How Will Wanaartha Life Case Affect Insurance Industry?

By Editorial Team 06/12/2022
Investigating Fund
Summary

The Financial Services Authority (OJK) has revoked the business license of PT Asuransi Jiwa Adisarana Wanaartha (Wanaartha Life/PT WAL). OJK's Non-Bank Financial Industry Supervision (IKNB) chief executive Ogi Prastomiyono revealed that the decision was taken because the company could not meet a minimum risk-based capital (RBC) of 120 percent as per the OJK regulation.

"PT WAL is unable to cover the difference in liabilities with assets, either through a capital injection from controlling shareholders or inviting investors," he explained in a virtual press conference on Monday. PT WAL cannot meet these requirements by the deadline set by the OJK on Nov 30.

The huge difference between liabilities and assets is an accumulation of losses due to the sales of savings plan-like products. PT WAL sold them with fixed returns but could not meet the term. "This condition was engineered by PT WAL so that the financial reports submitted to OJK and published financial reports did not match the actual conditions," Ogi continued.

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