Insurance firms told to pay out claims promptly

JAKARTA (JP): The Ministry of Finance's director of insurance, Sophar Toruan, told insurance firms yesterday that delaying insurance claim payments is against government regulations.

"We have found several insurance firms which failed to pay their clients' claims immediately after they were submitted. Instead, those firms paid the claims in installments," Sophar said yesterday.

Current regulations do not allow insurance firms to pay out their claims on an installment basis.

"We urge clients who may have been treated that way to report their cases to the finance ministry by mentioning the names of the errant firms," he said.

At least three firms have been warned by the finance ministry, he said, without identifying the firms.

The finance ministry, as the only supervisor of insurance companies, can revoke the license of any company after three warnings.

Currently, there are 56 life insurance firms, 98 loss insurers and four re-assurers licensed by the finance ministry.

"I would like to remind potential clients to carefully choose insurance firms."

Sophar said that based on the latest ratio of investment to technical reserves, most insurance companies, both life and loss insurance, have low solvency.

He said that in the middle of this year, only 35 life insurers and 83 loss insurers recorded an investment-to-technical reserve-ratio of 100 percent or more.

He said that the minimum ratio for a healthy insurance firm is set at 100 percent.

At the top of the list of healthy life insurance companies are PT Pasaraya Life Insurance, PT AMP Panin Life, PT ASPAC Life Insurance, PT Zurich PSP Life Insurance Indonesia, PT Asuransi Rama Life and PT Panin Life.

The top loss insurance firms are PT Karyamas Sentralindo, PT Pool Asuransi Indonesia, PT Marannu Mario Asuransi, PT Panin Insurance, PT LLoyd Indonesia and PT Asuransi Jasaraharja Putra.

Sophar said that his office has developed an early warning system to help it control insurance companies. It carries out desk-auditing on quarterly financial reports and directly supervises firms which provide unqualified reports.

Sophar said that as of June 30, there were 54 life insurance firms with assets totaling Rp 6 trillion, up from Rp 5.3 trillion as of the end of last year. Total investments increased to Rp 4.6 trillion from Rp 4 trillion.

He said that the total assets of loss insurance firms reached Rp 5.3 trillion in June and total investments Rp 3.6 trillion, compared to Rp 4.8 trillion and Rp 3.2 trillion at the end of last year.

The biggest life insurance firms in terms of investment, as of June 30, are PT Asuransi Jiwa Bersama Bumiputera 1912 (with a total investment of Rp 935 billion), PT Asuransi Jiwasraya (Rp 901 billion), PT Asuransi Lippo Life (Rp 567 billion), PT ASABRI (Rp 444 billion), PT Panin Life (Rp 341 billion) and PT Asuransi Jiwa Dharmala Manulife (Rp 245 billion). (alo)