Tuesday, August 20, 2013

‘Govt-backed firm hogging insurance business’ | Free Malaysia Today

‘Govt-backed firm hogging insurance business’

Anisah Shukry | August 20, 2013-FMT
The Education Malaysia Global Services (EMGS) is anti-competitive and turning foreign students away from Malaysia, claims DAP.
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PETALING JAYA: DAP is demanding that the Competition Commission dissolve government-backed company Education Malaysia Global Services (EMGS) for monopolising medical packages, leaving some 200 insurance agents allegedly out of business.

EMGS was set up in April 2012 to market and promote education in Malaysia for international students.
Serdang MP Ong Kian Ming alleged today that EMGS is abusing its position by forcing the foreign students to buy mandatory medical insurance from just one insurance company: AXA-Affin.

“By making AXA-Affin the only provider of medical insurance for foreign students, EMGS has effectively cut out the hundreds of individual agents involved in the same business,” he told a press conference here.

He estimated that the market was worth at least RM42 million a year.
He said EMGS was violating the Competition Act 2010 and alleged that the Competitions Commissions had yet to act against it despite receiving numerous complaints.

Section 4(1) of the Act states: “A horizontal or vertical agreement between enterprises is prohibited insofar as the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services.

Section 10(1) states: “An enterprise is prohibited from engaging, whether independently or collectively, in any conduct which amounts to an abuse of a dominant position in any market for goods or services.”
“Given the many sections of the Competitions Act 2010 which EMGS has seemingly violated, it should be declared as anti-competitive by the Competition Commission and dissolved,” said Ong.

Insurance agent Pee Che Yong, who was present at the press conference, said EMGS’s actions had resulted in a loss of some RM30,000 annually for each agent.

“Since the implementation of this exclusive tie-up from February 2013, all insurance agents are losing their business immediately.

“Right now, more than 200 agents are affected. And based on a circular distributed by the Education Ministry, they are expanding this monopoly to language centres, to private schools, international schools… it’s set to affect a lot of people,” said Pee.

He told reporters he had turned to the Competition Commission, General Insurance Association of Malaysia, and the Education Ministry since January, but had received no concrete response.

‘EMGS a burden to foreign students’

EMGS was also forcing international students to undergo their mandatory health screening at only 62 clinics nationwide.

He pointed out the “disturbing” fact that 50, or 86%, of those “approved” clinics were part of the Qualitas Medical Group.

“In other words, if you are one of the thousands of foreign students studying in the Subang Jaya area, you would have no choice but to visit one of the Qualitas’ clinics to get your health screening.
“You are unnecessarily narrowing the choice for students, and forcing them to travel to specific clinics when there is perhaps a perfectly competent clinic already nearby their homes.”

He said the resulting deal saw Qualitas Medical Group raking in some RM22.5 million a year from this, as each medical checkup costs RM250.

Meanwhile, apart from restricting competition and violating the Competition Act 2010, EMGS also imposes additional costs on the foreign students as well as the local universities, said Ong.

Students are now charged a RM1,000 student visa processing fee, with a yearly renewal fee of RM140, but with no increase in the efficiency of services, he said.

“The promise to reduce student visa processing time from 6 to 8 weeks to just 14 days under EMGS has not materialized,” claimed Ong.

“As a result of the increased costs and the delays in student visa processing, it has been reported that many foreign students are finding Malaysia to be less attractive as a destination for further studies.”

He noted that this was contrary to the fact that EMGS was set up to attract more students to study in Malaysia.

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