Vehicle Insurance 2010 - Pure Premiums, Administration Fees, and Other Fees

The Head of the Capital Market and Financial Institutions Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan / Bapepam-LK) has issued Regulation No. PER-07/BL/2009 to set out pure premium reference elements, administration fees, and other fees. The regulation is mandated under Article 3(3) of Minister of Finance Regulation No. 74/PMK.010/2007, which in essence requires the issue of vehicle insurance to be revisited each year. The previous regulation in this area No. PER-06/BL/2008 remains in force until 28 February 2010.

The regulation sets out pure premium reference elements in Attachment I. There are 8 categories listed in the attachment. The categories are dependent on the cost of the vehicle for total loss and comprehensive cover. There are additional provisions addressed in attachment I. These include, among others: differences in premium cost for vehicles up to 3-years-old and vehicles older than 3-years-old; additional premium costs for Strike, Riot, Civil Commotion (SRCC), Flood, Earthquake, and Third Party Liability (TPL); and Deductibles.

Attachment II sets out provisions and formulas relating to risk and credibility factors that may be included in calculating a pure premium.

The regulation was issued on 31 December 2009 and comes into force on 1 March 2010.