Paying Out on Jiwasraya Customers’ Policies a Priority

KOMPAS/PRIYOMBODO

Two employees of PT Asuransi Jiwasraya walk past the state insurer’s logo at its Jakarta office on Thursday (9/1/2020). A 2018 investigation into Jiwasraya by the Supreme Audit Agency (BPK) uncovered corporate fraud that incurred losses for both the company and the state. The State-Owned Enterprises Ministry is backing the efforts of the BPK and the Attorney General\'s Office in resolving the case, with a focus on strengthening the company.

The government says that it will prioritize paying out on customers’ policies in its effort to resolve the financial troubles of state-owned insurer PT Asuransi Jiwasraya (Persero). Consequently, legal and economic resolutions in the case will be done in parallel.

JAKARTA, KOMPAS — Paying out on PT Asuransi Jiwasraya customers’ policies will be the government’s priority. The fund for the payout will be sourced from corporate restructuring and asset confiscation.

President Joko “Jokowi” Widodo said that he targeted to pay out on Jiwasraya customers’ policies that had fell due, even if this would take a long time. The estimated payout is huge as Jiwasraya has been mismanaged since 2006.

“My target is that [the case] is resolved. This is the important thing, especially for smallholder customers,” the President said in Jakarta on Friday (17/1/2020). He said that he was convinced the payout and a restructuring of Jiwasraya would restore public trust in the insurance industry.

Jiwasraya is among Indonesia’s largest life insurance companies with around 5.2 million policy holders. Due to mismanagement, corruption and a series of investment management fraud, a recent audit shows that Jiwasraya suffered a loss of Rp 15.83 trillion (US$1.16 trillion) in 2018 and negative equity of Rp 27.7 trillion as of November 2019.

Due to a lack of liquidity, Jiwasraya failed to pay out a total of Rp 12.4 trillion in claims that fell due on December 2019. In 2020, another Rp 3.7 trillion of claims will reach their dues. Until the end of 2020, the total claims that fall due at Jiwasraya will reach Rp 16.1 trillion.

To resolve the Jiwasraya case, including paying out on customers’ policies, the President has instructed that economic and legal resolutions be done in parallel. The President ordered the Finance Minister and the State-Owned Enterprises Minister to restructure Jiwasraya and obtain funds for the payout. Legally, the President ordered the Attorney General to immediately resolve the corruption, including investigating the suspects’ assets as evidence in the case.

KOMPAS/ALIF ICHWAN

An official checks cars at the parking lot of the Attorney General’s Office (AGO) in Jakarta on Friday (17/1/2020). The AGO confiscated five cars and one Harley Davidson motorbike from Syahmirwan, a suspect in a corruption case involving PT Asuransi Jiwasraya. Later, the AGO team confiscated two cars and several documents.

Source of funds

The Finance Ministry reaffirmed that paying out on Jiwasraya customers’ policies would not rely on a bailout fund. Instead, it will be done through a business-to-business (B2B) scheme. Consequently, resolving the Jiwasraya case will not burden the state budget.

Finance Ministry state wealth director general Isa Rachmatarwata said that the restructuring of Jiwasraya would aim to ensure policy continuity. Thus far, selling Jiwasraya’s shares in its subsidiary Jiwasraya Putra to strategic investors is the most viable option.

Jiwasraya Putra was established in September 2019 in cooperation with several state-owned enterprises. These are state telecommunications company PT Telekomunikasi Indonesia Tbk (Persero), state-run pawnshop PT Pegadaian, state railway company TP Kereta Api Indonesia (Persero) and state lender PT Bank Tabungan Negara Tbk (Persero).

“By selling its shares in Jiwasraya Putra, Jiwasraya will obtain new funds to pay out on customers’ policies that had fell due,” Isa said.

According to him, it is possible that the amount of funds from the selling of shares will still be lacking. The State-Owned Enterprises Ministry is trying to find other fund sources to prepare for that, including by forming an insurance consortium that will take over some of Jiwasraya’s insurance policies.

Asset confiscation

Regarding the investigation into alleged corruption at Jiwasraya, the Attorney General’s Office (AGO) has raided the house of a suspect in the case, namely Syahmirwan, in Duren Sawit, East Jakarta.

AGO spokesperson Hari Setiyono said that the raid at the former Jiwasraya investment and finance division head’s house was conducted on Thursday, from the afternoon to midnight.

After the raid, prosecutors confiscated a black Toyota Innova with license plate number B 26 YRA and a black Honda CR-V with license plate number B 1065. “Prosecutors also confiscated land certificates and several documents, such as insurance policies and deposit account statements,” Hari said.

Prosecutors have also asked the Financial Services Authority (OJK) to freeze the suspects’ bank accounts as well as corporate accounts linked to them.

So far, the AGO has confiscated seven cars and a Harley Davidson motorcycle belonging to the suspects. Prosecutors have also requested the National Land Agency to freeze 156 plots of land belonging to tycoon Benny Tjokrosaputro, a suspect in the case. Prosecutors have also asked the Financial Services Authority (OJK) to freeze the suspects’ bank accounts as well as corporate accounts linked to them.

The AGO has named five suspects in the case, namely Jiwasraya former president director Hendrisman Rahim, Jiwasraya former finance and investment director Harry Prasetyo, PT Trada Alam Minera Tbk commissioner Heru Hidayat, alongside Benny and Syahmirwan.

Trisakti University criminal law lecturer Abdul Fickar Hadjar said that the AGO sought and confiscated the Jiwasraya suspects’ assets as they are allegedly the result of corruption. When the case goes to court, the assets will be treated as evidence.

Fickar continued that, should the trial declare the suspects guilty, the assets would be confiscated to compensate for state losses. “The confiscated assets will then be returned to Jiwasraya as a state-owned enterprise and the company will then pay out on customers’ policies,” he explained.

KOMPAS/TOTOK WIJAYANTO

A security guard stands in front of the office of PT Asuransi Sosial Angkatan Bersenjata Republik Indonesia (Asabri) in Cawang, Kramat Jati, East Jakarta, on Wednesday (15/1/2020). The policyholders of PT Asabri are Indonesian Military (TNI) and National Police personnel, as well as civil servants at the Defense Ministry and the National Police.

Asabri

Coordinating Political, Legal and Security Affairs Minister Mahfud MD said that there were strong allegations of deviations at PT Asabri, another state insurer and pension fund manager for military and police personnel and Defense Ministry employees. This was seen in Asabri’s capital decrease of between Rp 17.4 trillion and Rp 17.6 trillion in one year. An investigation is under way in the case.

Nevertheless, Mahfud said that Asabri policy holders should not worry as the company’s liquidity was strong enough to pay out on customers’ claims.

(KRN/JUD/INA/NTA/DIM/FAI)