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Jakarta Post

Government readies insurance holding company to save Jiwasraya by February

  • Marchio Irfan Gorbiano and Riska Rahman

    The Jakarta Post

Jakarta   /   Thu, January 16, 2020   /   11:22 am
Government readies insurance holding company to save Jiwasraya by February State-Owned Enterprises Minister Erick Thohir. (JP/Seto Wardhana)

The government plans to establish a state-owned insurance holding company next month in an effort to inject money and save state-owned insurer PT Asuransi Jiwasraya.

State-Owned Enterprises Minister Erick Thohir said on Wednesday that the holding company is expected to be established in mid-February.

“The holding company’s papers had just been signed and we have to follow the steps of forming the holding company accordingly as part of our suggestion in handling Jiwasraya’s case,” he said at the Presidential Palace in Jakarta.

The holding company is projected to have a total of Rp 1.5 trillion (US$109.7 million) to Rp 2 trillion in “cash flow”, Erick said, adding that it would be used to help the ailing insurer improve its finances.

Erick said additional funding would likely come from the sales of the insurer’s stocks worth an estimated Rp 2 trillion to Rp 3 trillion and from strategic partners of subsidiary Jiwasraya Putra that could give the insurer an additional Rp 1 trillion to Rp 3 trillion in fresh funds.

“The pooled funds will later be used to pay for the policyholders’ claims gradually,” he said, adding that the ministry is working closely with the Finance Ministry to “return” Jiwasraya’s policyholders’ money.

Erick, along with the Finance Ministry, is also to discuss these measures with the House of Representatives during its upcoming hearing on Jan. 20.

Jiwasraya met with trouble following an announcement in October 2018 that it had failed to pay out maturing JS Saving Plan policies worth Rp 802 billion. It was also unable to pay holders of policies worth Rp 12.4 trillion that were supposed to be paid in December 2019.

The Attorney General's Office arrested on Tuesday five people for their suspected roles in the alleged corruption at Jiwasraya. The five people included former Jiwasraya president director Hendrisman Rahim, former finance director Harry Prasetyo and the former head of the investment and finance division, Syahmirwan.

Publicly listed property firm PT Hanson International president director Benny Tjokrosaputro and publicly listed PT Trada Alam Minera president commissioner Heru Hidayat were also named suspects and arrested in the case.