The Financial Services Authority (locally the Otoritas Jasa
Keuangan, 'OJK') who supervises all financial
Branches of foreign insurers are not permitted. Only an
Indonesian incorporated company can apply for a licence to carry on
business as an insurer.
Yes. Foreign shareholders of any entity carrying on insurance
activities are limited to 80 per cent at establishment.
Any transfer of shares in an insurance company requires approval
All "Key Parties" must pass the OJK's 'fit and
proper' test before being appointed or acquiring shares. Key
Parties means members of the Board of Directors, Board of
Commissioners, Sharia Supervisory Board and Member Representative
Board as well as Controlling Shareholders, Experts and Expatriates.
A Controlling Shareholder is a shareholder that holds 25% or more,
or less than 25% but has the ability to influence management and/or
policy of the insurer.
Risk based capital
RBC Solvency Margin Ratio = net asset value (book value)/net
asset value recalculated with possible adverse risks taken into
account (risk based capital). Specific risk factors are applied to
asset values to reflect potential for asset default, currency
mismatch of assets and liabilities, adverse claim experience and
Each insurance company must form its own protection fund as a
means of "last resort" to protect the interests of
policyholders. The protection fund must constitute at least 20 per
cent of the insurer's capital plus 20 per cent of annual
premiums. The funds representing the protection fund must be
deposited with a bank.
The insurance law gives policyholders preferential rights in a
liquidation procedure ahead of secured and unsecured creditors but
behind preferred creditors (tax liabilities and employee
OJK Regulation No. 1 of 2013 gives a policyholder the right to
report a complaint to the OJK with an indication of a dispute
between an insurance company with a policyholder and/or an alleged
violation of the financial laws and regulations. Further, it also
requires insurance companies to have annual program on customers
and/or public education to promote financial (insurance)
Yes: first requires the consent of the OJK, then announcements
in national newspapers. If customers do not object, consent is
deemed. The transferor must have a procedure for handling
objections. The transferor must retain all rights and obligations
under policies of customers who do not wish to transfer.
An insurer may not outsource "core" functions, which
include: risk underwriting, financial functions and payment of
claims. Additionally, an insurer must retain responsibility and at
least a functional head for underwriting, financial management and
insurance services. An insurer may outsource administrative
functions, e.g., accounting, IT and back office functions.
*as at 1 January 2014
1by 31 December 2010
2by 31 December 2012
3by 31 December 2014
IDR12,160 = USD1 at 2 January 2014
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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