ISM Insurance Services Malaysia Bhd (ISM) has advised consumers to verify their eligible No Claim Discount (NCD) on their motor insurance when purchasing or renewing their policies.

"Consumers can save up to 55 per cent on their motor insurance premium by verifying their current NCD via SMS," said Carl Rajendram, chief executive officer of ISM.

ISM has since 2007 been developing a system for insurance and takaful operators to verify the NCD of their customers. The system encompasses information from all companies and ensures that consumers enjoy the discounts to which they are entitled.

"In the past, it was common practice for consumers to pay the full premium without NCD until such time that the NCD was verified by the previous insurance company. Often times the consumer never received a refund of premium while the insurance company never received the full premium payment. This was tantamount to insurance fraud. However, both insurers and consumers had no further recourse," said Rajendram.

The ISM-NCD System aims to put a stop to this unethical practice by allowing consumers to verify their NCD via SMS and download a NCD verification statement online.

Every motor insurance policyholder has an NCD for each vehicle that they own. Each year that they do not make a claim, the discount increases until it reaches the maximum. For private cars, the maximum is 55 per cent whereas for motorcycles, it is 25 per cent.

"The objective of the ISM-NCD System is to improve efficiency in the industry while also reducing the opportunity for fraud. Consumers, insurers and takaful operators stand to benefit by using the system," Rajendram said.

As at today, the system covers 99 per cent of insurance and takaful policies in Malaysia. Two more companies are expected to start using the system in the next few months which will make the system coverage 100 per cent.

Consumers can check their NCD via SMS by sending NCD to 39993. The system will provide the current NCD as well as a pass key to download an online report. Each SMS is charged RM1.

ISM Insurance Services Malaysia Bhd is a financial services shared services provider. It is an MSC-status company and has been certified as an ISO/IEC 27001:2005 company for Information Security Management System (ISMS).

ISM's services include knowledge management, fraud management, automotive intelligence and electronic exchange systems. For further information please visit www.ism.net.my or contact 03-2260 3289.