Lippo e-Net risks losing its business permit: Official
Lippo e-Net risks losing its business permit: Official
JAKARTA (JP): Listed life insurer PT Lippo e-Net risks losing
its insurance business permit if it directly handles its Internet
business, a senior insurance official has warned.
Indomen Saragih, the director for insurance companies under
the Directorate General of Financial Institutions at the finance
ministry said on Tuesday that Lippo e-Net, previously known as
Lippo Life, was licensed to provide life insurance, but not
Internet services as has been widely reported in the media.
"The company (Lippo e-Net) is therefore considered as
breaching the law if it has a direct involvement in the Internet
business in the sense that it sells Internet services to
customers," Indomen Saragih,
Indomen said as an insurance company, Lippo e-Net was only
allowed to invest a portion of its investment funds in the form
of equity participation in an Internet business.
He said that based on existing regulations an insurance
company was allowed to put a maximum of 10 percent of its total
investment portfolio in one or more non-listed companies as
equity participation.
According to the law, an insurance company can invest up to 20
percent of its total investment in bank deposits and property
assets respectively.
However, the law also states that an insurance company can
place all of its investment funds in shares traded on the stock
market, but with a requirement to spread the risk by having a
maximum of 20 percent of their investment portfolio in one
company share.
Indomen asserted that the nature of an insurance company was
to sell insurance policies to the public, so it should not
deviate from this main activity.
If an insurance company was interested in a certain business
it could invest in it indirectly, but not by doing business
directly.
Lippo e-Net has been in the spotlight following its name
change and the transfer of most of its life insurance portfolios
to one of its affiliates to allow it to focus on its new Internet
services.
The management of the Jakarta Stock Exchange (JSX) has asked
the company to make a public disclosure if there was a change in
its core business. The company has denied it has changed its
name.
"Our company name is Asuransi Lippo e-Net, while (the shorter
version of the name) Lippo e-Net is just the company brand name,"
Lippo e-Net director Junaedy Ganie said.
He also said that the company remained in the insurance
business despite the transfer of most of its insurance portfolio
to other companies.
But, Indomen said that the change in the name of the company
had not been registered. "Based on the official registration book
the name is still PT Lippo Life, not Lippo e-Net" he added.
An economist at state owned Bank Mandiri, Martin Panggabean,
said Lippo e-Net as an insurance company should not take on such
a risky business as an Internet one.
"An insurance company should be conservative in its investment
style," he said.
The Internet business, Martin said, was still unproven as
nobody in this industry could really make profits yet.
Junaedy said the company planned to launch an Internet Service
Provider (ISP) and start to sell Internet accounts to customers
by the second quarter of this year.
"We will do Internet business directly while most of our life
insurance business activities will be carried out by our joint-
venture subsidiary," Junaedy said. (udi)