How Should You Respond To Jiwasraya's Default Case

Illustration. (Photo: Unsplash)

JAKARTA - The settlement of PT Asuransi Jiwasraya's default case is considered to be focused on customer protection. President Director of the Center for Banking Crisis, Achmad Deni Daruri, stated that parties involved in solving the problem must focus on returning customer funds.

"We hope that all parties in the DPR, BPK, the Attorney General's Office, the Ombudsman, will use their authority for customer protection, namely returning customer money in a measurable, objective, credible and accurate manner with a business approach. Because it is the customer who loses, not the state," said Deni in his statement to VOI. , Monday February 3rd.

According to Deni, it is ironic if there are parties who have the authority but do political or legal acrobatics only to show the superiority of their institutions without caring about policy-holding customers who are waiting for certainty to be paid.

He explained that the non-bank financial system is still far from solid in line with several recent cases such as Jiwasraya. In Law No. 29 of 2016 concerning Financial System Crisis Prevention and Management (PPKSK) has a clause which indicates that the financial service institutions that are considered to be able to trigger a financial crisis are banks and not insurance.

The basic logic, said Deni, is that banks have a larger asset size, network area, transaction complexity and linkages with other financial sectors.

"Meanwhile, based on common sense, financial institutions, whether banks or non-banks, have the potential to have asset size, network area, transaction complexity and relatively large linkages with other financial sectors," said Deni.

Deni said, when the government of the United States (US) took over the insurance company AIG because of its asset size, network area, transaction complexity and large linkages with the financial industry. At that time AIG was privately owned and taken over by the state.

The takeover by the state was opposed by many parties because it was considered that the state was not allowed to own state-owned enterprises, but due to strong reasons from the argumentation of asset size, network area, complexity of transactions and very large linkages to the economic sector, especially the financial sector, the takeover step was also approved by parliament.

The United States government spent a lot of money to take over AIG, but currently the United States government does not experience any economic losses as a result of this takeover. The United States government issued a bailout fund of 182.3 billion US dollars and sold it for a revenue of 205 billion US dollars.

This means that the United States government gets a profit of 22.7 billion US dollars. The US $ 182.3 billion bailout fund came from the United States government and the New York branch of the US central bank, which was a loan provided by the US central bank where the United States government acquired 79.9 percent of AIG shares.

"It is important to note that loans are provided by the central bank. This experience is not owned by Indonesia," explained Deni.

Regarding Jiwasraya, according to Deni, the government should form a team to evaluate the systemic impact of cases like Jiwasraya. Deni said, of course this is not the domain of the Financial Sector Policy Committee (KKSK).

"Because there is no law that supports KKSK to bailout Jiwasraya," he said.

Furthermore, Deni explained, based on the existing law, the Law turns a blind eye to the case that the insurance agency case is definitely not systemic. For this reason, he suggested that a team should be formed which should be led by BUMN Minister Erick Thohir with quality and integrity advisors.

"The goal is not only to save Jiwasraya but also to ensure that Jiwasraya does not have the potential to become a systemic crisis, as well as to ensure that the Indonesian government will benefit if a bailout is carried out," said Deni.

Learning from the successful AIG experience, continued Deni, business solutions should be prioritized. He hopes that all levels of the OJK will remain professional because as regulators and supervisors, they will forever be attacked and blasphemed.

"Nobody will praise the results. Although the IMF has praised the OJK in the official report of the IMF in 2019 saying the banking system under OJK control has proven to be well capitalized and its profitability is high with 2.5 percent asset development, this condition will certainly never explode into crisis, "concluded Deni.