Thursday, October 19, 2017

Indonesia urged to fast-track policyholder protection

Insurance experts have urged the government of Indonesia to fast track the creation of a regulation of the Policy Holder Insurance Corporation (LPPP) to protect insurance policyholders.

The call was made following the replacement of the board of directors and commissioners of AJB Bumiputera 1912, the country’s oldest insurer, in October.

Hotbonar Sinaga, an insurance expert and head of the Risk Management Institute, said that the establishment of an LPPP regulation may provide the establishment of a policy guarantee scheme that will encourage the country’s insurance industry.

Business law expert Frans Hendra Winata shared the same view and said that in times of financial crisis, insurance companies may not be able to pay their debts including those of the policy holders.

According to the Indonesian Life Insurance Association (AAJI) executive director Togar Pasaribu, they are expecting the rule to be issued in October 2017.

Bumiputera, known as an Indonesian specialist in insurance with 6.5 million customers, is currently under close supervision by the Financial Services Authority (OJK) over allegations that the value of its claims is higher than the value of its assets.

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