The application of good corporate governance.

Good Corporate Governance Report of PT Asuransi Jiwa Manulife Indonesia

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Basic Principles of Good Corporate Governance Implementation at the Company

Concurrently with the role of the Financial Services Authority (FSA) in ensuring the implementation of the Good Corporate Governance (GCG) within the financial services industry through the enactment of the law and regulations to be more comprehensively regulated the GCG, the Company strives to always be forefront in accommodating every changes by held on to the 5 (five) basic principles of GCG consists of : (i) Transparency; (ii) Accountability; (iii) Responsibility; (iv) Independence; and (v) Fairness.

The Company GCG Principles Implementation Self-Assessment Checklist Result of 2014

The GCG principles implementation based on self-assessment checklist result of 2014 was already submitted to the Director of Insurance Oversight and Health BPJS of Financial Services Authority through the Company’s letter No.17/MI/II/2015 dated on February 24, 2015. The Company has performed several improvements and developments on its structures, systems and documents, compared with the self-assessment checklist result of 2013, which are:

  1. Structures:
    There are changes on the structure composition of the Board of Directors and Board of Commissioners of the Company in year 2014 consequently the current composition of the Board of Directors and Board of Commissioners of the Company is as stated under information below.
  2. System:
    Sustainably develop the whistleblowing system to enable the Ethics Hotline Service and socialize it through several initiatives by utilizing a variety of media to all employees and sales forces.
  3. Document:
    • As part of commitment on the implementation of GCG, the Company has conducted the mapping of all required committees under Financial Services Authority Regulation No. 2/POJK.05/2014 on Good Coporate Governance for Insurance Companies (”POJK GCG”) and necessary committee for the Company, which consists of: (i) Governance Committee; (ii) Collaboration Committee; and (iii) Communication Board. Such committees are completed with the charters as guidelines to implement their duties and responsibilities.
      Governance Committee is mandatory based on POJK GCG; and consists of:
      • 2 (two) Committees under Board of Commissioners of the Company; consists of: (a) Audit and Risk Committee; and (b) Governance Committee;
      • 4 (four) Committees under Board of Directors of AJMI; consists of: (a) Risk Management Committee; (b) Anti-Money Laundering Committee; (c) Investment Committee; and (d) Product Steering Committee;
    • Updated several documents / guidance / policies:
      • Disclosed the GCG implementation in Company’s Annual Report for the accounting book ended December 31, 2014;
      • Guidelines on the Know Your Customer Principles in the Prevention of Money Laundering and Terrorist Financing of the Company; and
      • Disclose regularly Business Ethics and Code of Conduct.

Governance Structure

General Meeting of Shareholders (GMoS)
GMoS is the supreme organization of the Company that holds all authorities not delegated to the Board of Commissioners or Board of Directors of the Company in accordance to the Articles of Association and prevailing law and regulations.

During 2014, the Company had conducted 1 (one) Annual GMoS, on June 16, 2014 as set out in the Minutes of the Annual General Meeting of the Shareholders of PT Asuransi Jiwa Manulife Indonesia No. LC/i/AGMS/6/2014 and 1 (one) circular meeting resolutions. 

Board of Commissioners
The Board of Commissioners has the collective responsibility to supervise and advise the Board of Directors by giving precedence of the following principles:

  1. Policies are based on good faith, prudence and a sense of responsibility and are in the interests of the Company and in accordance with the aims and objectives of the Company.
  2. Policies are taken transparently to the Board of Directors and the stakeholders.
  3. Policies are based on objectivity and fair and consistent treatment regarding data and information presented by the Board of Directors to the Board of Commissioners.

Independent Commissioner
The Company is in the process to fulfill the provision related to number and qualification of Independent Commissioner as set forth in POJK GCG.

Membership and Composition
As of July 22, 2014, the composition of the Company’s Board of Commissioners is as follows:

NamePositionReference
Philip Hampden Smith (PHS)President CommissionerDeed No. 46 dated August 19th, 2014 made before Notary Aryanti Artisari, SH., M.Kn.
Ke Wing Siu (KS)Commissioner
Laksamana Sukardi (LS)Commissioner
Retno Anggraini Dharmayani Muljosantoso (RM)Commissioner
Jonathan Michiel Anthony Hekster (JT)Commissioner
Dr. Suyoto (ST)Independent Commissioner

Board of Commissioners Meeting
During 2014, the Company’s Board of Commissioners convened 2 (two) meetings and produced 4 (four) circular meeting resolutions, with the following list of attendances:

No.Tanggal
Date
Jumlah Kehadiran
Total Presence
PHSKSLSRMJTST
1May 20, 2014vvvV v
2November 21, 2014vvvVVV
 %100100100100100100

Board of Commissioners Committees
To assist the effectiveness of the Board of Commissioners oversight functions, the Company has already established a supporting committee for the Board of Commissioners who will work collectively, as follows:

Audit & Risk Committee
Audit & Risk Committee is responsible towards the supervisory function and conduct review of the Company’s financial reporting process including supervising and evaluating the independency of independent auditor which shall include the risk management undertaken by the Company and regularly report it to the Board of Commissioners.

Governance Committee
Governance Committee played a role in reviewing and monitoring the implementation of Good Corporate Governance established by the Board of Directors (BOD) comprehensively including its consistency.

Board of Directors
Board of Directors is a company’s organ that is authorized and fully responsible for the entire management activities of the Company to be in line with the vision, mission, business goals, strategies, policies and plans that has been prior determined.

Board of Director’s Membership and Composition

As recorded from July 22, 2014, the composition of the Board of Directors is as follows:

Nama
Name
Jabatan
Position
Referensi
Reference
Christopher Franz Bendl (CB)President DirectorDeed No. 46 dated August 19th, 2014 made before Notary Aryanti Artisari, SH., M.Kn.
Nelly Husnayati (NH)Vice President Director
Premraj Thuraisingam (PT)*Director
Sutikno Widodo Sjarif (SS)Director

*PT effectively resigned as of July 14, 2014.

Board of Directors Meeting

During 2014, the Company’s Board of Directors convened 8 (eight) meetings and produced 11 (eleven) circular resolutions, with the following details:

No.DatedTotal Presence
CBNH  PTSS
1January 13, 2014vv-V
2February 24, 2014vv-V
3March 3, 2014v--V
4April 7, 2014vv-V
5June 3, 2014vv-V
6August 25, 2014vv V
7September 8, 2014vv V
8December 15, 2014vv V
 %100880100

Supporting Committees under the Board of Directors
To assist the effectiveness of its responsibilities, the Company’s Board of Directors has established the following committees:

Investment Committee
Investment Committee is responsible to review and oversee the investment policies, procedures and strategy for all investment management in accordance with the prevailing law and regulations.

Risk Management Oversight Committee
The Risk Management Oversight Committee is responsible for the implementation of the risk management function, which covers the oversight and discussion of the risk management issues, process and procedures.

Anti-Money Laundering Committee (AML)
AML Committee is responsible to ensure the Company’s fulfill its obligation relating to the implementation of Know Your Customer Principles (KYCP).
 
Product Steering Committee
The Product Steering Committee is responsible to develop and execute product campaigns aimed to generate sales leads and aimed to improve customer behavior experience.

Syariah Supervisory Board (SSB)

The Company owns sharia unit has already met with the requirement and qualification related to sharia expert.

Roles and Responsibilities
SSB is responsible for the following duties and roles:

  1. Performing the oversight and advisory and suggesting duties to the Board of Directors to ensure that the Company’s activities are in accordance with sharia principles;
  2. Attempting to guard a balanced interest to all relevant parties, particularly the Customer’s interests;
  3. Convening SSB meetings at least six times a year.

Membership and Composition of SSB

The Company’s SSB consists of three members, of which such appointment has been approved by the National Sharia Board of Indonesian Moslem Board through the Decision Letter No. U-024/DSN-MUI/2009 dated January 22, 2009. The composition is as follows:

Nama
Name
Jabatan
Position
Referensi Terakhir
Latest Reference
Dr. H. Kamaen A. Perwataatmadja, MPAChairmanDeed No. 46 dated August 19th, 2014 made before Notary Aryanti Artisari, SH., M.Kn.
Dr. H. Mohamad Hidayat, MBA, MHMember
Dr. H. Endy M. Astiwara, MA, FIISMember

Corporate Secretary
The functions of Corporate Secretary through Legal & Compliance Department and directly accountable to the President Director has effectively supported the implementation of GCG in the Company.

Implementation of Internal Control System
The management of the Company collectively has responsibility and accountability for setting the organization’s objectives, defining strategies to achieve those objectives, and establishing governance structures and processes to best manage the risks in accomplishing these objectives through the implementation of an effective and continuous Internal Control System. This effective and continuous Internal Control System by management and Internal Audit unit of the Company is through the implementation of a “three lines of defense” model.

In general, the “three lines of defense” model distinguishes amongst three groups involved in effective risk management; there are: i) Functions that own and manage risks, ii) Functions that oversee risks, iii) Functions that provide independent assurance. The Company’s “three lines of defense” model is as follows:

  1. First line of defense – Business Units
    Businesses are accountable for the risks within their unit including the day-to-day management of the risks and related controls. They are responsible for ensuring their business strategies align with the Company’s risk-taking philosophy, risk appetite and culture, for thoroughly evaluating and managing risk exposures consistent with our enterprise risk policies and standards of practice, and for delivering returns commensurate with the level of risk assumed. They are supported by global risk managers who are responsible for the design and execution of risk mitigation practices that are consistent with the Company’s policies and specific risk management strategies.
  2. Second line of defense – Risk Management, Actuarial, Finance, Compliance (“the group”)
    The group provides independent oversight of risk-taking and risk mitigation activities. Because Manulife is a global company, the group has access to all corporate risk policies and other corporate functional areas such as corporate risk management, corporate actuarial, corporate finance, global compliance, and divisional risk officers to support the group’s independent oversight.
  3. Third line of defense – Internal Audit
    Internal Audit provides independent analysis of whether controls are effective and appropriate relative to the risk inherent in the business, and whether risk mitigation programs and risk oversight functions are effective in managing risks. Internal Audit reports directly to the Audit and Risk Committee.

Litigations Cases

During the year 2014, the Company, the members of the Board of Commissioners, Board of Directors, SSB, and all employees of the Company were not involved in any lawsuits.

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