JAKARTA (TheInsiderStories) - The new state-owned insurance and guarantee company, Indonesia Financial Group (IFG), to manages Rp72.5 trillion (US$4.93 billion) of assets, said the management on Oct. 21. As known, the government has picked financial firm, PT Bahana Pembinaan Usaha Indonesia (BPUI), as the new holding company of the state-run insurance firms.
According to IFG director, Rizal Ariansyah, the government had issued regulation Number 20 of 2020 in March, the insurer directly supervised four state-owned companies like PT Asuransi Jasa Raharja, PT Asuransi Jasa Indonesia, PT Asuransi Kredit Indonesia, and PT Jaminan Kredit Indonesia. Now, total equity the parent company worth of Rp36.7 trillion from initially Rp1.3 trillion.
Indonesian government has announced to inject fresh capital worth of Rp22 trillion to state-owned insurance firm, PT Asuransi Jiwasraya through BPUI. The funds will distribute in two stages, Rp22 trillion in 2021 and Rp10 trillion in 2022. After get the injections, the new insurance holding will creates IFG Life.
The new entity will receives the transfer of insurance policies from Jiwasraya. As for the JS Saving Plan Policy, the transfer is carried out in the form of cash without interest for the long term period and for a shorter term could applying a haircut to the cash value. Based on the document of the meeting, it was stated that the decision is expected to provide certainty for the fulfillment of obligations to the policyholders who are willing to participate in the program.
According to the deputy minister of state own enterprises, Kartika Wirjoatmodjo, the management of Jiwasraya would begin the restructuring starting November and is expected to be completed in March 2021. He explained, until July 2020, the negative equity value in Jiwasraya had reached Rp37 trillion.
The supreme audit agency calculating the potential loss for the bribery scandal on the insurance firm reaced Rp16.8 trillion. Currently, there are six defendants in the case awaiting charges at the Central Jakarta District Court.
The new insurance holding company was experiencing liquidity difficulties caused of the corruption cases and can not fulfill their obligations since 2018 due to the JS Saving Plan product cases. As of May 31, 2020, the debt claims from the products recorded Rp16.5 trillion originating from 17,452 participants.
While, claims payable from traditional corporate customers amounted to Rp600 billion and retail customers totaling Rp900 billion. As part of the the insurer rescue, in July 2020, other state insurance firm, PT Taspen Life has acquired 70 percent shares of PT Asuransi Jiwasraya Putra from the parent for Rp2.6 trillion. The other shares bought by state lender, PT Bank Tabungan Negara Tbk (IDX: BBTN).
Beside set up the new insurance firm, the company also intended to launch financial reinsurance in this quarter, joined with international reinsurance companies. Now, Jiwasraya is still waiting for a business permit from the regulator.
The company was built from a very long history, starting from Nederlandsch Indiesche Levensverzekering en Liffrente Maatschappij van 1859 on Dec. 31, 1859. The first life insurance company in Indonesia (the Dutch East Indies at that time). On Dec. 17, 1960 the company was nationalized based on Government Regulation Number 23 of 1958 by changing its name to PT Djiwa Sejahtera Insurance Company.
Based on Government Regulation Number 214 of 1961, nine life insurance companies owned by the Netherlands were merged into the state insurance firm PT Djiwa Eka Sedahteraa (Djiwasraya). Then, based on Government Regulation Number 33 of 1972, Djiwasraya changed its status to become a PT Jiwasraya Insurance. And, on August 21, 1984 the company became Asuransi Jiwasraya.
US$1: Rp14,700
Written by Staff Editor, Email: theinsiderstories@gmail.com
