Law Mandates OJK to Formulate, Amend 43 Rules
20 January 2015 11:04 WIB
TEMPO.CO, Jakarta – Law no.40/2014 on Insurance mandates the Financial Services Authority to formulate 43 implementing regulations. The rules must be set by no more than two years and six months after the law is put into effect.
Firdaus Djaelani, OJK chief executive for non-bank financial industry supervision, said the regulator is targeting to have all 43 rules ready this year.
Some of the new substances in Law no.40/2014 include the rule that an insurance company may only be owned by Indonesians and/or legal entities. If the firm is a joint venture between Indonesians and foreigners, the foreign party must be a holding company with at least one subsidiary engaged in the insurance industry.
Another new rule says that that individuals or entities can only become the majority shareholder in one company of the same insurance category. "Having control in two companies of the same insurance category is forbidden," said Yusman, OJK chief for non-bank financial institution Yusman.
Firdaus said the maximum amount of foreign ownership will be consulted with the House of Representatives (DPR). According to Government Regulation (PP) no.39/2008, foreign ownership in an insurance company could reach up to 80 percent, while the World Trade Organization limits foreign ownership at 49 percent.
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