Existing insurance companies won't be dissolved: Official

Existing insurance companies won't be dissolved: Official

Ridwan Max Sijabat, The Jakarta Post, Pekanbaru/Riau

The government has decided not to dissolve the four existing
state-owned insurance firms into the planned national social
security programs but obliged them to make adjustments to avoid
overlapping and confusion among the public.

Achmad Djunaidi, president of state-owned PT Jamsostek told
The Jakarta Post and Kompas on Thursday that the government made
the decision after receiving input from the team drafting the
bill for a National Social Security System (SJSN).

"The government has decided not to merge Jamsostek, PT Taspen,
PT Askes and PT Asabri with the planned national social security
programs," Djunaidi said.

Jamsostek runs social security programs for around 28 million
workers in both the private sector and state-owned companies;
Askes provides health insurance for around 4 million civil
servants; Taspen runs a pension program for civil servants; and
Asabri provides health and pension programs for one million
active and retired security personnel.

The government submitted to the House of Representatives (DPR)
the bill for the social security program, which covers health,
pensions and social welfare for all.

President Megawati Soekarnoputri appointed Coordinating
Minister for People's Welfare Jusuf Kalla, Finance Minister
Boediono, Health Minister Achmad Sujudi, Social Affairs Minister
Bachtiar Chamsyah and the Manpower Minister Jacob Nuwa Wea to
represent the government in the bill's deliberation.

Junaidi, who was involved in preparing the bill's initial
draft, said the bill would serve as an umbrella for all laws on
social security programs.

"The four companies will continue running their own core
businesses but are required to make adjustments on minimum
premiums, benefits and sanctions in line with the umbrella law,"
he said.

Minister Nuwa Wea had expressed his objection to the proposed
merger of Jamsostek into SJSN, arguing that Jamsostek's assets of
Rp 33 trillion came from the contribution of 28 million workers
and more than 44,000 companies and so far, the government has yet
to pay its own contribution to the programs.

"In my own capacity as manpower minister and chairman of the
Confederation of All Indonesian Workers Union that has 11 million
members nationwide, I do not agree with the government's plan to
merge Jamsostek into the national social security programs," he
told the Post by telephone Thursday.

The Indonesian Employers Association (Apindo) and several
labor unions have also expressed their opposition to SJSN which
they said would overburden employers and workers because of its
cooperation and cross-subsidy principles.

President Megawati sent a letter to the House to explain the
government's commitment to the bill.

In the urgent letter delivered on Jan. 26, 2004, the President
expressed the government's political commitment to providing
protection for the people in compliance with Chapters 28 and 34
of the newly amended Constitution, because the existing social
security insurance companies have covered only around 20 percent
of the country's 110 million workers.