Korea To Assist Indonesia Universal Health Scheme

Korea’s National Health Insurance Service (NHIS) said it would pass on its know-how to Indonesia on how to operate the national health insurance program.

To help Indonesia establish universal health coverage (UHC), NHIS will work with the Korea Development Institute and the Organization for Economic Cooperation and Development (OECD) to offer consultations for health insurance policy for eight months, the health insurance agency said.

Indonesia established BPJS Kesehatan, a national health insurance company, by integrating multiple insurers in 2014.

BPJS has 13 regional headquarters and 119 branches. As of April, 74 percent of Indonesians subscribed the national health insurance. About 59 percent of the subscribers are low-income earners who receive the government’s subsidies. Twenty-five percent of them are employee subscribers and 16 percent, local subscribers.

The insurance rate is 5 percent for employee subscribers, and those for local subscribers are divided into three levels. Depending on the income, local subscribers pay regular insurance premiums. A low-income earner pays 23,000-rupiah ($1.59) insurance premium a month.

In Indonesia, state medical institutions offer 44.7 percent of healthcare service, and private, 55.3 percent. Primary care is supported under the capitated payment. Secondary and tertiary care is under the diagnosis-related group payment system called “INA-CBG.” BPJS contracted 79 percent of primary medical institutions and 83 percent of second and tertiary institutions.

An Indonesian health insurance subscriber should select at least a primary medical institution and must register membership. There is no individual co-payment.

In 2016, Indonesia’s life expectancy was 69.2 years, with a birth rate of 19 per 1,000 people and an infant mortality rate of 22.2 per 1,000.

The Indonesian government set a goal to achieve UHC by 2019 but faces a variety of problems. They include a surge in medical costs due to the increase of subscribers, limitations of the government’s financial resources for the expansion of the health insurance for vulnerable groups, lack of experience in running the program, weak infrastructure for medical care, and limitations in purchasing insurance services as an insurer.

To tackle the issues, NHIS plans to hand down its experience of running the Korean health insurance program and know-how to Indonesia and offer customized policy consultations, NHIS said.

In particular, NHIS will form a consultation group with health insurance researchers and scholars to help Indonesia achieve sustainability in health insurance finance, enhance the insurer’s function as a strategic service purchaser, and improve the medical delivery system.

“Our experience to improve the health insurance system in Vietnam, Oman, the Philippines, Ghana, Colombia, and Peru will help us give good advice to Indonesia,” an official at NHIS said. “After that, we will expand our business to help Indonesia execute the health insurance system.”

AJB Bumiputera - Need To Sell Assets to Pay Claim

The new management of life insurance mutual AJB Bumiputera 1912, the oldest insurance company in Indonesia, has stated that claim payments are its top priority.

“But we need time to improve," said the mutual's new managing director Sutikno Sjarif in a statement. He was appointed along with four others to the board of the insurer on 1 November.

The new board of directors replaces the statutory manager who was appointed in October 2016 to manage AJB Bumiputera.

Meanwhile, the Indonesian Life Insurance Association (AAJI) has said that AJB Bumiputera must sell assets to pay customer claims, CNN Indonesia reported.

Executive Director of the Indonesian Life Insurance Association (AAJI) Togar Pasaribu said that as a life insurance company, AJB Bumiputera is obliged to ensure payment of claims to policyholders. Payment of claims should be the priority of AJB Bumiputera's new management. Thus, the mutual must take steps to settle arrears of claim payments, including the sale of assets, he said.

In a response, Mr Sjarif said that he was reviewing a plan that had previously been drawn up by the statutory manager. From January to mid-October 2018 AJB Bumiputera had paid claims totalling IDR3.3trn ($229m).

In an article on the CNN Indonesia website, AJB Bumiputera said that a 2004 decree (Number 504) issued by the Minister of Finance set out that one measure for assessing the health of insurance companies was current assets (deposits, shares, bonds, etc.). However, AJB Bumiputera's assets are mostly in the form of property. The mutual life insurer was established in 1912 before existing insurance laws came into force.

Thus, under Decree 504, the insurer was deemed as not having sufficient current assets. It had difficulties complying with the provisions. For this reason, in October 2016, the Financial Services Authority (OJK) appointed a statutory manager to help Bumiputera meet the existing provisions. Supervision of the insurance industry was transferred from the Ministry of Finance to the OJK in 2011.

Improvements have been introduced at the insurer, including making its organisational structure leaner. For example, the administration and finance functions were consolidated. Premium collection has been made cashless, freeing agents to focus on sales instead of having to spend time to pick up premium payments from customers.

New Wife Cannot Claim Life Insurance

The Supreme Court of Canada has awarded a $250,000 life insurance policy to a woman whose ex-husband never told her he removed her as the beneficiary, even though she continued paying the premiums for more than a decade after their divorce.

When Michelle Moore separated from her husband Larry in 1999, they made what is known in law as a “kitchen table agreement,” an unwritten deal that she would keep paying the annual premiums on his life insurance, and in return he would leave her as the beneficiary.

So for 12 years, Michelle paid more than $500 a year, thinking she would receive $250,000 in the event of Larry’s death, for the benefit of herself and their three children.

But there was a hitch. After the separation, Larry moved in with his new wife Risa Sweet, and immediately named her as the beneficiary of his life insurance, without telling Michelle.

When Larry died in 2013, therefore, Michelle was shocked to learn from the insurance company that she had been paying premiums toward a policy that, since her divorce, had been officially in the name of her ex-husband’s new wife.

That led to a legal battle between two “innocent” parties, as the Supreme Court put it, that went through all levels of court over five years. Michelle Moore won in her initial application, lost on appeal, and has now won at the country’s top court.

The effect is that the money, which has been held in trust, will go to her.

“Risa was enriched, Michelle was correspondingly deprived, and both the enrichment and the deprivation occurred in the absence of a juristic reason,” reads the Supreme Court ruling, written by Justice Suzanne Côté. It was a split decision, with Justices Clément Gascon and Malcolm Rowe dissenting.

Michelle and Larry Moore married in 1979, and had three children who are now adults. Michelle continues to live in the family home in Mississauga. He bought the life insurance in 1985, with Michelle designated as the beneficiary, but not irrevocably.

They separated in December, 1999, and agreed informally that she would keep paying the premiums and remain as the beneficiary.

Their separation agreement, signed in 2002, does not mention the oral agreement. But the initial application judge found as fact that this agreement was real, legally binding, and enforceable. He also found that the purpose of the policy was to provide for Michelle and the Moore children in the event of Larry’s death.

They separated in December 1999, the same year Larry met his new wife, Risa Sweet, now 63, at the Donwood Institute, an addiction treatment centre in Toronto’s Leaside neighbourhood that would later merge with other facilities into the Centre for Addiction and Mental Health.

“It is evident from the materials that the marriage breakdown between the Moores was related to Mr. Moore’s struggles with chronic pain and his alcohol and substance abuse issues which no doubt contributed to what Ms. Moore refers to as his financial irresponsibility and build-up of debts burdening them both,” according to an earlier decision of the Ontario Court of Appeal. “They clearly went through a very difficult time. In fact, the financial difficulties — including a very substantial debt of Mr. Moore to Revenue Canada of over $70,000 — led to both declaring bankruptcy in early 2000.”

Around this time, Larry Moore also lost his driver’s licence and his job, for medical reasons. In time, his disability payments were garnisheed for child support.

He moved in with Sweet in 2000, and they became common-law spouses for 13 years, caring for each other materially and financially. He made the switch to his life insurance policy in September 2000, adding Sweet, removing Michelle.

The Supreme Court found that Larry did not make the switch “surreptitiously.” In fact, he did it through a broker who was married to Michelle’s sister. But, importantly, he did not tell Michelle he had done it. She continued paying annual premiums of $507.50 until Larry died in 2013, with no other significant assets.

Sweet argued that the policy was rightly hers, as the contract said, and Moore was trying to “circumvent” the rules of Ontario’s statutory scheme to regulate insurance.

“Mr. Moore did not want me to worry about how I was going to pay the rent or buy my medications in the unlikely event he passed away before me,” Sweet said in court records. “He wanted to make sure I was able to live my remaining years in the building where I have resided for the past 40 years. And he wanted me to live worry and debt free.”

Sweet is disabled with several chronic illnesses and cannot take public transit, according to her court filings. She continues to have trouble paying rent and buying food.

4 Reasons You Should Buy Life Insurance

If you’re like most people, you probably think you don’t need life insurance until you provide for a family of your own. Even then, life insurance may not be on your radar when it comes to financial planning. According to the 2018 Insurance Barometer Study from Life Happens and the Life Insurance and Market Research Association (LIMRA), adults—especially millennials—tend to overestimate the cost of life insurance and therefore don’t prioritize it among their other financial obligations.

Like other types of insurance, choosing the right life insurance policy and amount of coverage is critical to avoid overpaying in premiums. Before researching or purchasing a policy for yourself, it’s important to know what you want to accomplish with it. If you’re unfamiliar with the various ways life insurance can be used as a financial planning tool, the following four scenarios may help you decide whether you and those important to you can benefit from holding a policy.

1.    You’ve Just Started a Family

Though not the only reason you might need life insurance, providing for your family in the event of your untimely death is one of the primary reasons people tend to purchase it. Life insurance can be used to replace the income that your family depends on to meet daily living expenses, such as mortgage or car payments. If you have young children, it can also be used to provide for their educational expenses, which can be quite costly.

2.    You’re Part of a Blended Family

Family dynamics are often complicated, especially if your family isn’t considered “traditional.” If you’re remarried, you might consider life insurance to provide for your new spouse while allowing your children to inherit other assets. Or, if you have children from multiple marriages, you can use life insurance to ensure that all of your children are provided for equally when you die. Regardless of your family situation, life insurance can be an effective way to allow for wealth transfer equalization among different family members.

3.    You’re Likely to Have Estate Tax Liabilities

Depending on its size, your estate may owe federal—and in some cases, state—taxes when it’s transferred to your heirs. Many people purchase life insurance policies to fund this liability. Alternatively, life insurance can be used to create a reserve of liquidity that can be accessed to pay various expenses and potential taxes upon your death, especially if most of the assets you’re transferring are difficult to convert to cash quickly, like property and other valuables.

4.    You Own a Business

Finally, if you own a business, life insurance can be used in several ways to provide for the ongoing survival of the company. From a succession planning perspective, life insurance can be used to fund purchase or sale arrangements, or it can provide an inheritance to your heirs who won’t receive a share of the family business when you hand over the reins. From a personnel perspective, key person insurance is often purchased to replace income needed by the business due to the untimely death of one of the primary revenue generators. Life insurance can also be offered as part of your overall benefits package to attract and retain talented employees.

Your life insurance needs can change over the course of your life as your financial circumstances and family dynamics evolve, so it’s important to check in regularly with your financial advisor to make sure you’re properly covered. Of course, it’s typically less expensive to purchase life insurance the younger and healthier you are, so the earlier you’re able to start planning, the better.

Insurance Claim - Fraud

Police detained a marketing manager for lodging a false robbery report and losing thousands of ringgit in order to claim insurance.

Seberang Perai Tengah (SPT) District Police Chief ACP Nik Ros Azhan Nik Abdul Hamid said the man, 34, was detained yesterday after investigations found the report to be confusing.

“According to the man, in the incident on Sunday, when he was at home in Kampung Baru here, two men on a motorcycle robbed him while he was placing some items into his car and escaped with his bag.

“The man claimed that the items included his IPhone, a laptop, a branded tablet in the bag which the suspects took, all worth RM11,000,“ he said here today.

He added police investigated the matter and found that the man who worked in an international company had lodged a false report and sold the items to others through the social media.

Who Is P Nallini

A new Federal Court judge, Justice Datuk P. Nallini (pic), is the first Malaysian Indian woman to sit on the nation's highest court.

The 59-year-old was one of the four new judges elevated to the Federal Court from the Court of Appeal in a swearing-in ceremony here at the Palace of Justice on Monday (Nov 26). 

Born on Aug 23, 1959, in Penang, Justice Nallini holds a bachelor's degree in Science from the University of London and a law diploma from Westminster University.

Her legal career started in 1984 when she was admitted to the English Bar as a solicitor by the Middle Temple of the United Kingdom. She became a Court of Appeal judge on Sept 12, 2014.

Nallini has co-authored a book titled "The Law of Dismissal", which was published by CCH Publications.

Indonesia Warung Goes Digital

Warung Tiga PutRI is not your typical warung . Although it sells snacks, cigarettes and assorted knick-knacks like countless other ramshackle convenience stores across Indonesia’s towns and cities, the tiny bright-yellow kiosk does much more for it is one of Indonesia’s growing number of smartwarung . No fewer than five CCTV cameras at the busy Jakarta kiosk collect data on customers, such as their approximate age and sex, which is later analysed to improve marketing, distribution and engagement. 

The concept is the brainchild of Warung Pintar, a local tech start-up that has transformed more than 1,000 warung and counting in Jakarta and other Indonesian cities. 

“We put in CCTV cameras to know how many people shop there, how many among them are men or women, their ages. Basically we use them to capture the shoppers’ demography,” Warung Pintar co-founder Harya Putra told This Week in Asia . “We realised there was a data blind spot in warung . A lot of things were happening there that we didn’t know about. There’s a lot of opportunities in waru ng because the community and the economy are there, but there was no technology that empowered them.”

Customers at Warung Tiga Putri can also rent power banks, watch television, use free Wi-fi, buy train and plane tickets, charge their mobile phones, and opt for cashless payment via mobile wallets such as Go-Pay and Ovo.

For the kiosk’s owner, Junaidi Salad, Warung Pintar has been a godsend. Before the company approached him about turning his 1.5-metre-wide kiosk into the first-ever smart warung , the 32-year-old was worried about being evicted from the roadside he had illegally occupied for several years. The tech start-up – whose co-founders used to work with Jakarta-based venture capitalist East Ventures – helped Salad gain legal status by moving the kiosk to the car park of one of its co-working spaces, where he doesn’t have to pay rent or for electricity.

Warung Pintar also provided him with an Android tablet, installed with an application that allows him to track sales and inventory, as well as order goods. For 100,000 rupiah (US$7) per month, Salad benefits from open-access Wi-fi that regularly attracts ride-hail drivers and others to his shop. Since the change, Salad has seen his daily profits shoot up to 4 million rupiah (US$274) from 70,000 rupiah. He now owns a car and two other warung , one of which is also a smart warung , and his brisk business pays for the education of his three daughters.

“When [Warung Pintar] approached me I was still cautious, then I decided to try anyway,” Salad said. “Now I’m really glad because I can track my sales and expenses. I also have more friends. My warung is now more comfortable so people can spend their time here.”

Indonesia is Southeast Asia’s largest internet economy. Its value is expected to reach US$27 billion in 2018, a year-on-year rise of 49 per cent, according to a report by Google and Singapore investment fund Temasek. With only 150 million of the country’s 260 million people connected to the internet, the potential for growth is enormous.

The evolution of warung from cramped kiosks into technologically powered small businesses follows trends in China, where tech giants such as Alibaba – which owns the South China Morning Post – and JD.com introduced unstaffed and cashless convenience stores and smart shopping trolleys.

Warung have been at the forefront of Indonesia’s retail market long before mini markets and department stores took up space in urban and rural areas. Indonesia’s second-richest man, Eka Tjipta Widjaja, earned his fortune by selling household items in a warung as he was growing up in the 1930s.

Many warung, however, have struggled to compete with air-conditioned mini markets, which offer more items and other services.

“We want to leverage data to grow the warung business,” Putra said. “In 2013 alone there were 57 million micro businesses such as warung , but those which have upscaled to a small or medium business, or even to a large enterprise, are still minuscule in number. There is a missing bridge between micro and small and medium businesses, and we believe that the key to upgrading warung into small businesses is through data.”

Warung Pintar isn’t alone in its efforts. Wahyoo, another start-up, aims to modernise food kiosks known as warteg that are scattered in Indonesia’s big cities. Much like Warung Pintar, Wahyoo is streamlining supply chains: warteg owners can now order bottled water, beverages, eggs, cooking oil, sugar, flour, tea, and coffee through a Wahyoo app. The company now has over 2,000 wartegunder its name, up from 50 soon after it was founded in April last year.

“There are only a few warteg that are really clean, and that’s what deters people from eating in them. Despite that, warteg are always full,” said Wahyoo founder Peter Shearer. “We want to be the biggest digital warung operator in Indonesia. In the future we want to enable a point-of-sale system that will allow us to find out the bestsellers on the menu and identify consumers’ profiles.”

Digital illiteracy and lack of trust are the biggest challenges the start-ups face when trying to bring technology to warung owners. 

Sugiarti, a 46 year-old warteg owner in west Jakarta, does not own a smartphone and struggled to check if customers had paid for their meals via Ovo, a mobile wallet app.

“I was so confused at first,” she said. “Here my customers rarely pay with Ovo. Once, a customer told me that he had paid with Ovo, so I had to check with my husband who has the phone, and he’s not always here with me.”

Start-ups like Wahyoo and Warung Pintar see continuous learning, for their companies and clients alike, as key to expediting the digitalisation of warung in Indonesia. Both firms send an employee once a week to check on warung inventories and address the concerns of owners.

“We need to be fast. As of today, we have over 22,000 warung that have registered with us to be a smart warung , but we don’t have the capacity to process their requests in a prompt manner,” Putra said, adding the company is still learning on the go about how best to cater to warung . 

B40 Health Scheme Covers 36 Critical Illnesses

The healthcare coverage under the B40 Health Protection Fund will be extended to cover 36 major critical illnesses instead of four as announced earlier, said Finance Minister Lim Guan Eng.

He said the scheme, effective Jan 1 next year, would provide protection for the bottom 40% of the population (B40) with up to 14 days of hospitalisation benefits. The free protection against the 36 critical illnesses during hospitalisation cover will be set at RM50 per day or RM700 per annum.

“We have decided to increase the number of critical illnesses, from four to 36, after a discussion with the insurance company. The application will be online. The patient needs to prove that he or she is warded and suffering from one of the critical illnesses.

“The scheme will be managed by Bank Negara Malaysia (BNM), which is now preparing the website,” he told a press conference after launching a RM30,000 upgrade of a preschool building at SK Bagan Jermal here yesterday.

In Budget 2019, it was announced that the scheme would only cover four major critical illnesses.

China Single Day Vs US Black Friday

China’s voracious appetite for online shopping is perhaps best shown by the billions of dollars spent online in minutes on Singles’ Day. But the Black Friday shopping frenzy in the US plays out very differently, with consumers elbowing each other and even getting into fights in their attempts to grab heavily discounted flat-screen televisions or Xbox gaming consoles in stores like Walmart.

How the world’s two best-known shopping events play out highlights not just the sheer spending power of Chinese shoppers and general consumer sentiment amid growing economic uncertainty in an escalating US-China trade war, but also the major differences in retail ecosystems in the top two economies.

Black Friday, the day after Thanksgiving, often marks the start of the holiday shopping season and counts as one of the biggest shopping days in the US. For decades, retailers would begin advertising holiday sales from Black Friday, offering shoppers discounts on their Christmas shopping. Last year, some 77 million shoppers went to physical stores to shop on Black Friday, with consumers spending about US$5 billion online, according to a joint National Retail Federation and Prosper Insights & Analytics survey in the US.

That stands in stark contrast with China, where the biggest shopping day for the world’s most populous country happens almost exclusively online. The annual November 11 Singles’ Day sale across Alibaba’s e-commerce platforms racked up US$30.8 billion this year, topping records and dwarfing online sale numbers of Black Friday and Cyber Monday combined. (It should be noted that the final numbers included transactions made on Lazada, Alibaba’s Southeast Asian e-commerce subsidiary.)

China’s online-driven shopping behaviour stems largely from a leapfrogging of organised retail, where chain stores – like supermarket or hypermart chains – sell goods to hordes of consumers.

The game-changer for China came in the form of the internet and the rapid adoption of mobile phones, which helped to train an entire generation of increasingly affluent consumers to buy online, as compared to the US where people have shopped in bricks-and-mortar stores for generations.

Today, the Singles’ Day numbers from Alibaba, which owns the South China Morning Post, are of such sheer scale that the annual one-day shopping event is widely seen as a benchmark for consumer sentiment. Its growing transaction volumes each year also illustrate China’s shifting consumption demographics, which include the growth of a rising middle class and the emergence of the big-spending millennial consumer.

A recent Bain report on retail identified China as an ecosystem that is primarily led by online players, with consumers leaning towards making online purchases. In contrast, the retail ecosystem in the US is still largely led by offline players, who are inclined towards encouraging e-commerce on their own platforms.

But US retailers, who have long relied on bricks-and-mortar shopping, are now also struggling to keep their physical retail stores profitable even as they beef up their e-commerce offerings as consumers shopping habits gradually shift online.

Research indicates that while Black Friday is still a popular day for physical shoppers, with retailers still earning the bulk of their revenue from in-store purchases, physical retail sales on the whole have been slowing down. Large retailers, such as Macy’s and Sears as well as brands such as J.C. Penney and Guess, have shuttered stores across the country as consumers turn to e-commerce for the convenience of shopping in their own homes.

“American retailers are still struggling to even achieve omnichannel retail, as compared to Chinese retailers which have great support from Alibaba and other large e-commerce platforms,” Tiffany Lung, analyst at retail innovation and technology solutions company Tofugear, said. “These players believe in integrating online and offline retail to achieve a holistic, unified commerce approach.”

Initial Singles’ Day shopping festivals saw online merchants giving consumers deep discounts on items, but in recent years retailers and even the e-commerce platforms themselves have sought to better engage with users by encouraging online shoppers to earn more discounts by sharing a deal with friends, playing a game and even collecting online vouchers from individual merchants for use during the Singles’ Day event itself.

Chinese e-commerce platforms have also become more innovative in their sales strategies, attracting consumers with gimmicks that include entertainment, events, pop-ups and gamification of sales to keep consumers interested, Lung said.

However, analysts were quick to point out that big e-commerce players like Amazon will continue to dominate sales for Black Friday and Cyber Monday in the future, especially as retail continues to shift online.

Amazon is the second-largest US retailer and is likely to catch up with Walmart’s gross merchandise volume – a measure of total transactions processed – between 2020 and 2021, according to a JP Morgan retail report published in May this year. Walmart is the world’s top retailer, with US$495.8 billion in revenue last year.9

“Fundamentally the power of a retail ecosystem is being able to put everything together, be it shopping, delivery, payment and merchandising, in one place, so that customers get more convenience and a much better experience,” Bain’s Cheng said, pointing out that Amazon is doing that in the US, offering everything from books to merchandise, groceries and entertainment content.

“Retail today is not just about selling a carton of milk any more, it’s about selling products and services, leveraging others to make your platform stronger … to gain market share.”

At the end of the day, when ecosystems like Alibaba or Amazon are built up in countries like China and the US, the reality is that merchants will have to participate and join these platforms or lose out.

“As a brand in China for example, you can’t just say you won’t participate in Singles’ Day any more because platforms like Alibaba are creating such an integrated shopping experience [online and offline],” Cheng said.

“There’s not really an option for retailers to not participate and strike out on their own.”