Jumat, Januari 5, 2024

OJK Introduces Fit-and-Proper Testing Mechanism for Primary Parties of Insurance Companies, Guarantee Institutions and Pension Funds

Following the mandate set under Regulation of the Financial Services Authority (Otoritas Jasa Keuangan – "OJK") No. 27/POJK.03/2016 ("Regulation 27/2016"), the OJK has now decided to introduce an applicable mechanism for the fit-and-proper testing of the primary parties of insurance companies, guarantee institutions and pension funds (Perusahaan Perasuransian, Lembaga Penjamin, dan Dana Pensiun - "PPDP") through the issuance of Circular No. 23/SEOJK.05/2023 ("Circular 23/2023"), which has been in force since 12 December 2023.
At its core, Circular 23/2023 states that the primary parties of PPDP that are subject to mandatory fit-and-proper testing include: 1) Controlling shareholders (Pemegang Saham Pengendali – "PSP") (i.e. individuals, legal entities and/or business groups); 2) Controllers of insurance companies ("Insurance Controllers"); 3) Primary parties other than PSP or Insurance Controllers (i.e. members of boards of directors ["BoD"], boards of commissioners ["BoC"] and sharia supervisory boards (Dewan Pengawas Syariah – "DPS"), as well as internal auditors and company actuaries).
In terms of the various aspects that will now be assessed during the above-mentioned fit-and-proper testing, Circular 23/2023 has determined that said aspects include: 1) For prospective PSP and Insurance Controllers: the fulfillment of integrity and financial feasibility requirements; and 2) For prospective members of BoD, BoC and DPS, as well as internal auditors and company actuaries: the fulfillment of integrity, financial reputation and competence requirements.
The implementation of the above-described fit-and-proper testing comprises several phases that include: 1) Administrative assessments; 2) Presentation sessions given by fit-and-proper test participants; 3) Clarification sessions given by fit-and-proper test participants. Ultimately, it is important to note that any failure to comply with the above-described mandatory fit-and-proper testing regime may result in the imposition of administrative sanctions that take the forms of written reprimands or reductions in institutions’ soundness levels.

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Following the mandate set under Regulation of the Financial Services Authority (Otoritas Jasa Keuangan – "OJK") No. 27/POJK.03/2016 ("Regulation 27/2016"), the OJK has now decided to introduce an applicable mechanism for the fit-and-proper testing of the primary parties of insurance companies, guarantee institutions and pension funds (Perusahaan Perasuransian, Lembaga Penjamin, dan Dana Pensiun - "PPDP") through the issuance of Circular No. 23/SEOJK.05/2023 ("Circular 23/2023"), which has been in force since 12 December 2023.
At its core, Circular 23/2023 states that the primary parties of PPDP that are subject to mandatory fit-and-proper testing include: 1) Controlling shareholders (Pemegang Saham Pengendali – "PSP") (i.e. individuals, legal entities and/or business groups); 2) Controllers of insurance companies ("Insurance Controllers"); 3) Primary parties other than PSP or Insurance Controllers (i.e. members of boards of directors ["BoD"], boards of commissioners ["BoC"] and sharia supervisory boards (Dewan Pengawas Syariah – "DPS"), as well as internal auditors and company actuaries).
In terms of the various aspects that will now be assessed during the above-mentioned fit-and-proper testing, Circular 23/2023 has determined that said aspects include: 1) For prospective PSP and Insurance Controllers: the fulfillment of integrity and financial feasibility requirements; and 2) For prospective members of BoD, BoC and DPS, as well as internal auditors and company actuaries: the fulfillment of integrity, financial reputation and competence requirements.
The implementation of the above-described fit-and-proper testing comprises several phases that include: 1) Administrative assessments; 2) Presentation sessions given by fit-and-proper test participants; 3) Clarification sessions given by fit-and-proper test participants. Ultimately, it is important to note that any failure to comply with the above-described mandatory fit-and-proper testing regime may result in the imposition of administrative sanctions that take the forms of written reprimands or reductions in institutions’ soundness levels.

......