Life insurance case

Life insurance case

I am a retiree of PT Caltex Pacific Indonesia (CPI). CPI,
being one of the operators in the oil and gas producing industry,
is a contractor of Pertamina, as are 14 other companies under
production sharing contracts (PSCs).

As a retiree of a PSC company -- like most retirees of all
PSCs, especially those participating in both the Annuity
Insurance Program for Pensioners (Anuitas Pensiun) and the
Medical Care Plan for Retirees (Prokespen) -- I am very
disappointed with the move by PT Asuransi Jiwa Tugu Mandiri
(AJTM).

The action to close down Prokespen, and the breaking of ties
with the PSCs, arouses suspicion and has caused unease,
particularly among active and eligible participants.

Those suffering the most because of the separation are the
eligible participants. There are 1,682 defenseless individuals
from CPI alone. That is not to mention an approximately 600 more
individuals from the other PSCs, or their reasons for
participating in Anuitas Pensiun and Prokespen.

Sadly enough, according to AJTM, the excuse for the failure
was simply due to being already "exhausted".

What about the Anuitas Pensiun which is also under the same
roof? Is it going to end up the same?

With regard to the Anuitas Pensiun, I would suggest the
retirees pay attention to and closely watch the monthly income
they are entitled to. This is in connection with bank interest
rates, which fluctuate from time to time. The calculation for
every percentage change should be readily available and/or
information about it should be passed on to the retirees
concerned, since the net income depends a lot on the interest.

According to Kompas on Oct. 6, 2000, the closure of the AJTM
was justifiable owing to its very poor performance.

According to CPI news on June 1, 1992, I gathered that "the
Prokespen is designed mainly for employees (and spouses) of
Pertamina and its contractors aged under 56 years" and launched
by AJTM in cooperation with Pertamina starting in May 1992. It is
thus very obvious that Pertamina is somehow in some way very
closely linked to AJTM, and vice versa. By the same token, the
life insurance policies between AJTM and the PSCs are based on
appointed principles and not through the common tender process.

Now that the issue has been exposed and the PSCs, including
CPI, have intervened in the dispute to resolve the problem, CPI
is prepared to chip in US$1.9 million, or the equivalent of Rp 18
billion. It is a split of 12 percent borne by CPI and 88 percent
on Pertamina's account, for having to be "cost recoverable". It
is for the relief, so the Prokespen (a collective type of life
insurance program) could be transformed into a separate insurance
individual program, the Dakespen, which is still under AJTM. Note
also that the "rescue package" is subject to approval from
Pertamina and is still within the context of "You rub my back and
I'll rub yours".

My questions are:
1. What is actually going on and who is being rescued, the
eligible participants or AJTM?
2. Why not be transparent by going through a tender, either a
general tender or a limited tender?
3. How is it possible for AJTM to return the Rp 18 billion
"rescue fund" even by installment. And to whom will it be return?

V. ALBERT TILAAR

Depok, West Java