The Urge For The Establishment Of A Policy Guarantee Agency Is Re-emerging, The Systemic Impact Is Getting More Real?

Illustration (Photo: Doc. Antara)

JAKARTA - PT Asuransi Jiwasraya's Director of Compliance and Human Resources Mahelan Prabantarikso said that the establishment of a Policy Guarantee Agency for the insurance industry in the country is increasingly relevant to be realized immediately.

According to him, this effort can imitate the establishment of the Deposit Insurance Corporation (LPS), which was already present for the banking industry. For this reason, he encouraged the Financial Services Authority (OJK) as the regulator to be able to take this initiative.

“Here, we propose the existence of a Policy Guarantee Institution, such as the Deposit Insurance Corporation in banks. This allows them to manage and follow up if there is a default, and the company can be rehabilitated if there is a problem,” he said in a webinar held on Tuesday, August 31.

Mahelan added that the condition of the insurance industry, which is currently under pressure after the Jiwasraya default, could be a momentum for immediate reform. In fact, he assesses that if the problem in the insurance business sector drags on, it is feared that it could have a bad impact on other sectors.

“This seems very necessary for us to re-evaluate as a new role for IDIC to maintain a balance when there is a default of this kind. Well, this can be systemic," he said.

Furthermore, the former Director of the State Savings Bank (BTN) also suggested that OJK could increase risk based supervision according to the conditions of each insurance company.

"Of course, it is supported by an integrated and adequate infrastructure by also implementing integrated GRC (governance, risk management, and compliance)," he said.

Meanwhile, another suggestion that Mehelan submitted to OJK was collaboration between various parties in order to draft a mutual fund law.

"Especially for the AJB Bumiputera 1912 problem, the mutual fund law is very much needed in order to accelerate the resolution of the problem," he said.

For information, there are currently two major problems in the national insurance industry. The first concerns the problem of Jiwasraya's default with the value of delaying payments of Rp. 20 trillion.

Second, the problems at AJB Bumiputera 1912 related to bad corporate governance, causing the company's asset record in 2020 to be smaller by Rp. 9.9 trillion compared to liabilities of Rp. 30.4 trillion.