It is a truly global marketplace for insurance brands and 2022 will see thousands of partnerships annouced. Good news indeed. But part of the process is compliance; ESG, sustainability, checking directors/officers with significant control, plus due diligence on financial regulations being met and accounting practices. How deep can corruption run within an insurer? Well, the answer is that figures can be massaged to the tune of $1.5 billion – that’s a serious amount of money.
Reuters reports that an Indonesian court has sentenced two former senior managers from state insurer Asabri, to 20 years in jail for corruption, after blaming them for causing 22.7 trillion rupiah ($1.58 billion) of losses to the state. The case highlights how corruption remains a problem and how difficult it can be for partner insurers, MGAs or brokers, to carry out diligence and checks on overseas companies.
This isn’t just a developing nation problem either, as the recent money laundering case featuring NatWest in the UK and the fraudulent claims on blood testing tech made by Elizabeth Holmes at Theranos in the USA demonstrate only too well. Greed is endemic, and like a pandemic the virus of corporate corruption shifts and adapts to local circumstances.
A panel of judges on Tuesday also ordered Adam Rachmat Damiri and Sonny Widjaja, who were chief executives at Asabri between 2012 and 2020, to repay the state a total of 82.47 billion rupiah and pay fines, the state news agency reported.
Asabri is an insurance company that serves members of the military and police officers, as well as civil servants in the defence ministry. The Asabri case is one of the most high profile in a crackdown on investment frauds in insurance firms, following defaults by another Indonesian state insurer Jiwasraya.
One key player in the Asabri case is Heru Hidayat, who was also found guilt late in 2021 of corruption offences involving Jiwasraya, with a government spokesperson calling for the death penalty. There’s more background on this case on the Jakarta Globe website by the way.