New Spin-off Mechanism for Sharia Units from Insurance and Reinsurance Companies Introduced

As the market share of the sharia industry is now developing significantly, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has issued Regulation No. 11 of 2023 on Sharia Unit Spin-offs for Insurance Companies and Reinsurance Companies (“Regulation 11/2023”).[1] This new Regulation 11/2023 came into force on 11 July 2023[2] and repeals and replaces several articles originally set out under Regulation of the OJK No. 67/POJK.05/2016 (“Regulation 67/2016”),[3] specifically provisions that specifically addressed sharia unit spin-offs (“Spin-offs”).[4]