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MPR calls for thorough audit of state-owned insurers following Jiwasraya, Asabri debacle

Jakarta Post - January 13, 2020

Jakarta – People's Consultative Assembly (MPR) Speaker Bambang Soesatyo has called on the Supreme Audit Agency (BPK) to conduct a large-scale audit on every state-owned insurance and pension fund firm in the country.

The move is expected to map out a more feasible investment scheme and prevent liquidity issues.

Bambang said last year's fiasco involving state-owned insurer Asuransi Jiwasraya, which saw the government experience up to Rp 13.7 trillion (US$998 million) in losses, as well as the recently emerged case surrounding another state-owned insurance firm, Asuransi Sosial Angkatan Bersenjata Republik Indonesia (Asabri), which has reportedly caused an estimated Rp 10 trillion in state losses, had prompted him to call for such a measure.

"The BPK must immediately conduct a thorough audit on various state insurers. We wouldn't want Jiwasraya and Asabri's problems to befall other state insurers," Bambang said in a statement on Monday as quoted by kompas.com.

Jiwasraya and Asabri are among seven state insurers in operation alongside PT Jasa Raharja, PT Asuransi Jasa Indonesia, PT Asuransi Kredit Indonesia, PT Asuransi Ekspor Indonesia, and PT Reasuransi Indonesia Utama.

State-Owned Enterprises (SOE) Minister Erick Thohir previously announced a plan to merge all pension funds from state-owned firms under a single state-owned insurance holding company for safe pension fund distribution.

Jiwasraya is being investigated by the Attorney General's Office (AGO) and the BPK after the firm failed to pay Rp 12.4 trillion in matured policies due in December 2019, leading to allegations of investment mismanagement.

The government announced last year that it did not intend to bail out Jiwasraya, which recorded Rp 15.89 trillion in losses in 2018 and losses of Rp 13.74 trillion in the first nine months of 2019, due to the insurer failing to fulfill its payment obligations for policies that had matured.

Meanwhile, Asabri, which manages social insurance and pension funds of personnel of the National Police, the Indonesian Military (TNI) and employees of the Defense Ministry, reportedly lost Rp 10 trillion as several stocks in its portfolio endured losses of more than 95 percent last year.

Bambang went on to say that the BPK should also conduct a similar audit on the Workers Social Security Agency (BPJS Ketenagajakerjaan), considering that the agency was responsible for handling massive public funds.

BPJS Ketenagakerjaan managed Rp 412 trillion of last September, according to him. "Such a considerable amount of funds must be managed carefully and under strict supervision," he said. (rfa)

Source: https://www.thejakartapost.com/news/2020/01/13/mpr-calls-for-thorough-audit-of-state-owned-insurers-following-jiwasraya-asabari-debacle.html