Police holders told to stay calm

Police holders told to stay calm

The Jakarta Post, Jakarta

Policy holders of PT Prudential Life Insurance should remain calm
over a bankruptcy suit against the company as it would not affect
them, the Indonesian Life Insurance Association (AAJI) said in a
press statement on Wednesday.

AAJI deputy chairman Adi Purnomo said that the bankruptcy suit
was filed due to the company's failure to keep an agreement with
a third party, and not with its policy holders.

"Thus, policy holders (of Prudential) need not worry about
their accounts as we believe that the company will keep its
commitment to make sure that the suit won't affect them," said
Adi.

He could not provide exact details of the suit, but said: "All
I know is that the suit was filed by a third party, who is not a
policy holder."

According to tempointeraktif.com, a Prudential agent named Lee
Boo Siong filed a bankruptcy suit with the Commercial Court in
Central Jakarta against the company on April 7 over its failure
to pay Lee bonuses amounting to some Rp 10 billion (US$1.17
million), which included a one-year bonus of Rp 4.9 billion, a
recruitment bonus of Rp 4.9 billion and a consistency bonus of Rp
1.4 billion.

Prudential denied that such a thing had ever occurred.

Data from AAJI's financial report, which was made available to
the public, shows that Prudential had a 255 percent Risk Based
Capital (RBC) rate last year (compared to the minimum requirement
of 100 percent), and a 110 percent liquidity rate. Both RBC and
liquidity rate are indices used by the Ministry of Finance to
determine the condition of an insurance company. The higher the
rate, the better.