The Importance of Good Corporate Governance in Insurance Companies

Oct 13, 2025 by magicalceylontours.com 15 views

Accountability of Insurance Companies in Investment Governance Based on the Principle of Caution and Good Corporate Governance: A Case Study of PT Asuransi Jiwasraya

Introduction

In the context of state-owned companies, PT Asuransi Jiwasraya (Persero) has an important responsibility to apply the principles of Good Corporate Governance (GCG). This was done by the Board of Directors as company management, in order to achieve the expected goals. One crucial aspect that must be considered in the application of GCG is the management of customer wealth investment. In this effort, insurance companies not only have to comply with GCG, but must also apply the principle of caution (prudential principle) to maintain the company's financial health.

The Importance of Good Corporate Governance in Insurance Companies

Good Corporate Governance (GCG) is a set of principles and practices that aim to ensure the effective and efficient management of a company. In the context of insurance companies, GCG is particularly important as it helps to maintain customer confidence and trust. Insurance companies must have a strong and transparent internal control system, and conduct periodic evaluations of investment performance. This is essential to ensure that all investment decisions are taken by considering the overall risks and potential expected returns.

The Principle of Caution in Investment Governance

The principle of caution, also known as the prudential principle, is a fundamental principle in investment governance. It requires insurance companies to take a cautious approach when making investment decisions, and to prioritize the interests of customers. This principle is essential in maintaining the financial health of the company and ensuring that customers' investments are protected.

The Case of PT Asuransi Jiwasraya

The case of PT Asuransi Jiwasraya is a classic example of the importance of applying GCG principles and caution in investment governance. The company's failure to implement GCG and the principle of caution resulted in serious consequences, including the inability of the company to fulfill the obligations to the policyholder. This incident raises various questions related to the company's responsibility in managing the value investment that should be carried out by referring to the two principles.

Research Methods

This study uses a descriptive and analytical normative legal research method. The data source used is secondary data consisting of primary, secondary and tertiary legal materials. Data collection techniques are carried out through literature studies by analyzing various related literature sources.

Research Findings

The results showed a legal responsibility that could be imposed on PT Asuransi Jiwasraya. This is stated in Article 71 paragraph (2) of Law Number 40 of 2014 concerning Insurance. According to this provision, sanctions can be given by the Financial Services Authority (OJK) because the company does not carry out the actions that should be taken, as regulated in Article 31 paragraph (4) of the same law. This violation is evident from the management of investment which is part of the fiduciary obligation of the Board of Directors who violate Article 59 POJK Number 73/POJK.05/2016 concerning Good Corporate Governance for Insurance Companies.

Additional Analysis and Explanation

The application of the principle of GCG and caution in investment management is very important for insurance companies, especially in maintaining customer confidence. When the company fails to fulfill this responsibility, the impact does not only affect the company's reputation, but can also result in significant financial losses for policyholders.

Conclusion

In conclusion, the case of PT Asuransi Jiwasraya illustrates how important the application of GCG principles and caution in the insurance world. The lesson that can be taken from this incident is that every investment decision must be based on the interests of customers, and be carried out with full responsibility and transparency. Thus, insurance companies can avoid unnecessary risks and maintain their financial stability for the sake of business sustainability and customer protection.

Recommendations

Based on the findings of this study, the following recommendations are made:

Insurance companies must have a strong and transparent internal control system, and conduct periodic evaluations of investment performance.
The Board of Directors must prioritize the interests of customers and take a cautious approach when making investment decisions.
The Financial Services Authority (OJK) must ensure that insurance companies comply with GCG principles and the principle of caution in investment governance.
The government must establish a regulatory framework that ensures the effective implementation of GCG principles and the principle of caution in investment governance.

Limitations of the Study

This study has several limitations, including:

The study is based on secondary data, which may not be comprehensive or up-to-date.
The study focuses on the case of PT Asuransi Jiwasraya, which may not be representative of other insurance companies.
The study does not consider the impact of other factors, such as market conditions and economic trends, on the application of GCG principles and the principle of caution in investment governance.

Future Research Directions

Future research directions include:

Conducting a comprehensive study on the application of GCG principles and the principle of caution in investment governance in other insurance companies.
Examining the impact of other factors, such as market conditions and economic trends, on the application of GCG principles and the principle of caution in investment governance.
Developing a regulatory framework that ensures the effective implementation of GCG principles and the principle of caution in investment governance.
Q&A: Accountability of Insurance Companies in Investment Governance Based on the Principle of Caution and Good Corporate Governance

Q: What is the importance of Good Corporate Governance (GCG) in insurance companies?

A: Good Corporate Governance (GCG) is a set of principles and practices that aim to ensure the effective and efficient management of a company. In the context of insurance companies, GCG is particularly important as it helps to maintain customer confidence and trust. Insurance companies must have a strong and transparent internal control system, and conduct periodic evaluations of investment performance.

Q: What is the principle of caution in investment governance?

A: The principle of caution, also known as the prudential principle, is a fundamental principle in investment governance. It requires insurance companies to take a cautious approach when making investment decisions, and to prioritize the interests of customers. This principle is essential in maintaining the financial health of the company and ensuring that customers' investments are protected.

Q: What happened to PT Asuransi Jiwasraya?

A: The case of PT Asuransi Jiwasraya is a classic example of the importance of applying GCG principles and caution in investment governance. The company's failure to implement GCG and the principle of caution resulted in serious consequences, including the inability of the company to fulfill the obligations to the policyholder.

Q: What are the consequences of failing to implement GCG principles and the principle of caution in investment governance?

A: The consequences of failing to implement GCG principles and the principle of caution in investment governance can be severe, including:

Inability to fulfill obligations to policyholders
Loss of customer confidence and trust
Financial losses for policyholders
Damage to the company's reputation

Q: What are the recommendations for insurance companies to improve their investment governance?

A: Based on the findings of this study, the following recommendations are made:

Insurance companies must have a strong and transparent internal control system, and conduct periodic evaluations of investment performance.
The Board of Directors must prioritize the interests of customers and take a cautious approach when making investment decisions.
The Financial Services Authority (OJK) must ensure that insurance companies comply with GCG principles and the principle of caution in investment governance.
The government must establish a regulatory framework that ensures the effective implementation of GCG principles and the principle of caution in investment governance.

Q: What are the limitations of this study?

A: This study has several limitations, including:

The study is based on secondary data, which may not be comprehensive or up-to-date.
The study focuses on the case of PT Asuransi Jiwasraya, which may not be representative of other insurance companies.
The study does not consider the impact of other factors, such as market conditions and economic trends, on the application of GCG principles and the principle of caution in investment governance.

Q: What are the future research directions?

A: Future research directions include:

Conducting a comprehensive study on the application of GCG principles and the principle of caution in investment governance in other insurance companies.
Examining the impact of other factors, such as market conditions and economic trends, on the application of GCG principles and the principle of caution in investment governance.
Developing a regulatory framework that ensures the effective implementation of GCG principles and the principle of caution in investment governance.

Q: What is the significance of this study?

A: This study highlights the importance of applying GCG principles and the principle of caution in investment governance in insurance companies. It also emphasizes the need for insurance companies to prioritize the interests of customers and take a cautious approach when making investment decisions. The study provides recommendations for insurance companies to improve their investment governance and highlights the need for regulatory frameworks to ensure the effective implementation of GCG principles and the principle of caution in investment governance.