News Regulations10 Jun 2024

Indonesia:Regulator issues new rules to facilitate approval of insurance products

| 10 Jun 2024

The issuance of a new regulation (POJK Number 8 of 2024) concerning "Insurance Products and Marketing Channels for Insurance Products", will facilitate the licensing of insurance products, according to Financial Services Authority (OJK).

Mr Aman Santosa, the head of the OJK Literacy, Financial Inclusion and Communication Department, in a statement last week, said, “Through POJK 8 of 2024, OJK hopes that the simplification of the insurance product approval process, the use of electronic or digital insurance policies and more careful management of premium/contribution calculations can be implemented well."

POJK 8 of 2024 includes the following provisions:

  • Simplifying insurance product approval and reporting mechanisms

  • Strengthening the main regulations regarding the implementation of unit-linked products

  • Strengthening regulations regarding the administration of digital insurance products

  • Strengthening the governance of insurance product management, especially in calculating premiums/contributions, is carried out through:

  • Structured and clear planning for the development and marketing of insurance products before they are marketed

  • Preparation of studies or testing of insurance products

  • Strengthening the duties, roles and responsibilities of the insurance product development committee, company actuaries and all related management personnel.

The Indonesian Life Insurance Association (AAJI) says that the new regulation, which was released in April 2024, represents an effort by the OJK to enable the insurance industry to grow sustainably. AAJI executive director, Mr Togar Pasaribu, says that in response to this regulation, insurance companies will move more quickly on product innovation.

POJK 8 of 2024 provides a transition period of six months from the date this POJK was promulgated and will be effective from 29 October 2024. OJK hopes that insurance companies will have sufficient time to make preparations so that the new regulation can be implemented effectively and efficiently for the development of the insurance industry.

 

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