AXA Mandiri Banned By OJK Cannot Sell Insurance At Banks, Claims Healthy Financial Condition

JAKARTA - PT AXA Mandiri Financial Services (AXA Mandiri) reacted to the move by the Financial Services Authority (OJK) which asked banks not to sell unit-linked insurance products from three certain companies that are currently facing problems.

AXA Mandiri Director of Compliance Rudy Kamdani said that unit link insurance products have a number of benefits and advantages.

He said that until the third quarter of 2021, the Indonesian Life Insurance Association (AAJI) noted that unit links still dominate life insurance premium income by more than 60 percent.

"This shows that unit-linked insurance products are still the community's main choice and the benefits have been felt by customers, beneficiaries, and have had a positive impact on development and the Indonesian economy," he said in a press statement today, Thursday, February 3.

According to Rudy, unit links have played a role in supporting the government since 1999 to achieve development targets by placing funds in Government Bonds (SUN), which is one of the sources of funding in the State Revenue and Expenditure Budget (APBN).

Funds obtained from the issuance of SUN, he said, could be used, among others, to support infrastructure development projects such as roads, hospitals, airports, ports, and so on.

“The placement of funds made by insurance and pension funds was recorded at Rp644 trillion (source: DJPPR Ministry of Finance). This amount is equivalent to 14 percent of the total debt securities issued by the Indonesian government," said Rudy.

Furthermore, the AXA Mandiri boss revealed that unit link has also provided insurance and investment benefits to customers since 1999.

"Many customers and their heirs have felt the benefits of protection, legacy, and investment which are the main benefits of unit link," he said.

On this occasion, Rudy also explained if the company until September 2021 was in a financially healthy condition as indicated by a solvency value (RBC) of 372 percent, far above the limit set by the OJK of 120 percent.

“This shows that the company can carry out operational activities, including paying claims to customers properly. Acting as a customer partner, the company has also paid claims and benefits to customers of IDR 6.3 trillion until the third quarter of 2021," he explained.

From information compiled by VOI, AXA Mandiri together with AIA and Prudential are suspected of being involved in a unit-linked insurance dispute after a number of people claiming to be from the Insurance Victims Community came to the OJK to demand their rights that are still in arrears at the insurance company.