One insurance firm closed down, two others suspended
JAKARTA (JP): The government has closed down one insurance company, curtailed the operation of two, sent warnings to nine and is investigating two others.
The director for the insurance industry at the Ministry of Finance, Sophar Lumban Toruan, disclosed here yesterday that the finance minister revoked the license of general insurer PT Asuransi Arindomaya with a finance minister decree dated April 25.
"The government revoked Arindomaya's license because its shareholders had pulled out the money they had invested in the company, so it had no more capital to back up its operation," Sophar told journalists.
He also revealed that the government had limited the operation of general insurers PT Maskapai Asuransi Teladan and PT Maskapai Asuransi Timur Besar because their capital was inadequate.
"They are now banned from closing new policies but still allowed to continue serving existing customers... If they cannot get more capital and some re-insurance back-up, we will revoke their licenses, oh yes.." Sophar said.
He said his office had investigated general insurer PT Asuransi Inda Tamporok and life insurer PT Asuransi Indatamporok Life because "we are suspicious of their unusual first quarter financial reports."
He added that his office had sent warnings to six general insurers and three life insurers for their failure to submit their first quarter financial reports on time.
The general insurers are PT Asuransi Grasia Unisarana, PT Maskapai Asuransi Jasa Tania, PT Asuransi Nugra Pacific, Periscope Insurance Coy, PT Asuransi Sari Sumber Agung and PT Arthagraha General Insurance.
The life insurers in question are PT Asuransi Jiwa Binasakti Sejaktera, PT Asuransi Jiwa Mukjizat Utama and PT Asuransi Winterthur Life Indonesia.
"There must be something wrong in the management of those insurers... Since they failed to meet their obligations to the government, I suspect that they might have abused the trust of their customers," Sophar said.
He noted that there are still many insurance companies trying to stall customers by putting off or even refusing claim payments.
"Those who get such treatment from insurers: please report it to our office. We will help solve the problem and, if necessary, punish the errant insurers," He said.
He also warned the public over the valuation of claims by adjusting companies.
"Adjusters now still have no working standards and, therefore, the result from one adjuster to another can vary. So be careful with adjusters. Don't just believe their estimates," Sophar warned.
Competition
Sophar also called on independent parties to rate local insurance firms so that the latter can become more vigorous in competition.
"Such rating by an independent agency would give people a clearer picture of insurance firms. It would provide guidance in choosing the right insurance firms," he said.
Currently the government, in cooperation with the Indonesian Insurance Council, provides a list of the 20 largest local insurance firms, in terms of their capital standing, gross premium, net premiums and a number of ratios which represent their solvency.
Indonesia now has 52 life insurance firms, 97 general insurance firms and five reinsurance firms. (rid)