JAKARTA (TheInsiderStories) – After experiencing a default, the Financial Services Authority (FSA) issued a Business Activity Restriction sanction to Indonesian life insurance firm, PT Asuransi Jiwa Kresna or Kresna Life, said the regulator last week. The company is unit of Kresna Group owned by local entrepreneur, Michael Steven.
“After the imposition of this sanction, Kresna Life Insurance is prohibited from carrying out new coverage activities for all business lines for the insurance company from August 3, 2020 until the recommendation of the our examination results is fulfilled,” said the agency in an official statement on Friday (08/14).
Previously, FSA had conducted an inspection which was carried out in February 2020. During the examination, the regulator found a number of violations committed by Kresna Life, especially on K-LITA products. Of these violations, the agency carried out supervisory measures including requiring the company to pay claims that have been submitted by policyholders.
In addition, FSA has also ordered the firm to prepare a financial restructuring plan that includes financial restructuring measures for the insurer, the commitment of controlling shareholders to overcome the company problems, as well as a detailed claim payment plan. The agency also asked the companies that are included in the Kresna Group to open as wide a communication as possible to policyholders.
Early of August, Kresna Life has officially appointed an independent consultant to assist the policyholder’ claim settlement process. Insurance claims were recorded of Rp216 billion (US$14.69 million).
“We are committed to be ready to undergo this process with our advisory team with the ability and track record that we believe can support us in providing the best solution to the existing situation,” said the management on August 3.
Its holding PT Kresna Graha Investama Tbk (IDX: KREN) is an invesntmen company and has invest in various startup in Indonesia and abroad. Founded in 2,000, the issuer offered investment management, securities brokerage and underwriting.
In 2015, Steven reinvented the company with the establishment of its tech incubator and investment division Kresna Creativentures, which has now become the company’ growth driver. One success story is PT M Cash Integrasi Tbk (IDX: MCAS), a company started in 2010 that operates digital and physical kiosks selling various services such as top-ups of prepaid phone cards, tickets for amusement parks, electronic bill payment and e-commerce shopping.
M Cash has 1,000 kiosks in stores across Indonesia and aims to have 10,000 by the end of 2020. Its subsidiaries, PT Digital Mediatama Maxima, a digital cloud firm, aims to release 25 percent of its shares, and looks to raise Rp400 billion (US$28.57 million).
Kresna Creativentures has also made two investments into the Singapore-based financial technology, MatchMove Pay in the first in 2017 and a second in 2018.
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