Ada Pertanyaan? Hubungi Kami 
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Ada Pertanyaan? Hubungi Kami Fathan Qorib, Christina Desy
As part of updating the regulatory framework covering the insurance industry, the House of Representatives has initiated a Draft Bill on Insurance (“Draft Bill”). The House is planning to pass the Draft Bill at its upcoming Plenary Meeting.
Amongst the many topics covered by the Draft Bill, limitations on foreign ownership has become one of the most prominent issues. Currently, foreign ownership in the domestic insurance sector is regulated under Government Regulation No. 63 of 1999, which allows foreign ownership of up to 80% in an Indonesian insurance company.
For the Draft Bill, the House and the government have agreed that the permitted foreign ownership level will be decreased. In addition, limitations will be both qualitative and quantitative. Unfortunately, the Draft Bill does not specify a new figure for the percentage of permitted foreign ownership.
Fauzi Ahmad, Secretary of the Work Committee for the Draft Bill, has said that actual percentages will be set out in a government regulation. In this regard, the House is suggesting that foreign ownership to be reduced to 40%, a significant decrease compared to the current framework.
Commenting on the Draft Bill, Firdaus Djaelani, Head Executive of Non-Bank Financial Industries at the Financial Service Authority (OJK), said he welcomes the new framework for the insurance sector. In his view, it is time for Indonesia to rely more on domestic funding to finance its insurance industry.
Furthermore, Mr. Djaelani expects the government to enforce the approach that foreign parties may only own an insurance company’s shares through the capital market. He believes that such a move will encourage Indonesian insurance companies to go public.
Mr. Djaelani could not, however, give a precise figure for maximum foreign ownership in an Indonesian insurance company. To best determine this, he recommends a review be conducted by related stakeholders.
In line with Mr. Djaelani’s suggestion, Chatib Basri, Minister of Finance, plans to organize a review immediately although he disagrees on limiting the review to setting percentages for permitted foreign shareholding. Of most importance is that the review be carried out with the intention of designing a well-developed insurance industry with sufficient capital to expand and continuously grow.
(hot/kc)
Fathan Qorib, Christina Desy
As part of updating the regulatory framework covering the insurance industry, the House of Representatives has initiated a Draft Bill on Insurance (“Draft Bill”). The House is planning to pass the Draft Bill at its upcoming Plenary Meeting.
Amongst the many topics covered by the Draft Bill, limitations on foreign ownership has become one of the most prominent issues. Currently, foreign ownership in the domestic insurance sector is regulated under Government Regulation No. 63 of 1999, which allows foreign ownership of up to 80% in an Indonesian insurance company.
For the Draft Bill, the House and the government have agreed that the permitted foreign ownership level will be decreased. In addition, limitations will be both qualitative and quantitative. Unfortunately, the Draft Bill does not specify a new figure for the percentage of permitted foreign ownership.
Fauzi Ahmad, Secretary of the Work Committee for the Draft Bill, has said that actual percentages will be set out in a government regulation. In this regard, the House is suggesting that foreign ownership to be reduced to 40%, a significant decrease compared to the current framework.
Commenting on the Draft Bill, Firdaus Djaelani, Head Executive of Non-Bank Financial Industries at the Financial Service Authority (OJK), said he welcomes the new framework for the insurance sector. In his view, it is time for Indonesia to rely more on domestic funding to finance its insurance industry.
Furthermore, Mr. Djaelani expects the government to enforce the approach that foreign parties may only own an insurance company’s shares through the capital market. He believes that such a move will encourage Indonesian insurance companies to go public.
Mr. Djaelani could not, however, give a precise figure for maximum foreign ownership in an Indonesian insurance company. To best determine this, he recommends a review be conducted by related stakeholders.
In line with Mr. Djaelani’s suggestion, Chatib Basri, Minister of Finance, plans to organize a review immediately although he disagrees on limiting the review to setting percentages for permitted foreign shareholding. Of most importance is that the review be carried out with the intention of designing a well-developed insurance industry with sufficient capital to expand and continuously grow.
(hot/kc)