24th May 2010

Bank Negara Malaysia
Jalan Dato' Onn
P.O. Box 10922
50929 Kuala Lumpur
Attn; Miss Koid Swee Lian, Director of Consumer and Market Conduct Datin Mokhzidah Mokhtar, Deputy Director of Consumer & Market Conduct Department

PARS WORKSHOP CONFERENCE ON 22/05/2010
FAWOAM had taken a proactive role and organized a face-to-face conference on 22nd May 2010 in Thean Hou Temple Hall, opened to all PARS repairers from all over the nation to discuss the situation they are facing in the current stage.

During the conference, the majority of the PARS repairers have given a full mandate to endorse the resolutions as follow;

1. PARS repairers request all insurance companies to standardize and pay RM45.00 labour rate per hour and follow “FAWOAM COLLISION REPAIR INDUSTRY GUIDE TO RETAIL CHARGES 2009”. The current practice of giving the labour rate at RM20 – RM25 have been remain unchanged for the past 15 years which no longer reflect the current economy of wages scale. The workshop repair industry have endorsed that the RM45.00 labour rate per hour should be reasonable compared to the franchise rate of RM60.00 labour rate per hour which most of the insurance companies are willing to pay.
2. PARS repairers request all insurance companies to standardize the practices and can only impose maximum 15% trade discount on spare parts. The workshop repair industry respect the insurance companies have the responsibilities on cost controlling, however the industry have voiced out the trade discount imposed by insurance companies at the range of 20% - 30% have going overboard and indirectly have forced the repairers to short-change the consumers.
3. PARS repairers request BN & MRC to produce OD approval & supplementary approval period / aging reports to share among stakeholders for verification and show the transparency of the current practices for check and balance. The repairers are also the major contributor of the data and their right of sharing certain information should not be denied.
4. PARS repairers request BN & MRC to inform software houses to add on or produce an extra column to show adjusters’ recommended cost of repairs to reflect the independent parties view and transparency for check and balance.
5. PARS repairers have rejected the newly provisions implemented by PIAM;
   • Section B – Terms and Conditions of PARS Application (ITEM No. 9, ITEM No. 10, ITEM No. 16)
   • Selection Procedures (ITEM No. 3)
   • Increase size of workshops set up and storage area

PIAM has been given high autonomy to manage the motor insurance claim repair industry to their favour rather than looking into consumers’ interest, safe repair methods and repairers’ livelihoods. An organization should have the social responsibility to improve the standard of the whole motor insurance claim repair industry by looking into different aspects such as raising the industrial repair standard based on method of repairs, technical improvements, cars’ structure integrity for consumers’ interests and safety, rather than just cost controlling and impose irrelevant additional terms to their favour.

FAWOAM is acting on behalf of the overall PARS workshop repairers to voice up their grievances on the current motors claims practices. In view of this, we wish to seek for your assistance to intercept and resolve the problem. Therefore, we would like to request an urgent appointment with you to discuss on this matter.

Thank you.

Yours truly,
Kong Wai Kwong  
FAWOAM President