Fixing a Broken Insurance

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  • TEMPO.CO, JakartaTHERE is an unpleasant aroma apparent if we compare the enforcement of the law in the corruption case at Asuransi Jiwasraya with that at Asuransi Sosial Angkatan Bersenjata Republik Indonesia or Asabri.

    In the Jiwasraya case, the Attorney General's Office worked hard to prosecute the perpetrators, some of whom are now serving life sentences. However, in the Asabri case, the police investigation has been stalled for 10 months.

    This difference has of course left a huge question mark. After all, some of the people allegedly behind the Asabri corruption were also involved in the embezzlement of Rp16.8 trillion from Jiwasraya. Benny Tjokrosaputro and Heru Hidayat, the two tycoons who were the masterminds of the corruption at Jiwasraya, have also been mentioned as being responsible for the losses to the state exceeding Rp10 trillion at Asabri. We hope the public will not begin to suspect that law enforcers lack the courage to touch a corruption case seemingly involving senior military officers.

    After all, the Investigative Audit Report on the Asabri Share Investments from 2012 to 2017 by the Finance and Development Supervisory Agency (BPKP) has uncovered the corruption method used in the military insurance company. The audit report released in December 2019 detailed how the Asabri management gave Benny and Heru the authority to invest trillions of rupiah in managed funds from the salary deductions of hundreds of thousands of military personnel. This cannot be categorized as ordinary negligence. There are criminal elements and losses to the state involved.

    As a result of these crooked practices, Asabri is unable to provide optimum benefits for the military personnel, police officers and pensioners who hold its insurance policies. For years, the pensions paid out have been less than the provincial minimum wage in Jakarta. The total savings and other benefits policyholders obtain after serving the nation for decades are far less than those received by other state employees.

    An investigation back to the source shows the predictability of this situation. Last year, the Supreme Audit Agency (BPK) discovered that the total accumulated funds from Asabri pension contributions decreased by Rp7.52 trillion to Rp17.66 trillion. However, in the same period, funds managed by Taspen, a state-owned insurance company for civil servants, increased by Rp25.26 trillion to Rp151.42 trillion. The fact that Asabri is managed by generals, and not by professional investment managers, is bound to have played a significant role in these losses.

    These findings by the BPKP and the BPK are enough to prosecute the people responsible for the plundering of Asabri. Given the court verdicts handed down to the suspects in the Jiwasraya case, there is no more reason for the police to delay the resolution of this case.

    In the future, there must be comprehensive reforms within Asabri. Allowing an insurance company that should provide the maximum benefits for military personnel, police officers, and the ministry of defense employees to be managed in such an arbitrary fashion is an error by the government that cannot be tolerated. After the disappearance of trillions of rupiah from salary deductions of military personnel, it is time State-Owned Enterprises (SOEs) Minister Erick Tohir, as the representative Asabri shareholder, took swift action. It is alarming to see our retired military personnel being forced to seek additional work because their pensions from Asabri are insufficient.

    Indonesian Military Commander Chief Air Marshall Hadi Tjahjanto and Defense Minister Prabowo Subianto must also take action. They must urge Asabri management to be transparent and to not obstruct police investigation. The two men must also support the plan by the SOEs ministry to reform state insurance companies. The military should no longer be involved in matters outside its area of competence.

    Although it is late, the government is right to push for the implementation of Law No. 40/2004 on the national social security system and Law No. 24/2011 on the social security organizing agency. Under these laws, the pension funds and retirement savings programs of Asabri -- and Taspen -- must immediately be transferred to the BP Jamsostek social security program. It is hoped that this transfer will improve the quality of the social security guarantee provided by the state to retired military personnel and police officers.

    The secretive and unprofessional Asabri management has resulted in a heavy price to be paid. As a result of this mismanagement, hundreds of thousands of retired military personnel and police officers do not have enough money for their daily needs. This is ironic given that Asabri has been managed by generals. The state must not allow this disparity to continue.

    Read the Complete Story in Tempo English Magazine