Monday, July 15, 2024 | 20:30 WIB

Chapter Three

IO – This is not just a “job vacancy”. The Financial Services Authority (OJK) is in need of your service: So sign up! This week OJK is opening its Chapter Three new registration. Be the future new Chairman and their new agents, especially if you have a professional insurance background and are bribe-proof. OJK requires people like you to prevent a 9 Richter-scale earthquake such Astra the one triggered by Jiwasraya and Asabri.

OJK’s performance in supervising banks and the capital market has been satisfactory. Our banks did not collapse during the pandemic crisis. Credit could even see a 4 percent growth during the challenging year of 2021. So is the capital market, excellently surviving. The banking sector collapsed in the first wave of the “economic pandemic” hit in 1998 but has been thriving on its own, healthy ever since.

The second wave of the economic pandemic in 2008 left more banks in a healthier state; they no longer needed to be in ICU. Facing a third financial pandemic, our banks were moderately healthy, merely infected but asymptomatic.

Therefore, the focus for OJK Chapter Three should have been: insurance. It is hard to exclude OJK’s responsibility for what happened in the Jiwasraya case.

How odd: Jiwasraya offered a fantastic unit-linked insurance plan (ULIP), assuring policyholders a 12 percent interest rate, leaving out the cost for the insurance agent’s commission and partners. Jiwasraya’s honorable name and its status as a state-owned enterprise (BUMN) gained trust from foreign investors: it had the Government as warrantor.

So, how was it possible for OJK to have let such an insurance product be launched? So, this is not just a matter of observing the product, but a more indepth question: why was the product allowed to launch? One of the rules to launch a financial product is to submit it to OJK and have it examine the proposed new product. If necessary, OJK can summon the insurance company to explain the proposed product further. If all is good, then a permit will be issued for the new financial product.

The OJK Chairman—who is usually more political—heads a six member council, although sometimes eight, with two other ex-officio notable members: the Financial Minister and Bank of Indonesia. One of the notable members primarily monitors the insurance sector, while the other watches the banks. Or the capital market. Or other things.

For banking, the only necessary thing is: allow the irreplaceable bank commissioners their close relationship with the OJK chairman. OJK’s obligations are limited to testing whether prospective commissioners meet the requirements. It is not a requirement to ditch or keep bank commissioners. Banks commissioners’ fit and proper test is absolute, not used for deceitful acts.

In OJK Chapter two, the members in charge of insurance were not likely people with vast insurance knowledge, only sufficient, or at least they should have been. At least an insurance background. Should there be any. At least they must have NonBank Financial Industry Committee (IKNB) who are as powerful as the Bank Financial Industry Committee (IKB).

Insurance products are increasingly creative. Money forces people to appear to be or actually be smart. For example, you buy a life insurance policy, which you cannot even benefit from, only your family can, when you die. However, by adding new features to the policy, you can still make use of the interest, while you are alive. You and your family are entitled to be happy.

This very ULIP product is the one to manage by OJK Chapter Three. The weakness in the ULIP product lies in this: your premium can be invested in equity mutual funds, debt mutual funds, or a combination of both. Whichever provides the highest interest, the exact place where capital market predators hunt. The capital market is a zoo, a place for predators and prey who live side by side, in the same cage. But who is going to eat whom is the question. Jiwasraya was in fact a fat, scrumptious prey offering itself to any wandering predator.

OJK Chapter Three must build a different cage for the capital market predators. There can never be any negotiations between the predators and the prey. An open quotation might help. Sign up if you are interested.

I am not aware whether you should have money to enlist; the registration is undoubtedly free. The following steps are unclear, especially when you plan to be in the “big seven” final round. There is a shifter that will sort you out of the big seven, the House of Representatives (DPR). Then you shall be the OJK Chairman. The six left will be the notable members.

Many people wish for a better OJK Chapter Three; Kartika Wirjoatmodjo or Tiko is strongly expected to enroll. People whispered his name to me, although I found it impossible. He is the head of the OJK Chairman’s selection team. You had better do it. Trust Tiko—the former Mandiri Bank President Director who is now the Deputy Minister of State-Owned Enterprises—who will honestly and earnestly select the best candidate.

Once you pass Tiko, you will be on your own to face DPR. I shall salute you: have no fear.