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Jakarta Post

House demands investigative audits on all state insurers

  • Riska Rahman

    The Jakarta Post

Jakarta   /   Thu, February 20, 2020   /   11:54 am
House demands investigative audits on all state insurers A man shows the Insurance Jiwasraya app on his smartphone in Jakarta on Feb. 14. (JP/Jerry Adiguna)

The House of Representatives has called for the Supreme Audit Agency (BPK) to conduct investigative audits on state-owned insurers to assess their investment management.

Members of House Commission VI, which oversees trade, industry and state-owned enterprises (SOEs), are especially eager for the BPK to conduct an investigative audit on state-owned pension insurance company PT Taspen and social insurer Asuransi Angkatan Bersenjata Republik Indonesia (Asabri). The move is meant to prevent the insurers from mismanaging their investments as they manage pension funds for civil servants, police, military and Defense Ministry employees.

An audit differs from an investigation as the former assesses financial statements and forms independent opinions about them. Meanwhile,  an investigation is a comprehensive study of financial reports. 

Commission VI member Mukhtarudin from the Golkar Party also said on Wednesday that the move aimed to prevent the insurers from repeating mismanagement conducted by ailing state-owned insurer PT Asuransi Jiwasraya, which led to negative equity and the inability to pay its policyholders’ claims of Rp 17 trillion.

The Attorney General’s Office (AGO) last month instructed the Financial Services Authority (OJK) and the country’s bourse authorities to block 800 securities accounts as it investigated Jiwasraya’s investment mismanagement, having named five people suspects, including three former Jiwasraya executives and two business tycoons allegedly involved in the corruption case.

Although Asabri could still pay for its claims, its investment mismanagement led the state firm and the government to suffer losses of around Rp 10 trillion.

“The government has to intervene to prevent the same thing from happening again. So, I’m suggesting that Taspen and Asabri undergo investigative audits just like Jiwasraya,” Mukhtarudin said during a hearing with state-owned insurers in Jakarta.

House Commission VI members are also calling for the Development Finance Comptroller (BPKP) to conduct a large-scale investigative audit on Taspen and Asabri, as well as other state-owned insurers, including PT Jasa Raharja, PT Asuransi Jasa Indonesia (Jasindo), PT Asuransi Kredit Indonesia (Askrindo) and PT Reasuransi Indonesia Utama.

The commission’s member from Democratic Party of Struggle (PDI-P), Evita Nursanty, said the House suggested that audits focus solely on the insurer’s investments to assess their prudence in managing their funds. 

“They are managing the public’s funds so they need to be able to manage it in a prudent manner and free from the interests of any parties,” she said.

In the meantime, Taspen president director ANS Kosasih said he was confident that the company would pass the investigative audit smoothly as it had applied independent investment decisions based on the company’s analysis.

“We also asked the BPK to conduct an annual audit on our earnings report to assure that our business is run according to the code of conduct,” Kosasih said.