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Jakarta Post

Government to launch insurance holding company this month following Jiwasraya case

Ailing Jiwasraya, however, has yet to be included in the holding company.

Riska Rahman (The Jakarta Post)
Jakarta
Wed, February 5, 2020

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Government to launch insurance holding company this month following Jiwasraya case A woman walks in front of state-owned insurance company PT Asuransi Jiwasraya on Jl. Juanda, Jakarta, on Dec. 11, 2019. (Antara/Galih Pradipta)

T

he State-Owned Enterprises (SOEs) Ministry is set to establish an insurance holding company in February to help transform the country’s state-owned insurance firms following a financial fiasco at state-owned insurer PT Asuransi Jiwasraya.

Deputy Minister Kartika “Tiko” Wirjoatmodjo said on Wednesday that the holding company would be launched later in February and is to be led by state-owned financing firm PT Bahana Pembinaan Usaha Indonesia. Other state-owned insurance firms such as Jasa Raharja, Asuransi Jasa Indonesia (Jasindo), Perum Jaminan Kredit Indonesia (Jamkrindo) and Asuransi Kredit Indonesia (Askrindo) are be incorporated under the holding company.

Ailing Jiwasraya, however, has yet to be included as the ministry needed to discuss the matter further with the Finance Ministry and the Financial Services Authority (OJK), Tiko said.

“The holding company is not just for saving Jiwasraya, but to strengthen the insurance industry’s transformation starting from its finance, risk management, investment management and product management to its actuarial aspects so we won’t repeat the same mistakes as Jiwasraya did with its JS Saving Plan product,” he told the press in Jakarta.

Jiwasraya was also unable to pay holders of policies worth about Rp 16 trillion (US$1.16 billion) that were supposed to be paid as of January, prompting the Attorney General’s Office (AGO) to launch a corruption investigation.

The AGO in January arrested five people, including the insurer's former boss and two businessmen, for their suspected roles in alleged corruption at Jiwasraya.

Tiko also said the holding company would later help pay for Jiwasraya’s policyholders’ claims. However, he refused to reveal more details as the ministry still needed to talk with the House of Representatives’ working committee on Jiwasraya before deciding how to provide the necessary funds for the troubled insurer.

“We still need to have political support from the working committee,” he said.   

As for the claims payment, Tiko said the ministry would prioritize payments for conventional life insurance policies claims held by 4.7 million customers.

“We will then pay for the JS Saving Plan claims gradually,” he said without providing more detail on how much the first batch of payments would be.

 

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