Indonesian Court Cancels Revocation of Kresna Life Business License

INSURANCE - JAKARTA. The Jakarta State Administrative Court (PTUN) has issued a ruling to grant the lawsuit of the Plaintiffs, namely Plaintiff I PT Duta Makmur Sejahtera and Plaintiff II Michael Steven, against Defendant I the Board of Commissioners of the Financial Services Authority (OJK) of the Republic of Indonesia and Defendant II the Executive Head of Insurance, Guarantee, and Pension Fund Supervision of the OJK related to the licensing case of PT Asuransi Jiwa Kresna. The case number is 475/G/2023/PTUN.JKT..

Based on Kontan's observation at the SIPP PTUN Jakarta, the Plaintiffs filed their lawsuit on September 21, 2023. According to the ruling of February 22, 2024, PTUN Jakarta granted the lawsuit of the Plaintiffs, which ordered the Defendants to revoke the Decision on the Revocation of Business License in the Field of Life Insurance for PT Asuransi Jiwa Kresna (Kresna Life).

The content of the ruling is that PTUN declares the Stipulation of Postponement Number 475/G/2023/PTUN.JKT, dated February 22, 2024, remains valid and in effect. In addition, it declares that the exceptions of Defendant I and Defendant II are not accepted.

Meanwhile, PTUN decided In the Main Case, namely granting the lawsuit of the Plaintiffs and the Intervening Plaintiffs in full. PTUN declares Null and Void regarding the Decision of the Board of Commissioners of the Financial Services Authority Number KEP-42/D.05/2023 dated June 23, 2023, About the Revocation of Business License in the Field of Life Insurance for PT Asuransi Jiwa Kresna.

PTUN also declares Null and Void regarding the Written Order of the Executive Head of Insurance, Guarantee, and Pension Fund Supervision of the Financial Services Authority Number S-30/D.05/2023 dated June 23, 2023.

Therefore, PTUN obliges Defendant I to revoke the Decision of the Board of Commissioners of the Financial Services Authority Number KEP-42/D.05/2023 dated June 23, 2023, About the Revocation of Business License in the Field of Life Insurance for PT Asuransi Jiwa Kresna. In addition, it obliges Defendant II to revoke the Written Order of the Executive Head of Insurance, Guarantee, and Pension Fund Supervision of the Financial Services Authority Number S-30/D.05/2023 dated June 23, 2023. PTUN fines Defendant I and Defendant II to pay court costs amounting to IDR 452,500.

Regarding this, the Legal Representative of the Policyholder (Pempol) of Kresna Life, Benny Wullur, explained that Kresna Life is no longer in liquidation. He said that with the PTUN ruling, Kresna Life is demanded to be able to optimally run the company so that the policyholder's funds can be returned.

"After the business license revocation is canceled, in my opinion, the shares should be able to rise again," he told KONTAN.

Benny explained that most likely the SOL scheme will still be implemented by Kresna Life. However, he hopes that Kresna Life can recover first.

Benny said that his party may sue the OJK in the future regarding unlawful acts. This is because the OJK's decision is considered to harm the interests of many policyholders.

"It can be said that the OJK was wrong in setting the policy of revoking business licenses and can be considered discriminatory as well. So, policyholders can sue the OJK on suspicion of unlawful acts," he revealed.

Benny mentioned that his party will first see the OJK's actions. If, for example, they appeal and further complicate the policyholders, of course, a lawsuit against the OJK could be filed.

Regarding the lawsuit for unlawful acts, he stated that the policyholders have made peace with Kresna Life through the SOL scheme. However, the OJK still revoked the business license and it is considered an incorrect action.

"With the revocation of the business license, of course, the policyholders feel disadvantaged. If they want to revoke the business license, the OJK can certainly do it when the policyholders' losses are only tens of billions, not when they are already in the trillions," said Benny.

One of the Kresna Life policyholders, Christian Tunggal, welcomed the PTUN ruling that requires the revocation of the OJK's decision on the revocation of Kresna Life's business license.

"Because the majority of customers agree with the Subordinate Loan (SOL) scheme and want to settle it through peace by installments. If the business license is revoked and only liquidation is done, we see minimal results and cannot fully return the policyholders' money," he revealed to Kontan.

Christian mentioned that unless the OJK can guarantee that liquidation will be able to return 100% of the policyholders' money, of course, revoking the business license is not a problem for the policyholders.

Reflecting on the liquidation case of Wanaartha Life Insurance, he believes that the result of liquidation only distributes the existing company assets, there is no effort to find assets outside the company assets. Thus, the policyholders' money may not be fully returned.

Christian conveyed that the OJK should be on the side of the policyholders and strive so that the policyholders' money can be returned maximally, not just thinking about how the case of the insurance company's failure to pay that it supervises can be quickly resolved by distributing the not-so-much assets.

He reiterated that the SOL scheme is better for both parties, whether policyholders or Kresna Life.

"We consider Kresna Life quite committed to carrying out the agreement made. If they are given the opportunity and they are not committed, of course, they already know the risks and can be subject to criminal penalties until the company can collapse completely," said Christian.

Meanwhile, Insurance Observer Irvan Rahardjo in his testimony believes that the failure of an insurance company to pay does not happen instantly, but through a series of supervisions that are the authority of the OJK. He said that every period the insurance company is obliged to submit a report on the health condition and management of the company to the OJK.

"The OJK that does not take supervisory action against companies that violate provisions, but directly revokes business licenses shows that the OJK, which has authority, has not fully fulfilled its obligations. Thus, the decision issued by the OJK in the form of revoking a business license for an insurance company can be sued by policyholders whose interests are harmed by the decision," he said.

Irvan explained that the SOL scheme implemented by Kresna Life as a form of restructuring cannot be canceled by anyone because it is a manifestation of freedom of contract or the principle of pacta sunt servanda which is regulated in article 1338 of the Civil Code and OJK regulations.

If later the revocation of the business license no longer applies, Irvan predicts that Kresna Life can operate normally again. This is because the public considers the Controlling Shareholder (Michael Steven) has good intentions by signing the SOL, to which 90% of policyholders agree. In addition, Michael Steven has never run away.

This is certainly different when compared to the Wanaartha Life case where the Controlling Shareholder ran away and could not be held accountable.

"If Kresna Life is restored to operate again by transferring the policy debt to SOL as participation, then theoretically their Risk-Based Capital (RBC) will recover. With the recovery of the RBC, they can invite investors so that the company can operate normally," Irvan told Kontan.

Meanwhile, the OJK stated that it has received information about the PTUN ruling on the cancellation of Kresna Life's business license revocation. However, it will still be studied first.

"We have received the information, but we are still waiting for the decision letter to study the ruling and to prepare the next steps," revealed the Deputy Commissioner of Insurance, Guarantee, and Pension Fund Supervision of the OJK, Iwan Pasila, to Kontan.

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Editor: Syamsul Azhar