well as to preserve the overall stability in the insurance and takaful market.

It added that this multi-stakeholder effort includes a review on the NCD's structure for greater flexibility and responsibility by all parties, to encourage safer driving by rewarding good road behaviour.

MoF said the effort is also aligned with the Ministry of Transport's Road Safety Plan 2014-2020 with the aim of reducing the number of deaths and serious injuries by 50% by 2020.

The phased liberalisation of the motor tariff, which started in July 2016, introduced two significant changes.

MoF said these changes were flexibility for insurers and takaful operators to offer new motor products and add-on covers that were not defined under the previous tariff system, as well as flexibility for premium rates for motor comprehensive, and motor third party fire and theft products.