Liga Asuransi – Hello risk takers, in the third week of January 2024, we will discuss the world of insurance again, because insurance is not only limited to vehicles and life, especially for business protection coverage, insurance still has a very wide reach. In this third week of January 2024, we are again collecting 7 selected news related to insurance that are good for you to know.
As always, if you are interested in this article, please share it with your colleagues so they can understand it as well as you.
Jiwasraya Customers Who Reject Restructuring Ask for Premium Refunds Without Deductions
PT Asuransi Jiwasraya (Persero) customer representatives, who have an inkracht decision, are demanding Jiwasraya management to resolve the problems of customers who reject the restructuring program. The Jiwasraya customer who decided to inkracht, Machril, asked Jiwasraya to return the premium money that had been paid without deductions, with a premium value of IDR 500 million belonging to Yachiyo Ishibashi, his wife.
Machril hopes that Jiwasraya will immediately fulfill its obligations in accordance with statutory regulations. He referred to OJK regulations which state that insurance companies must pay claims no later than 30 days after an agreement is reached, including in cases of refusing restructuring. However, Machril claims that Jiwasraya has not fulfilled this obligation.
As a solution, Machril proposed that Jiwasraya’s payment obligations be returned to Bank BRI, the party that offers bancassurance products. “Please return our money to BRI. That is one solution, it is said that it is difficult to reduce the burden. The total is IDR 500 million,” said Machril.
The meeting between Machril, representatives of Jiwasraya, and the Directorate of Separated State Assets DJKN Ministry of Finance Qoswara was held at the Ombudsman. Machril said that Jiwasraya did not carry out its obligation to pay rejected claims, and he hoped that this problem would be resolved immediately according to regulations.
Plt. Jiwasraya’s Main Director, R. Mahelan Prabantarikso, after the meeting, was reluctant to comment regarding the meeting and action plan requested by the regulator regarding policyholders who rejected the restructuring program.
OJK previously asked Jiwasraya shareholders, commissioners and directors to prepare a follow-up action plan regarding policy holders who refused to restructure their policies to PT Asuransi Jiwa IFG (IFG Life). Until December 2023, there were still 0.49% of policies that rejected Jiwasraya’s restructuring to IFG Life with claims reaching around IDR 187 billion. OJK emphasizes the need for an action plan from policyholders who do not agree with the restructuring.
KPK Begins Investigating Alleged Insurance Corruption at PT Pelni Regarding Commission Payments
The Corruption Eradication Commission (KPK) has started a new investigation regarding alleged corruption at PT Pelni (Persero) related to the procurement of goods and services and payment of shipping insurance commissions during the 2015-2020 fiscal year. Head of KPK News, Ali Fikri, stated that this case involved alleged bribery which cost the state tens of billions of rupiah.
Ali Fikri explained that the modus operandi in this case allegedly involved violating the law under Article 2 or Article 3, which was detrimental to state finances. Although he did not provide further details regarding this case, Ali said that initial evidence showed significant state financial losses.
This investigation process has involved summoning several witnesses, and the Corruption Eradication Commission has also named several suspects in connection with this case. Ali Fikri emphasized that further details, including the chronology and identity of the suspect, will be officially announced during the investigation process and when the detention is carried out.
With the development of this case, the Corruption Eradication Commission continues to carry out investigative steps to uncover further allegations of corruption related to shipping insurance commission payments at PT Pelni during the 2015-2020 fiscal year period.
Insurance Company Owner Affected by Failure to Pay Case: Evelina Pietruschka Fugitives, Michael Steven Chased for Compensation
Recent insurance failure cases have claimed thousands of victims, and the spotlight is now focused on the company owners or leaders who should be responsible for customer losses. The Financial Services Authority (OJK) identified 11 insurance companies under special monitoring, and a number of them are still of concern to the OJK.
In this particular case, Wanaartha Life is in the big spotlight because it is related to total managed funds of IDR 17 trillion. Company owners, including Manfred Armin Pietruschka and Evelina Larasati Fadil, are suspects. Evelina, who is also President Commissioner of Wanaartha, and her family are known to have fled to the United States, becoming fugitives from Interpol.
On the other hand, Kresna Life, which is affiliated with the Kresna Group, recorded a total loss of around IDR 6.4 trillion. Michael Steven, owner of the Kresna Group, who also serves as Chair of the Maritime & Fisheries Financing Policy Committee at the Indonesian Chamber of Commerce and Industry, is now being sought by the OJK to compensate the victims.
In total, losses from these two cases reached IDR 23.4 trillion. The OJK and other legal efforts continue to hunt down the owners or leaders of the companies responsible for the insurance failure to pay cases.
OJK Reminds 15 Insurance Companies That Don’t Have Company Actuaries Strict Sanctions and Monitoring Are Implemented
The Financial Services Authority (OJK) issued a warning to 15 insurance companies that still do not have an appointed actuary. OJK emphasizes that the existence of an appointed actuary is a necessity in carrying out insurance business activities. According to the Chief Executive of the OJK Insurance, Pension Fund and Guarantee Supervisor, Ogi Prastomiyono, this is important so that companies can manage their assets and liabilities optimally.
OJK stated that the need for appointed actuaries is not only related to numbers, but also involves increasing the competence and integrity of actuaries. The insurance industry is currently facing great pressure from market competition and the implementation of PSAK 74. The latest OJK data shows that of 145 insurance and reinsurance companies, 130 or 89.6% have company actuaries. However, there are still 15 companies or 10.4% that have not met the requirements or submitted a request for a company actuarial fit and proper test.
OJK emphasized the obligation to fulfill the appointed actuary and said that supervisory measures would continue to be carried out. Necessary steps will be taken to ensure healthy growth of the insurance industry in the future, with adequate risk and wealth management. As an initial action, OJK has implemented a First Warning Sanction against general insurance companies that do not yet have a company actuary.
OJK also invited the Indonesian Actuaries Association (PAI) to increase their commitment in carrying out actuarial professional certification exams every month. Fulfillment plans submitted by general insurance companies will be monitored periodically, and OJK plans to increase warning sanctions against companies that have not been able to fulfill the obligations of company actuaries.
OJK Increases International Cooperation in the Insurance Sector to Strengthen the Industry
The Financial Services Authority (OJK) has established a partnership with two Korean institutions, namely the Korea Deposit Insurance Corporation (KDIC) and the Korea Insurance Development Institute (KIDI), with the aim of expanding international cooperation in the insurance development sector. This collaboration focuses on strengthening financial infrastructure through developing a Financial Safety Net in the insurance sector as well as building a technical database for risk assessment and setting premium rates.
Deputy Chairman of the OJK Board of Commissioners, Mirza Adityaswara, said that the partnership with KDIC involves information exchange, collaboration on cross-border issues, employee exchange, human resource capacity development, and other areas of cooperation as agreed. Meanwhile, the collaboration with KIDI aims to increase collaboration, especially in developing risk profile databases and determining insurance premium rates, joint research and increasing capacity in the insurance sector.
OJK also synergized with the Organization for Economic Co-operation and Development (OECD) to release a study on the use of technology in the insurance sector to improve risk assessment and reduce policyholder risk. In line with these international steps, OJK has issued the latest regulations, such as POJK Number 23 of 2023 concerning Business and Institutional Licensing of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies and Sharia Reinsurance Companies. This regulation aims to strengthen capital and institutional capacity in the insurance industry and provide legal certainty through a more effective licensing mechanism.
Apart from that, OJK also issued POJK Number 24 of 2023 concerning Business and Institutional Licensing of Insurance Broker Companies, Reinsurance Broker Companies and Insurance Loss Appraisal Companies. Some of the main points in this regulation include improvements related to reporting mechanisms and identification of foreign ownership, increasing minimum capital and equity requirements, as well as separating main functions in the organizational structure.
OJK Strengthens the Insurance and Pension Fund Sector with the Issuance of Four Latest POJK
The Financial Services Authority (OJK) is providing significant encouragement to the insurance and pension fund sectors by issuing four new OJK Regulations (POJK) at the end of 2023. These four regulations cover various aspects, including regulation of insurance products related to sharia credit or financing, business permits and insurance company institutions, as well as the implementation of pension fund businesses.
The issuance of this POJK is a concrete step by the OJK in supporting the transformation of the insurance and pension fund sectors. By focusing on increasing capital capacity, it is hoped that this regulation can encourage the industrial sector to be healthier, stronger and able to grow sustainably, making a positive contribution to national economic growth.
Head of the OJK Literacy, Financial Inclusion and Communications Department, Aman Santosa, highlighted limited capital capacity as a crucial issue that has the potential to threaten the resilience and stability of the insurance sector. Therefore, adjusting the provisions for minimum paid-up capital is one of the main focuses of POJK Number 23 of 2023 and POJK Number 24 of 2023, covering new business actors and increasing minimum equity for those who have obtained a business license.
In the context of handling unwise practices in managing insurance product portfolios related to sharia credit or financing, POJK Number 20 of 2023 is expected to encourage more optimal mitigation mechanisms for risk exposure. This involves providing insurance companies with access to credit/financing distribution data, sharing of risk between insurance companies and banks/financing institutions, and determining the maximum limit for credit insurance premiums.
For the pension fund sector, POJK Number 27 of 2023 brings significant changes to investment governance. This includes competency requirements for pension fund administrators and additional provisions regarding the placement of high-risk investments. Updates in the payment of pension benefits are also regulated, allowing periodic payments by pension funds or through the purchase of annuity products.
Aman also emphasized that OJK remains focused on improving regulations related to insurance products and marketing channels. This involves simplifying the mechanisms for approval and recording of insurance products as well as strengthening the internal functioning of insurance companies, with the aim of strengthening prudential aspects and market behavior.
In order to strengthen the guarantee industry sector, OJK plans to organize it by preparing a road map for the guarantee industry and strengthening the regulatory framework related to licensing and business operations in this industrial sector.
With these various changes and initiatives, OJK is committed to creating a supportive and profitable environment for the insurance and pension fund sectors, in line with the vision of national economic growth.
OJK Revokes Business License of PT Futuready Insurance Broker: Company Stops Business Activities
The Financial Services Authority (OJK) announced firm steps by revoking the insurance brokerage business license of PT Futuready Insurance Broker on 21 December 2023. This decision was recorded in the Decree of the OJK Board of Commissioners Number 83/D.05/2023 dated 21 December 2023, as informed in the official announcement OJK on Thursday (11/1/2024). The revocation of this business license was the result of PT Futuready Insurance Broker’s own request which decided to stop its business activities in the insurance brokerage sector.
Asep Iskandar, Head of the Licensing, Special Inspection and Quality Control Department of Insurance, Guarantees and Pension Funds at the OJK, said that PT Futuready Insurance Broker is now prohibited from continuing business activities in the insurance brokerage sector. Apart from that, companies are also asked not to use the terms insurance broker, insurance broker, and other words that characterize insurance broker activities.
The license revocation process also requires PT Futuready Insurance Broker to remove the nameplates at its head office and branches and comply with the rights and obligations in accordance with applicable statutory provisions. In line with the OJK announcement, PT Futuready Insurance Broker also confirmed that the company is in the process of terminating business activities. They apologized and expressed their gratitude to customers who have trusted the company since 2016.
This decision shows the importance of compliance with insurance sector regulations and OJK’s commitment to maintaining the integrity of the insurance industry in Indonesia.
This article is brought to you by L&G Insurance Broker, insurance broker Indonesia..
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