TPI could be charged of breaching anti-monopoly law
Thursday, February 1 2001 - 04:30 AM WIB
PT Asuransi Tugu Mandiri (TPI) has been urged to share its captive oil and gas insurance market with other local insurance companies to help create fairer insurance pricing competition for oil and gas projects..
Legislator Faisal Basir from the House of Representatives' Commission IX on finance said that if TPI continued to control the oil and gas insurance market, it could be charged of breaching the anti-monopoly law.
According to Faisal, in a recent hearing with state-owned insurance companies, the commission urged the government to dismantle TPI's control over oil and gas insurance business as such monopoly-like business could inhibit the development of a fair and healthy local insurance industry in general.
He noted that by controlling the oil and gas insurance business, TPI dominated about 60 percent of the country's general insurance business, while the other 40 percent was shared by around 100 local general insurance companies.
When the government agreed to dismantle TPI's control over oil and gas insurance business, Faisal said, it would encourage state insurance companies, such as Jasindo, to participate in the oil and gas insurance business.
Jasindo president Amiruddin Riayat said that his company had capability and capacity to take care of oil and gas insurance business. He noted that even before the creation of TPI, Jasindo had given insurance coverage for oil and gas projects.
Amiruddin said that TPI actually retained only a small portion of oil and gas insurance coverage, this company then gave another small portion of insurance coverage it controlled to 43 local insurance companies grouped in the Consortium of Indonesian Insurance Industries (KPIAI), while the largest portion of insurance coverage for oil and gas projects was re-insured to foreign re-insurance companies.
He noted that local insurance and re-insurance companies actually had the capability and capacity to cover more of oil and gas insurance business if only TPI opened the market.
The creation of KPIAI did not help much in improving local coverage for oil and gas insurance business because it was still TPI that negotiated insurance terms and conditions with state oil and gas firm Pertamina, while the 43 insurance companies in KPIAI were just silent, waiting for distribution of insurance coverage from TPI.
An insurance executive said that B. Munir Samsoedin, currently president of Asuransi Tugu, used to propose -- when he was not yet president of Asuransi Tugu -- that Asuransi Tugu should have implemented co-insurance principle through a consortium of insurance companies in giving insurance coverage for Pertamina's projects.
Munir, when he was not yet TPI president, even criticized the formation of KPIAI because he argued that it was TPI that dictated KPIAI and allocated insurance coverage portion to its members. Munir, according to the executive, branded that the KPIAI system was established by TPI to create an image that TPI did not anymore monopolize the oil and gas insurance business.
But later, when Munir became Asuransi Tugu president, he never implemented what he proposed about the co-insurance principle and even maintained the KPIAI system, the executive said. (*)