Indonesia Releases a New Regulator Rules For Insurance Intermediaries

Indonesia over the years has always been ready to make some changes in the market of insurance to make sure it benefits all citizens to improve their life of everybody.

In order to improve openness and consumer protection in the business, Indonesia recently established new laws for insurance middlemen.

The new regulations call for intermediaries to report any possible conflicts of interest, such as when they get commissions from various insurance providers for the same policy. Additionally, businesses will not be allowed to misrepresent insurance goods in any way, and they must guarantee that customers are completely aware of the conditions surrounding the plans they are buying.

In addition, intermediaries will have to comply with stringent capital and solvency criteria and receive licenses from the Financial Services Authority (OJK). In addition, the OJK will have the authority to suspend or revoke the licenses of intermediaries who break the rules.

The new rules are a part of a larger initiative by the Indonesian government to modernize the insurance industry, which has come under fire for lacking consumer protection and transparency. The new regulations are intended to boost market confidence, which will hopefully result in higher insurance penetration and ultimately more coverage for the general population.

As one of Southeast Asia’s most potential insurance markets, Indonesia has a sizable population and a developing economy. Nevertheless, the country’s insurance penetration is still quite low, at about 2.5% of GDP, compared to the average of 3.5% in Southeast Asia.

The new rules are intended to boost foreign investment in Indonesia’s insurance market, which will lower insurance product costs and improve product availability, making insurance more affordable for a wider variety of consumers.

Indonesia Releases a New Regulator Rules For Insurance Intermediaries

Overall, the new rules for insurance intermediaries are a step in the right direction toward making Indonesia’s insurance market more open and consumer-friendly. With these new regulations in place, consumers may buy insurance coverage with more assurance that they are getting the best bargain possible.

What the New Insurance Intermediaries Rules in Indonesia Mean

New regulations for insurance intermediaries have recently been put in place in Indonesia. These regulations include stronger licensing and monitoring requirements as well as more severe penalties for non-compliance. These modifications are intended to improve consumer protection and foster honest competition in the insurance sector. The following are some of the main rules’ provisions:

To conduct business legally, all insurance intermediaries in Indonesia are required to hold an OJK (Indonesian Financial Services Authority) license. This covers brokers, agents, and other kinds of middlemen.

Licensing requirements for insurance intermediaries include having a good reputation, having the necessary professional abilities, and having the necessary financial means.

The OJK regularly monitors insurance intermediaries, which may involve on-site audits and inspections.

The terms and conditions of the insurance products they are selling, as well as any commissions or other kinds of payment they may receive, must all be disclosed to consumers by insurance intermediaries.

penalties for breaking the new laws, such as fines and license suspensions or revocations.

By implementing stronger criteria for intermediaries and raising fines for non-compliance, the new rules seek to improve consumer protection and promote fair competition in the insurance industry. As a result, consumers can have more trust in the intermediaries and the items they sell.

Firms or persons who operate as middlemen between insurance companies and policyholders are known as insurance intermediates in Indonesia. They aid customers in locating and buying insurance plans that best meet their requirements and financial constraints. They consist of brokers, agents, and other kinds of middlemen.

Agents are authorized to sell and advertise the goods of insurance firms as their representatives. Usually, they receive a commission for each insurance policy they sell.

In order to find their clients the finest insurance policies, brokers, who are independent intermediaries, consult with numerous insurance providers. Usually, they receive payment for their services.

Insurance consultants, insurance adjusters, and insurance surveyors are other categories of intermediaries.

In order to safeguard customers and foster fair competition in the insurance sector, Indonesia recently established new regulations for insurance intermediaries that include stronger licensing and monitoring requirements as well as enhanced penalties for non-compliance.

Indonesia Releases a New Regulator Rules For Insurance Intermediaries

It’s important to note that these intermediaries are subject to frequent OJK supervision to make sure they adhere to the new laws and regulations. They are governed by the Indonesian Financial Services Authority (OJK). Regular audits, on-site inspections, and penalties for non-compliance are all part of this.


The law implements provisions for regular report submission and imposes sanctions on insurance brokerage companies, reinsurance brokers, and loss appraisal businesses in an effort to tighten control by the OJK.

Rules for co-broking, standards for insurance businesses to uphold professional behaviour, laws for digital insurance broking, and the necessity to file financial reports every three months are some of the key components of the legislation.

It also contains updates to laws governing administrative penalties, such as fines. The law became operative on December 28, 2022.

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