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The nine recommendations by the Motor Insurance Taskforce to tackle “critical issues” to address premium increases averaging 21 per cent last year are a positive step towards that financial relief for drivers, yet the need for two further moves stand out.

First, fast yet considered action on the more straightforward recommendations could save drivers money.

It seems surprising that some of the recommended actions were not in place already. For example, surveyors are paid a percentage of the amount they estimate a repair bill cost. The higher the estimate, the more they make.

While practices may vary, it’s easy to see how paying surveyors more if they recommend more costly repairs could result in higher costs. The Taskforce recommended that surveyors should be paid a flat rate.

The Taskforce also recommended that making false accident reports and touting be made criminal offences. Here, too, it seems that penalties for both actions should be severe.

Lying about accidents has been blamed for everything from higher costs to unnecessary court cases, and touting could easily result in unnecessarily costly repairs or litigation. It’s easy to see how these actions, too, could result in higher premiums.

PS:  Are they ALL  LIARS  in this process ? ? ? ?

It took about six months for the Taskforce to come up with its recommendations.

While discussions about more complex recommendations like consumer education or a no-fault claims system could take longer, making the more straightforward changes faster could benefit consumers tremendously.

The Taskforce pointed out, though, that the next step is for “all stakeholders to play their part to deal with the issues”.

Already, the wrangling over the recommendations has begun. The chairman of the Singapore Automobile Appraisers Association has come out opposing flat rates, as one might expect.

Lawyers or auto repair centre staff who rush to the scene of an accident minutes after it happens might raise objections too. Proposals for changes in regulations have not been publicised yet. Meantime, though, consumers are still paying the higher rates.

While making FRAUD a more severe offence and reducing the incentive for higher repair costs won’t necessarily bring premiums down 21 per cent right away, if the changes make even a 10 per cent dent in premiums they could quickly save consumers over $100 million per year and put part of that $190 back in drivers’ pockets.

Second, if seemingly reasonable practices like these weren’t already in place for motor vehicle insurance, could proactive reviews of other types of insurance to root out similar issues stave off higher costs too?

The General Insurance Association said that claims for Work Injury Compensation Insurance increased by 18.5 per cent last year, for example, while premium income dropped 3 per cent. The sector slipped from a slight profit in 2008 to a $12.2 million loss last year. The increase in claims and decrease in premiums occurred even as workplace safety education programmes continued to proliferate.

Even though there may not be glaring gaps that caused the increase in claims, the size of the rise could indicate that insurance premium increases may lie ahead.

The Motor Insurance Taskforce could serve as a model for setting up similar forums to tackle issues proactively rather than waiting for costs and claims to rise abruptly.

“General insurance” includes personal accident, health, travel, property and business insurance too. While rates for these types of insurance have not spiked like motor insurance, working proactively to avoid false claims or inflated assessments could also avert higher costs.

Setting up the Taskforce to tackle rising motor insurance claims after massive increases was indeed a good move. The task ahead now is to make rapid yet considered changes quickly. Any results achieved could greatly benefit consumers and companies in other areas of insurance.

I REFER to “COEs the next lightning rod?” (April 8).

It is heartening to know that Government Parliamentary Committee chairman (Transport) Lim Wee Kiak realises the increased Certificate of Entitlement (COE) premiums could be seen as a “cost of living issue” for current and future car owners and that any price increase, be it COE or HDB prices, will have a “political implication”.

Indeed the perceptions for most Singaporeans is that the cost of living is much higher and has increased faster than salaries have. This is especially the case when the economy is just coming out of the worst recession in decades and many companies are exercising wage restraint.

However, Dr Lim goes on to add that the Government “has done its part” to tackle people’s concerns and to explain the rising car prices. In this regard, more can be done to ensure the cost of living is moderated and that sudden increases are tempered by a properly regulated system.

As it stands now, the COE bidding system is an unfair one. It is largely monopolised by car dealers and speculators, leaving no room for the car owner to bid for his own COE.

A simple solution is to have car owners bid for their own COE before buying a car.

The desires of a car dealer to make a fat profit by closing his car bookings should be taken out of the COE equation.

It is inequitable that the consumer is made to pay for the greed of car dealers and speculators, who often spread rumours and create fear in the car buyers that if they do not act “now”, they will pay higher prices later.

COE bidding now is as simple as going to the ATM to punch out the amount you wish to bid. The amount which the car buyer is prepared to pay should be the only determining factor of the COE prices.

The current COE system is lacking in this respect.