We were shocked by the management of  Jiwasraya Insurance and ASABRI, both of which are owned by SOEs (state-owned enterprises). Allegedly, the potential for enormous company losses occurred due to poor governance, ineffective implementation of Risk Management, and implementation of compliance that was not carried out seriously. The reputations of the two companies deteriorated, as well as the public's confidence in the insurance industry. This is a very valuable lesson for the Government, financial industry players, and the public. 

The government needs to rebuild public trust in the insurance industry. The role of the Ministry of State-Owned Enterprises, OJK, Indonesia Stock Exchange, Ministry of Finance and BPK, needs to synergize to nourish the two companies and the national insurance industry. It is necessary to build an effective control system to oversee the implementation of non-banking financial services business governance. Likewise, it is necessary to strengthen the role of the Internal Auditor and External Auditor in supervising the company's financial reporting system, in particular, to avoid improper recording or window-dressing.

Looking at the management of Jiwasraya and ASABRI, it is very likely that Operational risk and Financial Risk are not managed seriously. This can be seen from the courage to offer Bank assurance services with fixed income and the value is far above the deposit interest rate as well as turning customer funds into investment in company stocks that are prone to losses and mutual fund investments to less credible investment management. As a result, the investment value is at a loss, while obligations to customers must continue to be carried out. Foreign insurance companies operating in Indonesia sell Bank assurance services or unit links, where the customer's income is not fixed but is in accordance with the results of the investment carried out. The Risk Management function is very important in stock and mutual fund investment activities which at any time provide an early warning about the condition of company shares and mutual fund investment management, national and global economic and business developments.

Question:
Analysis of governance risk and compliance that exist in Jiwasraya and ASABRI companies as in the case above!

Reference is from Robert R. Moeller. (2011). COSO enterprise risk management : establishing effective governance, risk, and compliance (GRC) processes. 02. Wiley. ISBN: 9780470912881.