Sinar Mas already paid 40% of May riot victims' claims
Sinar Mas already paid 40% of May riot victims' claims
JAKARTA (JP): Insurance firm PT Asuransi Sinar Mas announced
on Thursday it had paid 40 percent of the Rp 92.65 billion
(US$8.3 million) it received in claims from owners of properties
and motor vehicles damaged during the May riots.
Sinar Mas president Kornelius Simanjuntak said the company
extended Rp 37.65 billion (about US$3.4 million) to 201
policyholders out of the 282 claims from the three-day orgy of
looting and vandalism.
"We will pay all the claims of our clients affected by the
riots in mid May," Kornelius told reporters.
Of the total amount repaid, Rp 35 billion was for claims for
damaged properties and buildings. The remaining 2.65 billion was
paid to all of the 109 claimants for motor vehicles damaged
during the riots.
He said the company had only paid out on 92 policies of the
173 claims for damaged properties because the others were jointly
underwritten with other insurance firms.
Sinar Mas was the lead underwriter of the 92 insurance
contracts but acted only as counderwriter in the remaining 80
contracts, which were all worth Rp 55 billion.
The settlement of these unpaid claims was awaiting the
decision of the lead underwriter, as well as the results of the
loss adjusters' studies, he said.
Some claims had not been paid yet because they either did not
have complete data or were currently in the process of payment,
he said.
Sinar Mas is the first company to publicly announce it has
paid insurance claims to riot victims after four months of
uncertainty.
Earlier this month, the Association of Indonesian Retailers
(Aprindo) said only about Rp 5 billion of the Rp 661.5 billion
of its members' claims arising from the riots had been paid.
Aprindo threatened then to publish the names of the insurance
firms if they did not honor the contracts by Sept. 15.
Most of the insurance contracts were reinsured to Singapore-
based insurance companies.
The Singapore Reinsurance Association (SRA) recently began to
advise its members to make payments of claims to Indonesia's
riots victims, after initially insisting that the riots should
not be covered because they were politically motivated.
But the SRA, which groups several major international
insurance firms, demanded that the Insurance Council of Indonesia
revise the terms and conditions of the loss insurance policies
sold in Indonesia which contained riots, strikes and malicious
damage (RSMD) clause to avoid ambiguity in policies in the
future.
Kornelius said he was currently working as a drafter for the
Association of Indonesian Insurance Management Experts to help
come up with new wordings which would redefine the RSMD clause.
"It is currently under simulation," he said, adding that he
hoped to finish the draft by the end of this month and to have
the new wording applied by the end of the year.
He declined to specify the changes but said that the RSMD
clause for loss insurance policies would be divided into narrow
and the wide clauses.
The narrow clause would be applied to minor or "localized
riots" such as labor strikes and brawls, while the wide clause
would cover unrest on a larger scale, such as that happened on
May 12 to May 15.
The wide clause would have higher premiums, he said, and would
cover looting, which would not be covered in the narrow clause,
he said.
"This will help us set fair premiums for different policy
holders," he said.
The company's marketing director, Budi Hartono Purnomo, said
the new clause would force insurance companies raise their
premiums.
"The foreign reinsurance companies now charge higher premiums
to Indonesian firms because we have a high country risk," Budi
said.
Rates for different types of commercial and noncommercial
properties which currently ranged from 0.275 permill (per
thousandth) to 0.55 permill of the insurance claim reserves would
be raised to between 1 permill and 3 permill, he said.
Kornelius said Sinar Mas' owned retention of the claims was Rp
15 billion. (das)