(Bloomberg) -- The Indonesian government will disband troubled state insurer PT Asuransi Jiwasraya in September after clinching a deal with policyholders, according to a government official.
The country’s oldest insurer reached a deal with 99.7% of policyholders to transfer their policies to insurance holding firm PT Asuransi Jiwa IFG, said Arya Sinulingga, a special staff at State-Owned Enterprises Ministry, by a text message on Friday. “This is the biggest restructuring ever in the history of Indonesia’s insurance industry,” he said.
The transfered policies were valued at 38 trillion rupiah ($2.4 billion), local news outlet Antara reported, citing a Financial Services Authority official.
Jiwasraya was founded as a Dutch-owned entity in 1859 and was nationalized by the Indonesian government in 1960.
A 2016 audit revealed violations of investment guidelines that eventually led to a negative equity of more than 28 trillion rupiah, prompting the government to begin work to rescue the company. Its near collapse hurt more than 7 million clients across the country.
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