T

he insurers of budget airline PT Indonesia AirAsia have prepared Rp 300 billion (US$23.61 million) as a standby fund to be paid to the families of 155 passengers on board AirAsia flight QZ8501 and an additional $46 million for the aircraft.

State-owned PT Asuransi Jasa Indonesia (Jasindo) and private insurer PT Asuransi Sinar Mas, the insurance companies that cover AirAsia flights, allocated the funds based on a 2011 Transportation Ministry regulation that requires insurers to pay claims of up to
Rp 1.25 billion to the next of kin of each passenger.

'€œWe have appointed a solicitor to manage the funds. Both Jasindo and Sinar Mas are currently collaborating with the Surabaya administration and the Financial Services Authority [OJK] to ensure that the funds are given to the right beneficiaries,'€ Jasindo executive director Albertus Patarru said Friday.

Search and rescue efforts, led by Indonesia'€™s National Search and Rescue Agency (Basarnas), are currently underway to retrieve the victims'€™ bodies, the black box and the debris of AirAsia flight QZ8501, which went missing over the Karimata Strait en route to Singapore from Surabaya. On board were 155 passengers and seven crew.

Insurance payments would still be made to the next of kin of victims that had not yet been recovered, according to Albertus.

Victim identification and cross-checking of documents with surviving family members was also being conducted thoroughly to avoid disputes after fund disbursement, he said. '€œWe are trying our best to avoid situations where another beneficiary suddenly comes to us and claims they are the one that should be paid,'€ he noted.

The insurers will shortly disburse funds to beneficiaries who have submitted the required documents and data, with insurance regulator OJK urging the insurers to complete payments no later than this month.

Jasindo is also preparing a claims payment for AirAsia'€™s aircraft.

'€œWe have partnerships with several reinsurance and insurance companies, with Allianz acting as the lead underwriter,'€ Albertus said. Allianz SE is the lead reinsurance firm, which provides financial protection for insurance companies that handle risks that are too large for them.

Apart from the two insurance companies, 25 passengers had travel insurance policies from PT Asu-ransi Dayin Mitra '€” a company that partnered with AirAsia '€” said OJK chief executive for non-bank financial industry supervision Firdaus Djaelani. Dayin Mitra travel insurance was available for passengers to voluntarily take out and was not included in the AirAsia ticket price.

Dayin Mitra would pay one-way insurance claims of Rp 750 million each to the families of 10 AirAsia victims, while the families of 15 passengers who bought return tickets would receive Rp 315 million each, according to Firdaus.

Some passengers had life insurance policies provided by various companies, such as PT Jiwasraya (Persero). '€œWe are calculating the insurance payments, which will amount to more than Rp 100 million per beneficiary,'€ Jiwasraya president director Hendrisman Rahim had said previously.

The OJK and the Surabaya administration would work to ensure that the insurance claims were fully paid to the correct beneficiaries, Firdaus and Surabaya Mayor Tri Rismaharini said Friday during a press conference with executives from the insurance firms.