The premise of this Minister of Finance Regulation is to provide better protection for stakeholders in the credit insurance and suretyship industry while simultaneously perfecting the regulatory framework to reflect current developments and practices in the insurance industry.
Any general insurer that offers a credit insurance or suretyship product must fulfill the following conditions, among others:
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A solvability level in accordance with a sound insurance or reinsurance business;
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Liquidity ratio of 150%;
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Expert staff accredited by the Indonesian Insurance Expert Management Association (AAMAI);
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Have an underwriting manual for each insurance product issued;
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An information system that allows for checks on the accuracy of issued credit insurance and suretyship; and
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Continuing education and training programs in insurance product management.
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The minimum capital required for a general insurance company operating in the credit insurance or suretyship sector is IDR 250 billion.
All products issued as credit insurance or suretyship must be reported to the Minister. This includes, among others, the following:
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Specimens of insurance policies;
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Underwriting projections for three years;
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Underwriting manual approved by the Directors;
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Evidence of the readiness of the information system; and
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An education and training plan.
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If an insurer fails to fulfill the requirements as stated above or falls out of compliance with the provisions, then the insurer must not market or cease to market credit insurance and suretyship products. If the company returns to compliance within a 3-month period then there is no requirement to report to the Minister regarding products. However, if the return to compliance is longer than 3 months then the insurer must report the marketed products to the Minister even if the products have not changed.
All insurers offering credit insurance or suretyship products have 6 months to come into compliance with the provisions of this Regulation.
The Regulation repeals and replaces Minister of Finance Decision No.422/KMK.06/2003.
The Regulation came into force on 3 September 2008.
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