Adrian Wail Akhlas, Jakarta – The Financial Services Authority (OJK) is planning to reform the regulation and supervision of the nonbank financial industry following the revelation of alleged corruption at ailing state-owned insurer PT Asuransi Jiwasraya.
OJK chairman Wimboh Santoso said on Tuesday the reforms would strengthen the country's financial sector, adding that the authority would need support from the government, business players and the World Bank.
"We will reform the regulations and supervision by enhancing precautionary measures, improving risk management and developing risk-based supervision," Wimboh told House of Representatives Commission XI overseeing financial affairs in Jakarta.
The authority, he said, would accelerate the reforms starting this year and aim to conclude them by 2022.
Wimboh announced the reform plans in front of President Joko "Jokowi" Widodo during the financial services industry's annual meeting in Jakarta in January, saying the overhaul has been planned for a long time before Jiwasraya's financial problems surfaced.
Jiwasraya announced in October 2018 that it had failed to pay out maturing JS Saving Plan policies worth Rp 802 billion (US$58.7 million). It was also unable to pay holders of policies worth Rp 12.4 trillion that were supposed to be paid in December last year, prompting the Attorney General's Office (AGO) to launch a corruption investigation.
The AGO in January arrested five people, including the insurer's former boss and two businessmen, for their suspected roles in alleged corruption at Jiwasraya.
Wimboh on Tuesday told lawmakers that the OJK would also prepare a regulation to establish a policy guarantee agency and a more sophisticated information system to better supervise the industry.