Insurance firms urged to honor claims
Insurance firms urged to honor claims
JAKARTA (JP): The Ministry of Finance's director of insurance,
Suyoto, has called on insurance companies to pay claims made by
retailers whose properties were badly damaged during recent
unrests.
"If the insurance policy covers damages incurred from riots,
we are asking insurance firms to pay the claims of their
clients," Suyoto said yesterday, the Neraca daily reported.
The business daily said Suyoto met with the Insurance Council
of Indonesia (DAI) Wednesday afternoon to discuss solutions of
disputes over compensation claims.
Retailers whose stores and outlets were looted and severely
damaged during the four days of massive riots two weeks ago
demanded local insurance firms meet their claims for
compensation, which total at least Rp 661.52 billion (US$66.14
million).
DAI had earlier stated that the unrest was political in nature
and, therefore, insurance firms were not obliged to pay out on
claims for damage.
Most commercial property insurance policies include a clause
covering riots, strikes and malicious damage but exclude damage
resulting from politically motivated disturbances.
Suyoto admitted that different perceptions still prevailed
over the nature of the riots.
"Whether the riots were political or not, we will return it to
each of the policies," he told the daily.
He said some policies simply followed an official government
statement to determine the nature of the riots.
"If the insurance policy states that the nature of the riots
is determined by the government's official statement, there is no
reason to differ in opinions," he said, adding that the companies
should pay their clients' compensations immediately.
Through comments made by several officials, including the
Ministry of Defense and the Armed Forces chief, Gen. Wiranto, the
government has said that the riots were criminal acts.
Meanwhile, Neraca quoted its source as saying that, at the
most, the insurance industry in the country only covered 10
percent of the compensation values.
"Most of the claims would be reinsured to international
reinsurance firms," the source said.
Many Indonesian insurance firms were small, with assets
totaling as little as Rp 3 billion. (das)