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Govt injects $1.5b to save Jiwasraya amid controversies
State-owned insurance holding company PT Bahana Pembangunan Usaha Indonesia (BPUI) president director Robertus Biliteus said on Sunday the funds would be injected into BPUI in two tranches, in 2021 and 2022.
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A man shows state-owned insurer PT Asuransi Jiwasraya's android application on his smartphone in Jakarta, Feb. 14, 2020. (JP/Jerry Adiguna)
T
he government and the House of Representatives have agreed to a Rp 22 trillion (US$1.49 billion) state capital injection to rescue ailing state-owned insurance company PT Asuransi Jiwasraya.
State-owned insurance holding company PT Bahana Pembangunan Usaha Indonesia (BPUI) president director Robertus Biliteus said on Sunday the funds would be injected into BPUI in two tranches.
“The government will inject Rp 12 trillion in 2021 and the remaining Rp 10 trillion in 2022, with the funds to be used to form a new state-owned life insurer, namely IFG Life,” he said during a virtual press briefing.
All of Jiwasraya’s restructured policies would then be transferred to and settled and managed by IFG Life. The policies include Jiwasraya’s traditional and JS Saving Plan products, he said.
Jiwasraya is embroiled in a corruption and money laundering case following its failure to pay out Rp 18 trillion in matured policies due in May to its policyholders. The Attorney General’s Office (AGO) accuses the insurer of investment mismanagement when it invested its premium revenue from the JS Saving Plan, one of the company’s unit-linked products, in pumped-and-dumped stocks.
Robertus went on to say that the newly established firm would also provide other insurance products, such as health insurance and pension funds, that would focus on protection rather than investment.
“We’re currently in the process of establishing IFG Life and we hope we can get a permit from the Financial Services Authority (OJK) by December,” he said.
