JAKARTA - Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso admitted that his party should be more serious in regulating and supervising the insurance industry. This is because there are many violations of financial governance in several insurance companies, which risk eroding public trust.
"Actually, this industry is not too affected by the issues we are working on. However, we admit that we need to be more serious, because this industry needs reform," Wimboh said at the Annual Meeting of the Financial Services Industry in Jakarta, Thursday, January 16.
Wimboh said that until the end of 2019 the insurance industry premium was still growing. Commercial insurance premiums grew 6.1 percent on an annual basis (yoy) to IDR261.6 trillion or accelerated compared to 2018 which only increased by 4.1 percent.
Wimboh said that his party had actually started a reform program for the insurance industry since 2018. He continued the reform program he had designed while still serving at Bank Indonesia.
"We continue to pay attention to several crucial issues in society. At least, this reform will also take several years," he said.
Previously, Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said the government was preparing to establish a Policy Guarantee Agency (LPP). This institution is to safeguard public funds or premiums that are invested in insurance companies. LPP works like a Deposit Insurance Corporation.
Actually, this institution has been mandated in Law (UU) Number 40 of 2014 concerning Insurance. However, the government and the Financial Services Authority (OJK) are still coordinating to establish the LPP.
"The preparations are continuing, we are designing the LPP," said Suahasil after his inauguration as an Ex-Officio OJK DK Member at the Supreme Court Building, Jakarta, Monday, January 13.
Meanwhile, several insurance companies are in the spotlight, from Life Insurance with Bumiputera, Jiwasraya, to Asabri. This is in line with problems in financial management and investment. Jiwasraya, for example, experienced a policy default due to the loss in stock investment. The BPK noted that Jiwasraya's losses were also categorized as state losses reaching Rp. 13.7 trillion.
Losses due to stock investment are also expected to occur in Asabri. The BPK is completing an audit of the social insurance body that houses the TNI and Polri members.
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