Ada Pertanyaan? Hubungi Kami 
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Ada Pertanyaan? Hubungi Kami Fathan Qorib, Christina Desy
As part of efforts to improve and increase the growth of Indonesian’s insurance industry, the House of Representatives is aware of the urgent need to update the industry’s regulatory framework. To this end, intense deliberation on the Draft Bill on Insurance has been continuing between related stakeholders, including the government, the House, and the Financial Services Authority (OJK).
Many issues have been debated during the discussions including foreign ownership in insurance companies. Ngalim Sawega, OJK’s Deputy Commissioner of Non-Bank Financial Industry I, explained that the government and the House are in general agreement on limiting foreign ownership. The percentage, however, is yet to be decided.
Mr. Ngalim acknowledged Indonesia’s commitment at the World Trade Organization (WTO) which states that Indonesia will allow up to 49% foreign ownership. However, although this figure may act as a starting point, it is still too early to confirm whether or not the commitment will be followed.
“We are still in the discussion phase. Therefore, we haven’t specified any exact number for this matter,” explained Mr. Ngalim in Jakarta last Thursday.
Another important issue is the requirement for insurance companies to take the form of a legal entity. The current Draft Bill only recognizes limited liability companies (perseroan terbatas – “PT”) based on the fact that the limited liability company has a comprehensive framework covering its operations.
“If there is a dispute, it can be easily settled by the mechanisms provided under the Limited Liability Company Law,” stated by Mr. Ngalim.
Regardless, however, there is still a possibility of another form of company, the mutual insurance company. The stakeholders are to decide whether this form of company will be included in the Draft Bill or alternatively provided for under a separate regulation.
Mr. Ngalim also indicated there are concerns about the policy insurance program in which all insurance companies must participate. The purpose of the program is to provide protection for policyholders.
In spirit, this program is similar to the establishment of a Deposit Insurance Corporation (Lembaga Penjamin Simpanan – “LPS”). Consequently, current discussion is focusing on the possibility of incorporating the program under LPS’s authority, similar to the approach used by Singapore, Malaysia, Canada, Japan, and South Korea. This approach is also seen to be more economical.
“Rather than establishing a new institution, it is more efficient to let LPS run the program. Due to Indonesia’s economic circumstances, such inclusion is preferable. If our economy increases, we can separate the two,” added Mr. Ngalim.
(hot/kc)
Fathan Qorib, Christina Desy
As part of efforts to improve and increase the growth of Indonesian’s insurance industry, the House of Representatives is aware of the urgent need to update the industry’s regulatory framework. To this end, intense deliberation on the Draft Bill on Insurance has been continuing between related stakeholders, including the government, the House, and the Financial Services Authority (OJK).
Many issues have been debated during the discussions including foreign ownership in insurance companies. Ngalim Sawega, OJK’s Deputy Commissioner of Non-Bank Financial Industry I, explained that the government and the House are in general agreement on limiting foreign ownership. The percentage, however, is yet to be decided.
Mr. Ngalim acknowledged Indonesia’s commitment at the World Trade Organization (WTO) which states that Indonesia will allow up to 49% foreign ownership. However, although this figure may act as a starting point, it is still too early to confirm whether or not the commitment will be followed.
“We are still in the discussion phase. Therefore, we haven’t specified any exact number for this matter,” explained Mr. Ngalim in Jakarta last Thursday.
Another important issue is the requirement for insurance companies to take the form of a legal entity. The current Draft Bill only recognizes limited liability companies (perseroan terbatas – “PT”) based on the fact that the limited liability company has a comprehensive framework covering its operations.
“If there is a dispute, it can be easily settled by the mechanisms provided under the Limited Liability Company Law,” stated by Mr. Ngalim.
Regardless, however, there is still a possibility of another form of company, the mutual insurance company. The stakeholders are to decide whether this form of company will be included in the Draft Bill or alternatively provided for under a separate regulation.
Mr. Ngalim also indicated there are concerns about the policy insurance program in which all insurance companies must participate. The purpose of the program is to provide protection for policyholders.
In spirit, this program is similar to the establishment of a Deposit Insurance Corporation (Lembaga Penjamin Simpanan – “LPS”). Consequently, current discussion is focusing on the possibility of incorporating the program under LPS’s authority, similar to the approach used by Singapore, Malaysia, Canada, Japan, and South Korea. This approach is also seen to be more economical.
“Rather than establishing a new institution, it is more efficient to let LPS run the program. Due to Indonesia’s economic circumstances, such inclusion is preferable. If our economy increases, we can separate the two,” added Mr. Ngalim.
(hot/kc)