Privately-owned insurer PT Asuransi Jiwa Kresna (Kresna Life Insurance) is preparing a scheme to pay out its policyholders, as the company reels from the impact of COVID-19 on its finances.
The company announced on May 14 that it would postpone insurance claim and benefit payments for Kresna Link Investa (K-LITA) and Protecto Investa Kresna (PIK) policyholders, citing force majeure as its reason. The details of the scheme will be disclosed to its policyholders as late as 30 days from the date of the notification letter issuance on May 14, Kresna Life announced in a statement on Monday.
“The policyholders’ interest is our main priority. Therefore, we will continue to try our best to settle it in good faith by prioritizing our obligations to all policyholders,” president director Kurniadi Sastrawinata said in the statement.
The insurer also asked policyholders for understanding, as it claimed the economic impacts of the COVID-19 pandemic were behind its failure to pay their policies.
The economic and stock market crises caused by the pandemic have reportedly affected the insurer’s liquidity for its underlying investments, which led to it delaying and halting its policy payments temporarily, according to its notification letter.
The delay applies to the payout for maturing policies from Feb. 11, 2020, to Feb. 10, 2021, as well as investment benefit payment claims due between May 14, 2020, and Feb. 10, 2021.
“The adjustment to the amount of policy and investment benefits, along with the payment procedure, will be conducted after Feb. 11, 2021,” it stated.
However, Kresna Life is not alone, as other insurers have encountered similar troubles. Previously, ailing life insurer Asuransi Jiwa Bersama (AJB) Bumiputera was said to have been facing difficulties paying its policyholders’ claims following turmoil within the insurer’s organization since 2016.
State-owned insurer PT Asuransi Jiwasraya has also been in the spotlight following its failure to pay its customers’ matured policies worth Rp 16 trillion (US$1.07 billion) due to investment mismanagement.
On Jan. 24, the AGO ordered the suspension of 800 securities accounts related to Jiwasraya as part of its ongoing investigation to uncover alleged corruption at the ailing insurer. The move led to privately-owned life insurer PT Asuransi Jiwa Adisarana Wanaartha (WanaArtha Life) suffering from liquidity problems.
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