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Jiwasraya could have knock-on effect on financial sector
Jiwasraya has been in the spotlight since it announced its failure to pay out on matured JS Saving Plan policies worth Rp 802 billion (US$57.6 million) in October 2018.
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Office of state-owned insurance company PT Asuransi Jiwasraya in Jakarta (kontan.co.id/Cheppy A Muchlis)
H
igh-ranking officials have expressed concern that the fiasco at state-owned insurance company Asuransi Jiwasraya will undermine faith among the public and investors in the country’s financial institutions.
State-owned Enterprises Minister Erick Thohir gave an assurance on Thursday that the government would take several measures, including establishing an insurance holding company, to ensure Jiwasraya has sufficient cash flow to gradually pay out on its customers’ matured policies.
“We will try to [make the payments] as we don’t want public trust to dissipate while we are talking about [attracting] investment,” he told reporters in Jakarta.
“We know that our economic growth is high but we don’t have good corporate governance. How can the public trust [Indonesia’s financial system]?” he added.
Jiwasraya has been in the spotlight since it announced its failure to pay out on matured JS Saving Plan policies worth Rp 802 billion (US$57.6 million) in October 2018. It was also unable to pay out on policies, which integrated life insurance and investments, worth Rp 12.4 trillion when they fell due in December 2019.
The Attorney General’s Office (AGO) has launched a corruption investigation into Jiwasraya over alleged mismanagement and has slapped travel bans on 10 individuals, although none of these has been named a suspect.
According to documents obtained by The Jakarta Post, the insurers failed to create portfolio guidelines that regulated how it should manage its investments.
