Kresna Life had rectified the causes that had led to the imposition of the sanctions by meeting recommendations made in examination in February 2020 of the insurer by the OJK for the 2019 period. The sanctions had been imposed because Kresna Life was deemed to have violated provisions regarding the implementation of recommendations following the examination.
Measures
The OJK had found a number of violations committed by Kresna Life, especially related to a wealth management product, Kresna Link Investa (K-LITA). To rectify the situation, OJK had ordered Kresna Life to:
1. pay claims lodged by policyholders
2.prepare a financial restructuring plan that spells out steps to be taken by controlling shareholder to overcome Kresna Life problems, as well as a detailed claim payment plan
3. discontinue K-LITA products in February 2020, to prevent the risk of difficulty in paying claims
4. ensure the management and controlling shareholders of Kresna Life are responsible for their obligations to policyholders
5. submit a settlement plan for Kresna Life's obligations, supported by realistic sources of funds including additional capital or funds from other legitimate sources.
6. ensure the widest possible communication with policyholders.
Kresna Life has previously stated that it had to postpone payouts on two insurance products, namely K-LITA and Protecto Investa Kresna (PIK). Kresna Life also stated that it would open a dialogue with customers to complete settlement of policies for which payment had previously failed to be made.
The insurer has appointed a Policy Settlement Team (TPP) to assist Kresna Life to improve and improve communication with policyholders.
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