Updated Asset Management Framework Introduced for Insurance and Reinsurance Companies: Direct Investments of up to 50% in Private Companies Allowed in Line with a Two-Year Transition Period

Back in 2016, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) issued Regulation No. 71/POJK.05/2016 on the Financial Soundness of Insurance and Reinsurance Companies (collectively referred to as “Companies”), as amended several times, most recently by Regulation of the OJK No. 5 of 2023 (collectively referred to as “Regulation 71/2016”). Regulation 71/2016 previously set out the framework which ensured that Companies were operating in line with the applicable financial soundness requirements and were thus able to meet their obligations to policyholders and insured parties alike. Compliance with this framework was assessed through measurements of eight aspects, including Solvency Levels, Technical Reserves and Permitted Assets.[1]