Reporting Obligations: The Application of Sharia principles by Insurance/Re-Insurance Businesses

The Chairman of the Capital Markets and Financial Institutions Supervisory Agency (“Bapepam-LK”) has issued Regulation No. Per/08/BL/2011 on the Forms and Procedures for Submitting Supervisory Reports Made by the Sharia Supervisory Council of an Insurance Company or Reinsurance Company that Operates All or Some of its Business According to Sharia Principles (“Regulation”).

The Regulation provides guidelines and forms for the preparation of Sharia Supervisory Council reports as required by Article 16 of Minister of Finance Regulation No. 18/PMK.0101/2010 on the Application of Sharia Principles to the Operation of Insurance Businesses and Reinsurance Businesses.

Article 1 defines the Sharia Supervisory Council as the section of the company that supervises the insurance and reinsurance business in accordance with Sharia principles. The Sharia Supervisory Council is required to prepare an annual report on its monitoring results and submit a hardcopy and softcopy of the report to the Insurance Market Supervision Bureau at Bapepam-LK (Articles 2 and 3). The form and structure of the report must be prepared in accordance with the guidelines and forms in Appendix I and II (Article 2(3)).