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Ada Pertanyaan? Hubungi Kami Robert Sidauruk, Fathan Qorib
The Indonesian General Insurance Association (AAUI) is predicting that 2015 will not be an easy year for insurance and reinsurance companies. The significant changes to the regulatory framework issued in 2014, as well as several upcoming new regulations will keep the insurance industry in the central spotlight.Julian Noor, AAUI’s Executive Director, sees several upcoming challenges for insurance companies as a result of recently issued and upcoming regulations. As the industry regulator, the Financial Services Authority (OJK) is expected to perform its role in reducing the impact on insurance companies.
The first challenge according to AAUI is the implementation of Government Regulation No. 81 of 2008 on Third Amendment to Government Regulation No. 73 of 1992 on Insurance Business. Insurance companies must satisfy the minimum capital requirement of IDR 100 billion, and for reinsurance companies IDR 200 billion of minimum capital.
The OJK has the responsibility of following up with the implementation of Government Regulation No. 81 of 2008. Mr. Noor has said that the OJK must provide clear information on companies that have or have not fulfilled the new minimum capital requirements.
“The government will receive the audit results by the end of April this year at the latest,” said Mr. Noor.
The next challenge is the implementation of risk based supervision by the OJK. In essence, this type of supervision requires insurance companies to perform self-assessment on their internal and external risk profiles. Based on this assessment, an insurance company will be categorized under four soundness levels, highly safe, safe, sufficiently safe, and not safe.
“Consequently, the OJK will only focus on supervising companies that are categorized as sufficiently safe and not safe, while companies listed as highly safe and safe will not be prioritized,” added Mr. Noor.
The plan for an integrated oversight mechanism over financial conglomerates is another issue for the insurance industry according to AAUI. Through this mechanism, the OJK will take necessary supervisory measures to avoid a domino effect in the financial services industry as the result highly-dependency on a specific business or companies. The OJK will determine the main entities that are part of a financial conglomeration and which are not only involved in banking but also insurance companies.
Finally, Mr. Noor also highlighted 17 new regulations that are to be issued by the OJK under Law No. 40 of 2014 on Insurance. Mr. Noor indicated that the OJK will issue nine regulations in 2015. These regulations will cover substantial matters which will also pose challenges for insurance companies.
“The regulations will cover substantial matters for insurance business, such as licensing, financial soundness, operational issues, reinsurance, and liquidation and statutory management,” concluded Mr. Noor.
(hot/kc)
Robert Sidauruk, Fathan Qorib
The Indonesian General Insurance Association (AAUI) is predicting that 2015 will not be an easy year for insurance and reinsurance companies. The significant changes to the regulatory framework issued in 2014, as well as several upcoming new regulations will keep the insurance industry in the central spotlight.Julian Noor, AAUI’s Executive Director, sees several upcoming challenges for insurance companies as a result of recently issued and upcoming regulations. As the industry regulator, the Financial Services Authority (OJK) is expected to perform its role in reducing the impact on insurance companies.
The first challenge according to AAUI is the implementation of Government Regulation No. 81 of 2008 on Third Amendment to Government Regulation No. 73 of 1992 on Insurance Business. Insurance companies must satisfy the minimum capital requirement of IDR 100 billion, and for reinsurance companies IDR 200 billion of minimum capital.
The OJK has the responsibility of following up with the implementation of Government Regulation No. 81 of 2008. Mr. Noor has said that the OJK must provide clear information on companies that have or have not fulfilled the new minimum capital requirements.
“The government will receive the audit results by the end of April this year at the latest,” said Mr. Noor.
The next challenge is the implementation of risk based supervision by the OJK. In essence, this type of supervision requires insurance companies to perform self-assessment on their internal and external risk profiles. Based on this assessment, an insurance company will be categorized under four soundness levels, highly safe, safe, sufficiently safe, and not safe.
“Consequently, the OJK will only focus on supervising companies that are categorized as sufficiently safe and not safe, while companies listed as highly safe and safe will not be prioritized,” added Mr. Noor.
The plan for an integrated oversight mechanism over financial conglomerates is another issue for the insurance industry according to AAUI. Through this mechanism, the OJK will take necessary supervisory measures to avoid a domino effect in the financial services industry as the result highly-dependency on a specific business or companies. The OJK will determine the main entities that are part of a financial conglomeration and which are not only involved in banking but also insurance companies.
Finally, Mr. Noor also highlighted 17 new regulations that are to be issued by the OJK under Law No. 40 of 2014 on Insurance. Mr. Noor indicated that the OJK will issue nine regulations in 2015. These regulations will cover substantial matters which will also pose challenges for insurance companies.
“The regulations will cover substantial matters for insurance business, such as licensing, financial soundness, operational issues, reinsurance, and liquidation and statutory management,” concluded Mr. Noor.
(hot/kc)