The Attorney General\'s Office has issued a travel ban for 10 people allegedly involved in corruption in Jiwasraya. In the midst of the investigation, the protection of customer rights must be a priority.
A woman walks in front of the Jiwasraya Insurance office on Jl. Juanda in Jakarta on Dec. 11 (11/12/2019).
JAKARTA, KOMPAS – The investigation into alleged corruption in state insurance company PT Asuransi Jiwasraya (Persero), which is estimated to have caused financial losses amounting to Rp 13.7 trillion (about US$978 million) for the state, has begun.
The Attorney General\'s Office has issued a travel ban for 10 people, including two former president directors of Jiwasraya, Hendrisman Rahim and Asmawi Syam and former chief commissioner Djonny Wiguna to prevent them from leaving the country.
In the midst of the investigation, the government should protect and guarantee the rights of the company’s customers affected by the financial trouble.
Speaking at his office in Jakarta on Friday, Attorney General Sanitiar Burhanuddin said he had sent the travel ban against the 10 people to the Directorate General of Immigration at the Justice and Human Rights Ministry on Thursday.
"We will definitely investigate this case thoroughly," said Burhanuddin. In addition to the two former president directors and former chief commissioner of the insurance company, there were seven other people who were also prevented from traveling abroad for the next six months. They were identified only as DYA, HP, MZ, GLA, ERN, HH and BT.
We will definitely investigate this case thoroughly.
The probe into Jiwasraya\'s alleged corruption was raised to the level of an investigation on 17 Dec. 2019 through Investigation Order Number 33/F2/Fd2/12 2019. However, in the letter, the suspects were not named.
The junior attorney general for special crimes, Adi Toegarisman, said there was a possibility that some of the 10 people who have been banned from traveling overseas would become suspects of the corruption in Jiwasraya.
According to Adi, the examination of witnesses would be carried out in January 2020. As many as 24 people are scheduled to be questioned as witnesses in this case, including the 10 people who are now on the travel ban list.
"Later, it will be checked alternately. The questioning has been scheduled to take place on January 6, 7 and 8, "Adi said.
Earlier, Burhanuddin said there were investment irregularities conducted by Jiwasraya. The majority of investments were placed in unreliable institutions. So far, the state loss from the case is estimated at Rp 13.7 trillion.
ANTARA FOTO/APRILLIO AKBAR
Attorney General ST Burhanuddin (right), accompanied by the head of the Legal Information Center, Mukri, gives a press statement related to the handling and development of the investigation into alleged criminal acts involving financial management and investment fund management at PT Asuransi Jiwasraya at the Attorney General\'s Office in Jakarta on Wednesday (18/12/2019).
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On Friday, Asmawi Syam, who served as the president director of Jiwasraya from August to November 2018, said that the investment-linked insurance product called the JS Saving Plan offered by Jiwasraya since 2012 was problematic. The yield offered was too high, while the investment risk was fully borne by the insurance company.
With a minimum investment of Rp 100 million, JS Saving Plan policyholders received a 13 percent return in 2013. The investment return was gradually reduced to 9 percent in 2018. The JS Saving Plan expires in just one year, but policyholders receive life insurance coverage for five years.
"This condition has created a mismatch between company assets and liabilities. Investments also cannot be disbursed because share prices have plummeted and are not liquid," Asmawi said.
In October 2018, Asmawi announced that Jiwasraya had failed to pay JS Saving Plan policy claims worth Rp 802 billion. Jiwasraya\'s funds were no longer sufficient to pay back the JS Saving Plan policy, which was due every year.
According to Asmawi, Jiwasraya\'s investment management has been problematic for years. Investments obtained from new policyholders were not placed into investment instruments, such as shares or mutual funds, but were instead used to pay off the insurance policies that had matured.
The galilubang tutu plubang, which literally means dig hole, cover hole (similar to robbing Peter to pay Paul) scheme was undertaken after assets in the stock market plummeted. The investment manager placed the funds in shares that were not prospective and were illiquid.
The customers must be protected.
Based on infographics made by the State-Owned Enterprises (SOE) Ministry, Jiwasraya has had a liquidity problem since 2006. Jiwasraya\'s equity in December 2006 suffered a deficit of Rp 3.29 trillion.
The Supreme Audit Agency (BPK) issued an audit report on Jiwasraya for its 2006 and 2007 financial statements with a disclaimer of opinion.
Jiwasraya\'s equity deficit rose to Rp 6.3 trillion in 2009. Jiwasraya\'s financial problems were overcome by reinsurance and asset revaluation policies. Equity had a surplus of Rp 800 billion, but this figure was artificial because it did not reflect the actual condition.
In a meeting with Commission VI of the House of Representatives on Dec. 16, 2019, the president director of Jiwasraya, Hexana Tri Sasongko, said that the insurance company had failed to settle customer policy payments worth Rp 12.4 trillion as of December 2019.
Andre Rosiade, a member of the House’s Commission VI, said that in order to find the solution to Jiwasraya problems, Commission VI and Commission XI of the House would hold a meeting with SOE Minister Erick Thohir, Finance Minister Sri Mulyani, the Financial Services Authority and Jiwasraya’s board of directors.
The vice chairman of the House’s Commission XI, Fathan Subchi, said customer confidence must be restored. One thing that needs to be done is to ask for a postponement of the payment of claims by large corporations so that the cash problems can be resolved, he added.
"The customers must be protected. They should become the government’s priority. All the financial obligations should be gradually settled," he said.
A House Commission III member, Arsul Sani, said he believes that the Jiwasraya problem must be settled under the framework of corporate law, financial and accounting aspects and criminal law. Criminal proceedings can be carried out if the case was caused by fraud, corruption, or embezzlement.
