Insurers record growth<\/p>\n
JAKARTA (JP): In spite of the recession, the life insurance
\nindustry in Indonesia grew by 20 percent in 1998 when measured by
\nits premium income, down from 22 percent in 1997, a finance
\nministry official said on Thursday.<\/p>\n
Firdaus Djaelani of the Insurance Directorate also disclosed
\nthe plan to establish a guarantee fund scheme to protect policy
\nholders against insolvent insurance companies.<\/p>\n
He likened this role to that of the government guarantee of
\nall bank deposits against bank closures but said that the fund
\nwould be privately managed eventually.<\/p>\n
Firdaus was speaking to reporters at the inauguration of a
\nsales and service center of PT Asuransi Jiwa Bumiputera John
\nHancock.<\/p>\n
Asked about the government's plan to better secure policy
\nholders by enacting Risk-Based Capital (RBC), he said the
\nenactment of RBC should be gradual so as not to impose too
\nstringent a standard on domestic insurance companies.<\/p>\n
RBC is a strict measurement of an insurance company's solvency
\nrelative to its investment risk.<\/p>\n
"RBC will be 30 to 40 percent effective at the most for the
\nfirst four years in order for companies to adapt to it before
\nthey can meet the criteria of 100 percent," Firdaus said.<\/p>\n
The new Bumiputera John Hancock facility underscores the
\nconfidence of the Indonesian-American joint venture company in
\nprospects in Indonesia. The company boasted a 40 percent increase
\nin its premium income to Rp 25 billion in 1998.<\/p>\n
A branch manager present at the launching said that life
\ninsurance has become an alternative investment instrument to bank
\ndeposits at a time of uncertainties about the safety of the
\nlatter. (02)<\/p>",
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