Indonesian govt may inject $1 bln into troubled state insurer Jiwasraya

GAGAL BAYAR JIWASRAYA - JAKARTA. Indonesia may inject around 15 trillion rupiah ($1.09 billion) of capital to the financially embattled life insurer Asuransi Jiwasraya to help the state firm pay off maturing policies, a lawmaker said on Tuesday.

The capital injection was among four options the government has proposed to parliament to help Jiwasraya meet its outstanding obligations to millions of policyholders, said Aria Bima, who chairs parliament's special committee overseeing issues related to the insurer's financial troubles.

"We want Jiwasraya to begin to return customers' money in instalments by the end of March," Bima told reporters, without explaining the other options the government had presented.

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Jiwasraya needed to top up its capital by 32.9 trillion rupiah to stay afloat and it also owed about 16 trillion rupiah to policyholders, according to company documents as of November 2019.

The government had last year ruled out bailing out the insurer, opting to find other ways to improve the firm's balance sheet.

According to a copy of the government's proposal document to parliament, the proposed injection would not be labelled as a bailout, but a "bail-in", which was described as a company's biggest stakeholder taking up responsibility to clear up its financial woes. Jiwasraya is 100% state owned.