Jiwasraya - Additional 13 Companies Named

After around six months of investigation, the Attorney General’s Office (AGO) has named 13 asset management companies and a Financial Services Authority (OJK) official suspects in a case of alleged corruption and money laundering surrounding state-owned insurer PT Asuransi Jiwasraya.

Jiwasraya is accused of mismanagement when it invested its premium revenue from the JS Saving Plan, one of the company’s insurance products, in multiple assets. As a result, it failed to pay out Rp 16 trillion (US$1.1 billion) in matured policies due in February to its policyholders.

AGO spokesman Hari Setiyono said that the OJK deputy commissioner for capital market monitoring, identified only as FH, was a new suspect in the case. The office accused him of abuse of power, which allegedly paved the way for Jiwasraya's investment mismanagement during FH’s tenure as OJK department head of capital market monitoring from 2014 to 2017.

The department head of capital market monitoring at the OJK from 2014 to 2017 was Fakhri Hilmi.

Hari also announced that 13 asset management companies were named suspects in the case. The AGO accused the companies of mismanaging or laundering the premium revenue collected by Jiwasraya from 2014 to 2018.

The companies allegedly caused state losses amounting to Rp 12.35 trillion, 73.46 percent of the total Rp 16.81 trillion in state losses incurred by Jiwasraya’s investment mismanagement as audited by the Supreme Audit Agency (BPK) from 2008 to 2018.

The AGO is also looking into possible reasons as to why Jiwasraya decided to entrust the companies with managing its funds.

Prior to the announcement, the AGO had named six suspects in the case including three former Jiwasraya executives, namely former president director Hendrisman Rahim, former finance director Hary Prasetyo and former finance and investment division head Syahmirwan.

The office also named three other suspects: publicly listed property firm PT Hanson International president director Benny Tjokrosaputro, publicly listed mining company PT Trada Alam Minera president commissioner Heru Hidayat and PT Maxima Integra director Joko Hartono Tirto.

The naming of new suspects follows the AGO’s move this month to track down the flow of investment by Jiwasraya. The office has questioned almost 30 witnesses, ranging from asset management executives and OJK officials to former Indonesia Stock Exchange executives, from June 2 to June 23.

The questioning is part of the AGO's investigation of the case after issuing a letter ordering the start of the investigation on Dec. 27, two months after former State-Owned Enterprise Minister Rini Soemarno filed a report regarding alleged fraud at the state-run insurer with the AGO in October.

The following is a list of the 13 companies that were named suspects:

1. PT Dhanawibawa Manajemen Investasi/Pan Arcadia Capital
2. PT OSO Manajemen Investasi
3. PT Pinacle Persada Investasi
4. PT Milenium Danatama
5. PT Prospera Aset Manajemen
6. PT MNC Aset Manajemen
7. PT. Maybank Aset Manajemen
8. PT GAP Capital
9. PT Jasa Capital Aset Manajemen
10. PT Pool Advista Asset Management
11. PT Corfina Capital
12. PT Treasure Fund Investama Indonesia
13. PT Sinarmas Aset Manajemen

Remdesivir US$2,340 Treatment For Covid-19

Drugmaker Gilead Sciences announced its pricing plans for remdesivir, an antiviral COVID-19 drug candidate, saying the treatment will cost $520 per dose for U.S. private insurance companies and $390 per dose for the U.S. government.

For a majority of people who receive a five-day treatment of the drug using six vials (based on current patterns), the total charged to hospitals for patients with private insurance in the U.S. will be $3,120. For those under U.S. government health programs, the total will be $2,340 per patient.

The costs do not represent out-of-pocket costs with a patient using private insurance. That amount would depend on the type of plan they have.
Gilead originally developed remdesivir to treat patients with Ebola virus disease. In May, the Food and Drug Administration authorized the drug for emergency use to treat patients hospitalized with severe cases of COVID-19. Since then, the U.S. government has been distributing treatment courses of remdesivir that were donated by Gilead.

GE Invest In Boost

Great Easter Life Assurance, the largest life insurance company in Singapore and Malaysia, will be investing $70 million into Axiata Digital's financial services business, in order to take part in the company’s Fintech-focused plans. 

The investment will be made through a newly launched holding company, called Boost Holdings. Boost Holdings is a wholly-owned subsidiary of Axiata Digital, a digital services division of the Axiata Group. Great Eastern will have a 21.875% stake in Boost Holdings. Axiata Digital Services will be holding the remaining stake in the company.

Malaysia-based Boost has more than 7.5 million users and around 170,000 merchant touchpoints. Axiata Digital’s financial services business will include Boost Indonesia and Trust Axiata Digital , a joint project with a bank in Bangladesh. The company’s financial services will also be launched in other Asian markets.

Life Insurance Beneficiary

If you know you’re a beneficiary on a life insurance policy, you have protection for your financial future. Life insurance is often purchased to make sure that family members can pay bills, go to college or even support a family business if the insured person passes away.

Sometimes another person owns a policy and has made you the beneficiary, such as a parent who intends to have a payout go to an adult child. In other cases a person owns a policy on someone else and is also the beneficiary, such as someone who has insurance on their spouse.

Here are important things to know about payouts to life insurance beneficiaries.

You Don’t Need the Paper Policy in Order to Make a Claim - We all know that paperwork can get lost over the years, such as a life insurance policy. But if you’re a life insurance beneficiary, you don’t need to hunt for paperwork to start a claim. You only need to know the name of the life insurance company. From there, you can contact the insurer to let them know of the death of a customer and get the claim form.

You Will Need a Certified Copy of the Death Certificate - Once you have the claim form from the insurance company, you’ll also need a certified copy of the death certificate. Then you’ll be ready to submit the paperwork and make your claim.

The Life Insurance Payout Is Tax-Free - Life insurance benefits are paid tax-free to the beneficiaries, no matter how large the amount is. You don’t have to report life insurance proceeds as income, unless the policy was transferred to you for cash or other “valuable consideration,” which doesn’t apply to most beneficiaries.

You Might Not Get the Full Policy Face Amount - The face amount is the amount of money stated on an application, such as $1 million. But it may not be the amount available to beneficiaries after the death of the insured person.

If the policy was a cash value life insurance policy, and the policy owner took withdrawals against the cash value or loans that weren’t paid back, the life insurance company will reduce the payout accordingly.

For example, if the policy face value was $1 million but the policy owner took a $50,000 loan from cash value and didn’t pay it back before death, the life insurance payout will be reduced by $50,000 plus any loan interest. Since a beneficiary may not know about a policy owner’s actions, this could be a surprise. 

The Company Can Only Pay the People Listed as Beneficiaries - A life insurance policy is a contract, and the insurance company is obligated to pay only claims made by the beneficiaries listed on the policy. The life insurance contract also overrides any heirs named in a will. So even if someone else is arguing that they deserve the money and are going to make a claim, talk like that is inconsequential if they’re not listed on the policy.

You Don’t Have a Right to Know Who Other Beneficiaries Are - The life insurance contract outlines each beneficiary’s percent of the payout. It’s possible that you could make a claim and find that you’re one of multiple beneficiaries. So who are the other people? The life insurance company keeps that private. Similarly, someone who’s not the policy owner can’t call up the life insurance company and find out who the beneficiaries are on someone else’s policy. 

You Might Not Know If the Policy Lapsed - People often avoid discussing their finances. Money and decisions over the years could have impacted a policy on which you were a beneficiary, and you won’t know it unless someone tells you. If a policy owner stopped paying and let a policy lapse, there’s no payout to collect. If the payments stopped recently—for example, because the policy owner was ill in the last month of life—you can likely pay the back premiums and still make the claim.

Don’t Wait for a Life Insurance Company to Find You - A life insurance company doesn’t necessarily know right away that an insured person has died. If you know you’re a life insurance beneficiary, you should be proactive and contact the company to start a claim.
Under legal settlements in recent years with many states, insurers are now required to regularly check for the deaths of policyholders. They do this by checking their customer lists against a government database of deaths.

You’ll Likely Have Choice for the Payout Method - You don’t necessarily have to take the entire life insurance payout in one lump sum. Insurers typically offer choices for receiving the money, such as:
1: One lump sum

2: Installment payments, such as equal installments over five years.
3: Regular payments for the rest of your life. Much like an annuity, the insurance company offers regular payments for the rest of the beneficiary’s life. But once the beneficiary passes away the payments stop, even if the original death benefit hasn’t been fully paid yet.
4: And possibly other options.

You’ll Probably Have the Money Within a Month - Once you’ve submitted the claim paperwork (claim form and death certificate), payment can be fast. It could be within a week in some cases, but you should generally have the money within 30 days.

Selling Insurance During Covid-19

Selling life insurance products in a pandemic is difficult, but one industry veteran reminds agents not to abandon the important techniques that connect them with clients.

The most important thing is to make the connection. That means a phone call, progressing to a possible conference call. Agents should be trying to connect with prospects, while doing check-in calls with existing clients. Those time-tested techniques -- reading body language, or sighting a family photo as a means to spark a conversation -- are not likely to be there.

But that just means agents need to work harder at basic communication. It still requires you to ask questions … that allow the client, the prospect to talk. So while the technique is not face to face, the methods that we are using are the same as they’ve always been. We just have to become better listeners. And it’s really important to listen to not only what they’re saying, but how they’re saying it. 

No Script, No Negativity - Using a script is not recommended for these social distancing client calls. It is important to sound conversational and make connections. If you have a certain area that you want to discuss you may want to jot down some notes so that you cover everything that you want to discuss. Have something sitting next to the phone that you can refer to. How often do you do that? Not too often, but it’s there.

Likewise, it is important not to bemoan the virus, state of the economy, politics or anything else in a negative way. While it is important to connect with clients and prospects, that is not the way to do it. It’s just a matter of asking the open-ended questions and putting the person at ease.

Instead, it is good to remind people the protections offered by life insurance during a crisis. Many people don't realize the versatility of life insurance to provide money in times like the present. Follow-ups are just as important as ever. Scheduling a simple review of policies and coverage will sometimes yield an unforeseen need.

COVID-19 Impact - It is unlikely that insurers will require a COVID-19 vaccination as a hurdle to coverage. Still, by the time 330 million people get vaccinated, it's likely that an entirely new flu strain will be a greater threat, Feldman noted, adding that he doesn't expect insurers to require COVID-19 testing either.

Some long-term lessons are being learned from the pandemic is how to be more efficient. And carriers have had to adapt to a new reality. Many insurers have capped life insurance at age 70 or 75, for example.

One thing many companies are doing is offering exclusive opportunities for additional coverage or products to policyholders who bought products within the past two or three years. There are quite a few companies out there doing this to stimulate business.  Go back to that company and ask, 'Do you have something like this available?'"

Otherwise, it is possible the COVID-19 emergency will soften up hard prospects. It's worth explaining to younger prospects just how much coverage they can get for the price of a daily Starbucks coffee.

Some prospects might not be in position to take out all the coverage they want, but might want a short-term policy to cover themselves for the next few years. Be creative and open-minded. Maybe the decision we recommend is not the decision we would normally recommend but it will get them through this short term.

Universalizing Life Insurance

Universalizing life insurance can help citizens in case of a financial crisis, whether at individual or national level, during their lifetime as well as after death. 

Covid-19 has shaken up many well-established socio-economic values. The dreaded virus has severely challenged age-old methods and the means of production in factories, farms and in the offices. It is also redefining the whole concept of supply and distribution of goods and services.

It has thrown up challenges for those who survive the pandemic and draw up innovative strategies for society to limp back to normalcy. The infected are to be treated and saved but those who are not affected need to be provided not only a safety net but also food and other essentials which they are unable to afford. The lockdown has affected the income of many people and has forced reverse migration of the workforce from places of employment to their native places causing a severe disruption to commercial activities.

Lesson from the crisis - One important lesson from the current crisis is the need to adopt the concept of self-reliance at the individual level. The government must resist the temptation to jump forward to announce a bouquet of relief measures. It is not at all a viable strategy. The last three months have taught us several lessons. Along with fire fighting measures, the policymakers and the citizens at their own level must find out what could be the best safety net.

I strongly believe that life insurance, on a much wider scale and in all its forms and options, is the most scientific tool to mitigate hardship of individuals as well as of the state during such, mostly unforeseen, crisis. The very concept of life insurance is based on the principle of financially dealing with unforeseen crises in one’s life.

Role of insurance - The insurance business slowly but scientifically builds up monetary reserves to help policyholders in distress. Their fund which is actuarially validated never fails to honor all its commitments. The commitments generally provide funds to the distressed policyholders during their life time as well as after death. The protection is more comprehensively available through a combination of different plans and riders that one is free to choose.

Loan under an endowment policy can help a policyholder during the two to three months when salary is withheld or not paid at all. If life insurance is universalized through more socially oriented marketing by the insurers or through government policy that supports such a universal coverage, the hardship being faced by millions of working-class people uprooted following the lockdown could be mitigated.

Whenever an accident happens, the government rushes in to announce a certain lumpsum amount for the families of the deceased or of the injured. This is obviously at the cost of the exchequer. It may also happen that the dole is just given without assessing whether it was needed. If the PM’s Suraksha Bima Yojana is compulsorily provided to each citizen then where is the need to dole out ex-gratia amount.

Similarly, instead of knee-jerk announcements of lumpsum relief in case of death due to accident or any other cause, the PM’s Jeevan Jyoti Bima Yojana can be a wonderful support to the family in distress.

Hence, instead of ad hoc relief the government must ensure universal acceptance of such insurance schemes. Insurance penetration is woefully low in India. The purpose of opening the sector 20 years ago is still a distant dream. But everyone, the general public, the insurers and the government must work for universalising life insurance for protecting the population in case of unexpected financial crisis at individual or national level.

It is observed that in the current life insurance landscape there are vast segments of middle and lower middle class population which are grossly underinsured or uninsured. Hence, through use of artificial intelligence and comprehensive digitisation, full potentiality in the market must be harnessed because life insurance develops self-reliance among the people and saves the economy from avoidable stress during difficult times.

Author: Kamalji Sahay

Bayer Settles US$10.9 Billion Lawsuit

German pharmaceutical company Bayer says it’s paying up to $10.9 billion to settle a lawsuit over subsidiary Monsanto’s weedkiller Roundup, which has faced numerous lawsuits over claims it causes cancer. In a statement Wednesday, Bayer said it was also paying up $1.22 billion to settle two further cases, one involving PCB in water.

The Leverkusen-based company said the Roundup settlement would “bring closure to approximately 75%” of the current 125,000 filed and unfiled claims.

It said the agreement is subject to approval by Judge Vince Chhabria of the U.S. District Court for the Northern District of California.

Bayer said it would also pay up to $400 million to settle cases involving the weedkiller dicamba having drifted onto plants that weren’t bred to resist it, killing them.

A further payment of up to $820 million will be made to settle “most” claims for exposure to PCB, a highly carcinogenic substance, that Monsanto produced until 1977 and which has been found in U.S. waters

Bayer said it would start making payments this year and these would be financed from existing liquidity, future income, proceeds from the sale of its animal health business and the issuance of additional bonds.

BPJS-Kesehatan - Alternative To Raising Premium

Since July last year, the agency managing Indonesia's national health insurance – known as BPJS-Kesehatan – has been suffering an estimated deficit totalling Rp 28 trillion or around US$1,998 million. That's more than triple the deficit at the end of 2018 .

The COVID-19 pandemic is expected to worsen this. At least 1.9 million Indonesian workers are unemployed as a result. This economic hardship will likely reduce the number of enrolled members and cause a significant revenue loss for BPJS Kesehatan.

To support the agency, the government plans to increase national health insurance premiums from July 1 2020.

Under the plan, the government will raise the premium for first-class health service by 87.5% to Rp 150,000 per month per person, for second-class service by 96% to Rp 110,000, and for third-class service by 65% to Rp 35,000.

However, this move only addresses short-term problems. It does not tackle the structural issues the BPJS faces, ranging from its revenue-generation strategies to its health service priorities.

We will first show you why the premium rises are not the best solution. We have also identified four other effective strategies to achieve sustainable and inclusive national health insurance to ensure all Indonesians get equal access to health care.

Why raising premiums is not the best solution - Under BPJS-Kesehatan, Indonesia is running the world's largest universal health insurance scheme . It has about 224 million members, covering more than 80% of the population, including 96 million poor individuals.

The scheme is Indonesia's attempt to provide universal health coverage. This means all Indonesians should have access to health services regardless of their economic status.

The raised premiums will only hurt that attempt, as access to health services will be limited to people who can afford it. Those who can't afford the premiums may end up being excluded from the health-care system or may have to downgrade their memberships.

Only one-third of the 74 million informal workers in Indonesia are receiving government subsidies for insurance premiums. The remaining two-thirds are required to join the national health insurance independently.

As of 2019, only half of the independent members paid the premiums. Assuming this is a reflection of the group's ability to pay, raising the premiums will further reduce the ability of these vulnerable groups to buy health insurance. Informal workers who are relatively healthy and fit will likely opt out of the insurance membership.

Motivation to pay is another important factor. Many existing members who maintain their membership are motivated by a high need for health care due to existing illness . One of the most telling signs is that the independent members group consistently has a very high claim ratio .

The increase in premiums does little if anything to address this selection bias in membership. Instead, it might further discourage some people from continuing to pay their premium if they cannot foresee that they will use their health insurance. The healthy will be more likely to drop out. Those who stay are the ones who are 'sick'.

Ideally, a national health insurance scheme should support services to keep the population healthy by delivering basic curative and preventive services, to curb the need for more expensive hospitalisation costs. In reality, a high proportion of BPJS-Kesehatan's budget is still used to pay hospital bills associated with chronic diseases, which should be prevented at primary care level . From 2014-2016, nearly 80% of BPJS Kesehatan's annual spending was on secondary and tertiary health-care facilities.

Thus, it is fair to say the national health insurance program is still at its core a 'sickness insurance'. Raising premiums will not be effective if BPJS still prioritises high-cost health services for the sick.

Alternative solutions - while everything else in the health system is unchanged – is not the best policy option. We suggest other pressing strategic, structural approaches need to be adopted.

First, we need to better identify people who can contribute more. The current class system is irrelevant to members' ability to pay and should be evaluated. Standardised, instead of tiered, services arguably can promote fair health service delivery to all insured members.

Premiums could be calculated based on income brackets instead. To do this, BPJS Kesehatan can collaborate with the Ministry of Finance's Tax Directorate General.

Second, mandatory universal health insurance membership for every citizen will ensure a reasonable amount of funds pooled from the public. The government can enforce this with an improvement in data updates and verification of the poor and near-poor population, so the government subsidy is allocated properly.

Third, BPJS Kesehatan can reorient the current health-care delivery towards a preventive model. To promote this approach, the government should strengthen the role of community health centres as the backbone of preventive care and chronic disease management. The government should also strengthen co-operation and integration between public and private sectors at the primary care level .

Lastly, BPJS-Kesehatan itself must promote transparency. Local health officials and the general public have complained about BPJS Kesehatan's lack of transparency, which deters people from enrolling.

Opening critical data to public scrutiny is a powerful tool to support an effective response mechanism within BPJS-Kesehatan. It also prevents administrative frauds such as double claims from happening. Without transparency and accountability, the public will always question the trustworthiness and legitimacy of BPJS-Kesehatan.

Author: Ade W. Prastyani

InDriver - No Insurance Protection

E-hailing drivers have been advised not to register themselves under the illegal InDriver e-hailing app as any mishap would not be covered by insurance. Malaysia e-hailing drivers association (MEHDA) said this purported e-hailing operator had been operating illegally for months in Penang.

Upon checks and confirmation from the Land Public Transport Agency, the said company does not have a Business Mediation License to operate, making it an illegal e-hailing operator. Following more complaints and investigations, we found that InDriver, despite being illegal, allows e-hailing drivers to sign up and go online using the app to ferry passengers without having a valid public service vehicle license.

All e-hailing drivers are encouraged not to use the InDriver app, because in the event of any mishap during rides, the illegal status of InDriver and their drivers would mean both passengers and drivers are not covered by insurance while on the road. This would also lead to further complications should there be accidents along the journey.

GNC Files For Bankruptcy

GNC has filed for bankruptcy, warning it will close up to a quarter of its stores and search for a buyer. The 85-year-old vitamin and dietary supplement company has been saddled with nearly $1 billion of debt and has faced declining sales at its brick-and-mortar locations since before the pandemic. 

However, GNC said that stay-at-home orders during the Covid-19 pandemic prevented the company from accomplishing its refinancing plans because of the abrupt "dramatic negative impact" on its business.

GNC will continue operating, but it will become a smaller company. It plans to close up to 20% of its 5,800 retail stores, which amounts to as many as 1,200 locations across the United States. GNC also sells its products in an additional 1,200 Rite Aid (RAD) stores.

It obtained $130 million in fresh financing from its largest vendor, vitamin supplier IVC, to help it restructure. GNC aims to emerge from bankruptcy in the fall.

GNC explained that bankruptcy will give the company an "opportunity to improve our balance sheet while continuing to advance our business strategy, right-size our corporate store portfolio, and strengthen our brands to protect the long-term sustainability of our company."

Around 30% of its stores in the United States and Canada were forced to temporarily close because of the pandemic. In its first-quarter earnings report released in May, losses accelerated to $200 million — far more than the $15 million it lost during the same time period in 2019 — because of the store closures.

Olympus Camera Exist After 84 Years

Olympus, once one of the world's biggest camera brands, is selling off that part of its business after 84 years. The firm said that despite its best efforts, the "extremely severe digital camera market" was no longer profitable. It had recorded losses for the last three years.

The market for standalone cameras has fallen dramatically - almost 84% between 2010 and 2018. The arrival of smartphones, which had shrunk the market for separate cameras, was one major factor, it said. 

The Japanese company made its first camera in 1936 after years of microscope manufacture. The Semi-Olympus I featured an accordion-like fold-out camera bellows, and cost more than a month's wages in Japan. The company continued to develop the camera business over the decades, becoming one of the top companies by market share.

The 1970s was a high point, with their cameras advertised on television by celebrity photographers. Those cameras were revolutionary - they were very small, very light, they were beautifully designed, had really nice quality lenses.

A cult following stayed with the firm, despite teething issues with new technologies such as autofocus. But the firm had a second wave with digital cameras, where they were early adopters. But they targeted their later range of mirrorless cameras at a middle market - people who weren't serious photographers - they wanted something better than a point-and-shoot camera, but they didn't want a DSLR camera. That market very very quickly got swallowed up by smartphones, and turned out not to exist.

Olympus Corporation, however, will continue. The company never stopped making microscopes, and has turned its optical technology to other scientific and medical equipment such as endoscopes.