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.