Sat, 06 Aug 1994

Astek plans to collect on insurance premium due

JAKARTA (JP): The state insurance company PT Astek has warned some 20,000 companies who owe them Rp 64.5 billion in arrears to pay up, pay hefty interest, or face prosecution.

Astek's operation director Boedi Maryoto told reporters yesterday that the company is bent on collecting all the arrears for the premium on its Jamsostek, the social security program for its workers.

Most of the companies who are not meeting their monthly obligations are located in Jakarta, Boedi said. The Rp 64.5 billion are the arrears for between six to 14 months.

Astek will first impose two percent interest on the amount owed by each company, and if this still does not compel them to pay, Astek will initiate court proceedings, he said.

Company owners may face a maximum penalty of Rp 50 million or six months imprisonment for breaking the 1992 law on the social security program.

Some 50,000 out of 148,000 companies in Indonesia have enlisted their workers under the Jamsostek program. Astek, which has a virtual monopoly in the business of workers' insurance, has collected a total of Rp 1.7 trillion in insurance premiums.

Boedi said these companies have no reason not to pay, especially since they have been given a long grace period. The only excuse is if they go bankrupt.

The premium each company pays towards insuring their workers went up when Astek changed its scheme from Astek to Jamsostek, which is a more comprehensive insurance program. The higher premium has been cited as the reason for many companies' reluctance to pay.

Boedi said they plan to send out its officers to visit and talk to the companies who are not paying up. (rms)