OJK Regulation No. 34 of 2024 on Human Resource Quality Development for Insurance Companies, Guarantee Institutions, Pension Funds, and Special Institutions

Financial Services Authority Regulation Number 34 of 2024 concerning Human Resource Quality Development for Insurance Companies, Guarantee Institutions, Pension Funds, and Special Institutions in the Fields of Insurance, Guarantee, and Pension Funds

Abstract: As an effort to face various external challenges such as increasing business volume, technological disruption, increasingly varied services in accordance with the development of public needs and global market dynamics, the quality of human resources (HR) in the insurance, guarantee, and pension funds sectors becomes one of the keys to facing these challenges. Regulations regarding the development of HR quality for Insurance Companies, Guarantee Institutions, Pension Funds, and special institutions in the fields of insurance, guarantee, and pension funds are required to realize a financial sector that is deep, innovative, efficient, inclusive, trustworthy, strong, and stable, thereby supporting strong, balanced, inclusive, and sustainable national economic growth. The legal basis for this Financial Services Authority Regulation (POJK) is: Law No. 21 of 2011 as amended by Law No. 4 of 2023; and Law No. 4 of 2023.

Insurance Companies, Guarantee Institutions, and Pension Funds (PPDP) are required to: a. conduct continuous HR management and development of the quality of their HR; b. provide and implement annual HR education and training programs for each fiscal year of at least 3.5% (three point five percent) of the total realization of employee, Board of Directors, Board of Commissioners, and Sharia Supervisory Board expenses in the previous year; c. report plans and the realization of HR quality development to the Financial Services Authority; d. have a system and procedures for continuous HR quality development and monitor the realization of HR quality development continuously through the aforementioned system and procedures; e. have HR that meets competencies proven by:

1. Work Competency Certification (SKK); or
2. competency certification other than SKK approved by the Financial Services Authority, in the fields of insurance, guarantee, and pension funds. f. identify and establish critical activities and positions within PPDP.

Members of the Board of Directors, members of the Board of Commissioners, and members of the Sharia Supervisory Board are required to meet sustainability or competency maintenance requirements at least 1 (one) time within a period of 1 (one) year.

Sectoral LSPs (Lembaga Sertifikasi Profesi) for insurance, guarantee, and pension funds that administer SKK are required to maintain the quality of SKK competency tests in the insurance, guarantee, and pension funds sectors.

Provisions regarding HR quality development, SKK or competency certifications other than SKK, and monitoring of HR quality development apply mutatis mutandis to special institutions in the fields of insurance, guarantee, and pension funds, unless otherwise specifically regulated in this Financial Services Authority Regulation.

The obligation to provide and implement HR education and training programs for special institutions in the fields of insurance, guarantee, and pension funds is carried out by referring to the provisions on the amount/nominal of HR education and training fund provision as referred to in this Financial Services Authority Regulation or the amount/nominal of HR education and training fund provision regulated in legislation for each respective special institution in the fields of insurance, guarantee, and pension funds, using the larger amount.

Administrative sanctions for PPDP include: a. written warning; b. reduction in health level; c. administrative fine of up to Rp500,000,000.00 (five hundred million rupiah); d. restriction on business activities, partially or wholly; e. suspension of business activities; and/or f. prohibition on conducting certain programs.

In addition to imposing administrative sanctions, the Financial Services Authority has the authority to reassess the main parties of PPDP.

Administrative sanctions for special institutions in the fields of insurance, guarantee, and pension funds include: a. written warning; and/or b. recommendation to the National Social Security Guarantee Council and/or the President.

Note: This Financial Services Authority Regulation takes effect after 6 (six) months from the date of promulgation. This Financial Services Authority Regulation was promulgated on December 23, 2024, and established on December 20, 2024.

Upon the taking effect of this Financial Services Authority Regulation:

1. Article 80, Article 85, Article 88 paragraph (2) letter a, paragraph (4) letter a, letter b, Article 89 paragraph (2) letter a, paragraph (4) letter a, letter b, Article 90 paragraph (2) letter a, letter b, paragraph (4) letter a, letter b, letter c, Article 91 paragraph (2) letter a, letter b, letter c, letter d, letter e, and Article 92 paragraph (1), paragraph (3) letter a of Financial Services Authority Regulation Number 23 of 2023 concerning Business Licensing and Institutional Organization of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies;
2. Article 28, Article 33, Article 37 letter a, Article 43 letter a, Article 50 paragraph (2) letter a, Article 51 paragraph (2) letter a, Article 54 paragraph (2) letter a, Article 55 paragraph (2) letter a, Article 57 paragraph (2) letter a, and Article 58 paragraph (2) letter a of Financial Services Authority Regulation Number 24 of 2023 concerning Business Licensing and Institutional Organization of Insurance Broker Companies, Reinsurance Broker Companies, and Sharia Loss Assessment Companies;
3. Article 36 paragraph (1), Article 37 paragraph (2) letter a, Article 39, and Article 97 paragraph (2) letter a of Financial Services Authority Regulation Number 1/POJK.05/2017 concerning Business Licensing and Institutional Organization of Guarantee Institutions;
4. Article 154 paragraph (1) letter c, paragraph (2) letter b, paragraph (4), and Article 161 of Financial Services Authority Regulation Number 27 of 2023 concerning the Conduct of Pension Fund Business; and
5. Article 51G paragraph (3) of Financial Services Authority Regulation Number 70/POJK.05/2016 concerning the Conduct of Business of Insurance Broker Companies, Reinsurance Broker Companies, and Loss Assessment Companies as amended by Financial Services Authority Regulation Number 28 of 2022 concerning Amendments to Financial Services Authority Regulation Number 70/POJK.05/2016 concerning the Conduct of Business of Insurance Broker Companies, Reinsurance Broker Companies, and Loss Assessment Companies, are repealed and declared invalid.

Insurance Companies, Guarantee Institutions, and Pension Funds must adjust to the provisions in Article 7 within a maximum period of 6 (six) months from the date this Financial Services Authority Regulation takes effect.

Explanation: 11 pages.