Stronger Financial Resilience Required: Annual Risk Assessments and Tiered Capital Framework Introduced for Insurance and Reinsurance Sectors

The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is currently completing work on the Draft Regulation (“Draft Regulation”) on Solvency Calculations for Insurance Companies and Reinsurance Companies (collectively referred to as “Companies”). If this new framework ultimately comes into force, then it will revoke Articles 3, 4, 32 and 33 of Regulation of the OJK No. 26 of 2025 on the Management of Assets and Liabilities by Insurance Companies and Reinsurance Companies (“Regulation 26/2025”).[1]