Assessment of Competence and Propriety for Key Parties of Insurance Companies, Guarantee Institutions, and Pension Funds

To:

The Board of Directors of Insurance Companies;
The Management of Pension Funds; and
The Board of Directors of Guarantee Institutions,
At your offices.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY OF THE REPUBLIC OF INDONESIA NUMBER 23/SEOJK.05/2023

CONCERNING

ASSESSMENT OF COMPETENCE AND PROPRIETY FOR KEY PARTIES OF INSURANCE COMPANIES, GUARANTEE INSTITUTIONS, AND PENSION FUNDS

In relation to the mandate of Article 35 of Financial Services Authority Regulation Number 27/POJK.03/2016 concerning the Assessment of Competence and Propriety for Key Parties of Financial Service Institutions (State Gazette of the Republic of Indonesia Year 2016 Number 147, Additional State Gazette of the Republic of Indonesia Number 5098), it is necessary to regulate the implementation provisions for the assessment of competence and propriety for key parties in Insurance Companies, Guarantee Institutions, and Pension Funds in this Financial Services Authority Circular Letter as follows:

I. GENERAL PROVISIONS

In this Financial Services Authority Circular Letter, the following terms are meant:

Insurance Companies, Guarantee Institutions, and Pension Funds, hereinafter abbreviated as PPDP, are:
a. Insurance Companies are insurance companies, Sharia insurance companies, reinsurance companies, Sharia reinsurance companies, insurance brokerage companies, reinsurance brokerage companies, and insurance loss assessors. b. Guarantee Institutions are guarantee companies, Sharia guarantee companies, re-guarantee companies, and Sharia re-guarantee companies that carry out guarantee activities.
c. Pension Funds are legal entities that manage and carry out programs promising pension benefits, including those that carry out all their business activities based on Sharia principles.
Key Parties are parties that own, manage, supervise, and/or have significant influence on PPDP.
Controlling Shareholders, hereinafter abbreviated as PSP, are legal entities, individuals, and/or business groups that own shares or share equivalents and have the ability to exercise control over Guarantee Institutions.
General Meeting of Shareholders, hereinafter abbreviated as RUPS, is the general meeting of shareholders as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PPDP that are formed as limited liability company legal entities or equivalent to RUPS for PPDP that are formed as cooperative legal entities, joint ventures, pension funds, and state-owned enterprises.
Board of Directors is the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PPDP that are formed as limited liability company legal entities or equivalent to the Board of Directors for PPDP that are formed as cooperative legal entities, joint ventures, pension funds, and state-owned enterprises.
Board of Commissioners is the Board of Commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for PPDP that are formed as limited liability company legal entities or equivalent to the Board of Commissioners for PPDP that are formed as cooperative legal entities, joint ventures, pension funds, and state-owned enterprises.
Sharia Supervisory Board is a party that has the task and function of supervising the implementation of PPDP activities to ensure compliance with Sharia principles.
Controlling Party of an Insurance Company is a party that directly or indirectly has the ability to determine the Board of Directors and Board of Commissioners, and/or influence the actions of the Board of Directors and Board of Commissioners in Insurance Companies.
Control is an action aimed at influencing the management and/or policies of a company, including in Insurance Companies and Guarantee Institutions, in any manner, whether directly or indirectly.
Internal Auditor is an official in an Insurance Company responsible for evaluating and improving the effectiveness of risk management, controls, and corporate governance processes, working independently and in accordance with applicable practice standards.
Company Actuary is an official in insurance companies, Sharia insurance companies, reinsurance companies, and Sharia reinsurance companies who is appointed and responsible for managing the financial impact of risks faced by the company, working independently and in accordance with applicable practice standards.

II. SCOPE OF PARTIES SUBJECT TO ASSESSMENT OF COMPETENCE AND PROPRIETY

The assessment of competence and propriety is conducted against candidates for Key Parties.
Key Parties required to undergo the assessment of competence and propriety include:
a. PSP, including:
1) individuals and/or legal entities that will purchase, receive gifts, receive inheritance, or other forms of transfer of rights over shares in Guarantee Institutions, resulting in the relevant party becoming a PSP;
2) shareholders of Guarantee Institutions that are not classified as PSP (non-PSP) who purchase, receive gifts, receive inheritance, or other forms of transfer of rights over shares in Guarantee Institutions, resulting in the relevant party becoming a PSP;
3) non-PSP who increase capital contributions, resulting in the relevant party becoming a PSP;
4) individuals and/or legal entities that will become PSP in a "Guarantee Institution resulting from a merger" (merger);
5) individuals and/or legal entities that will become PSP in a "Guarantee Institution resulting from a consolidation" (consolidation); and/or
6) individuals and/or legal entities that will become PSP in a Guarantee Institution to be established.
b. Controlling Parties of Insurance Companies, including:
1) individuals and/or legal entities that are shareholders of Insurance Companies;
2) individuals and/or legal entities that are not shareholders of Insurance Companies but are designated by the Insurance Company as Controlling Parties, including members of the general meeting of members in insurance companies formed as joint venture legal entities;
3) individuals and/or legal entities that are not shareholders of Insurance Companies but are designated by the Financial Services Authority as Controlling Parties;
4) individuals and/or legal entities that will become Controlling Parties in an "Insurance Company resulting from a merger" (merger);
5) individuals and/or legal entities that will become Controlling Parties in an "Insurance Company resulting from a consolidation" (consolidation); and/or
6) individuals and/or legal entities that will become Controlling Parties in an Insurance Company to be established.
c. Key Parties other than PSP or Controlling Parties of Insurance Companies, consisting of members of the Board of Directors, members of the Board of Commissioners, or members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries, including:
1) individuals who have never served as members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in PPDP, who are nominated to become members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in PPDP;
2) individuals currently serving as members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in PPDP, who are nominated to become members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in other PPDP, whether in the same or different financial service sectors;
3) individuals who have previously served as members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in PPDP, who are nominated to become members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries, in the same PPDP or in other PPDP, examples:
a) individuals who have previously served as members of the Board of Commissioners who are nominated to become independent commissioners in the same PPDP or in other PPDP, provided that they meet the requirements related to independent commissioners; b) individuals who have previously served as Company Actuaries who are nominated to become members of the Board of Directors in the same PPDP or in other PPDP; or c) individuals who have previously served as members of the Board of Directors who are nominated to become lead commissioners in the same PPDP or in other PPDP;
4) members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries who will transfer positions within the same company, examples:
a) members of the Board of Commissioners who will transfer positions to become members of the Board of Directors in the same company; b) members of the Board of Directors who will transfer positions to become members of the Board of Commissioners in the same company; or c) members of the Board of Directors or members of the Board of Commissioners who will transfer positions to higher positions within the same company, examples:
(1) members of the Board of Directors who will be appointed as lead directors, or equivalents, in the same company; and/or (2) members of the Board of Commissioners who will be appointed as lead commissioners, or equivalents, in the same company;
5) members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries originating from PPDP that undergo merger or consolidation, examples:
a) members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in "PPDP resulting from a merger" originating from "PPDP that undergo merger"; b) members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in "PPDP resulting from a merger" originating from "PPDP that receive merger", including extension of tenure; or c) members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries in "PPDP resulting from consolidation" originating from "PPDP that undergo consolidation".
PSP as referred to in number 2 letter a are individuals, legal entities, and/or business groups that:
a. own shares or capital amounting to 25% (twenty-five percent) or more of the issued shares and have voting rights; or b. own shares or capital less than 25% (twenty-five percent) of the issued shares and have voting rights but it can be proven that the relevant party has exercised control over Insurance Companies or Guarantee Institutions, whether directly or indirectly.
The assessment of competence and propriety is not conducted for the extension of tenure of the same PPDP for members of the Board of Directors, members of the Board of Commissioners, or members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries, except:
a. extension of tenure as referred to in Article 34 paragraph (2) of Financial Services Authority Regulation Number 27/POJK.03/2016 concerning the Assessment of Competence and Propriety for Key Parties of Financial Service Institutions; and b. extension of tenure as referred to in number 2 letter c number 5) letter b).
Extension of tenure as referred to in number 4 is any reassignment to the same, equivalent, or lower position, examples:
a. same position includes, for example, marketing director becoming marketing director again in the same company; b. equivalent position includes, for example:
1) finance director becoming risk management director in the same company, including if there is an addition of functions in the new position of the relevant member of the Board of Directors; and
2) finance director becoming deputy lead director; and
c. lower position includes, for example:
1) lead director becoming deputy lead director or director in the same PPDP; or
2) lead commissioner becoming deputy lead commissioner in the same PPDP.

III. REQUIREMENTS IN ASSESSMENT OF COMPETENCE AND PROPRIETY

A. Integrity Requirements

The assessment of integrity requirements is conducted to ensure the level of compliance and good faith of candidate Key Parties in managing, supervising, and/or carrying out business processes so that companies in the PPDP sector are able to meet their obligations to creditors, debtors, policyholders, insured parties, participants, guarantee recipients, and/or other consumers.
Criteria for assessing integrity requirements for candidate Key Parties include:
a. having the legal capacity to perform legal acts; b. having good character and morality, at least demonstrated by a attitude of complying with applicable regulations, including never being sentenced for proven criminal offenses within a certain period before nomination, including:
1) criminal offenses in the financial service sector whose sentence has been fully served within the last 20 (twenty) years before nomination;
2) felony criminal offenses, namely criminal offenses listed in the Criminal Code (KUHP) and/or similar to the KUHP in foreign countries with a prison sentence threat of 1 (one) year or more whose sentence has been fully served within the last 10 (ten) years before nomination; and/or
3) other criminal offenses with a prison sentence threat of 1 (one) year or more, including but not limited to corruption, money laundering, terrorism financing, proliferation of weapons of mass destruction, narcotics/psychotropics, smuggling, customs, excise, human trafficking, illegal arms trafficking, counterfeiting currency, tax offenses, forestry offenses, environmental offenses, and marine and fisheries offenses, whose sentence has been fully served within the last 20 (twenty) years before nomination.
The term "before nomination" as referred to in number 1), number 2), and number 3) is calculated from the date the relevant party has finished serving the criminal sentence until the date of the PPDP's letter of request to the Financial Services Authority;
c. having a commitment to comply with legislation and support the policies of the Financial Services Authority, demonstrated by:
1) never violating prudential principles in the financial service sector; and
2) never violating legislation in the financial service sector;
d. having a commitment to the healthy development of PPDP, demonstrated by:
1) submission of a plan by candidate PSP or candidate Controlling Party of an Insurance Company regarding the development of the business of Insurance Companies or Guarantee Institutions, which must at least contain the direction and strategy for the development of Insurance Companies or Guarantee Institutions, strategy in case Insurance Companies or Guarantee Institutions that will be owned and/or controlled experience financial difficulties, and capital plan for Insurance Companies or Guarantee Institutions for a minimum period of 3 (three) years;
2) never violating commitments previously agreed upon with the financial service institution supervisor, namely acts of failing to fulfill some or all of the commitments contained in meeting minutes, minutes of meetings, or statements of commitment letters of the company, including but not limited to not implementing:
a) recommendations from audit results reports; b) programs for the rehabilitation of PPDP; and c) settlement of PPDP obligations to creditors, debtors, policyholders, insured parties, participants, guarantee recipients, and/or other consumers that have been agreed upon;
3) having a commitment not to commit and/or repeat acts and/or actions that cause the relevant party to be listed in the list of parties prohibited from being Key Parties, for candidates who have previously been listed in the list of parties prohibited from being Key Parties;
4) never committing acts that provide unfair benefits to shareholders, Key Parties, employees, and/or other parties that can harm or reduce the rights of creditors, debtors, policyholders, insured parties, participants, guarantee recipients, and/or other consumers;
5) never committing acts that are not within their authority or beyond their authority; and/or
6) never being declared incapable of exercising their authority; and
e. not being included as a party prohibited from being a candidate Key Party.

B. Assessment of Financial Reputation Requirements

The assessment of financial reputation requirements is conducted to assess financial capability and to assess the involvement of members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, Company Actuaries, and Controlling Parties of Insurance Companies who are not shareholders in the criteria for assessing financial reputation requirements.
Criteria for assessing financial reputation requirements for candidate Key Parties as referred to in number 1 include:
a. not having non-performing loans and/or financing; and b. never being declared bankrupt and/or never having been a shareholder, Controlling Party of an Insurance Company who is not a shareholder, member of the Board of Directors, or member of the Board of Commissioners who was declared guilty of causing a company to be declared bankrupt within the last 5 (five) years before nomination.
The definition of non-performing loans as referred to in number 2 letter a does not include non-performing loans originating from annual fee credit card bills, credit card administrative fees, and/or other bills related to credit cards that do not originate from credit card usage transactions.

C. Financial Feasibility Requirements

The assessment of financial feasibility requirements is conducted to assess the financial capability of candidate PSP or candidate Controlling Parties of Insurance Companies who are shareholders in the financial reputation factor criteria.
Criteria for assessing financial feasibility requirements include:
a. having a financial reputation as referred to in letter B number 2; b. having financial capability that can support the business development of Insurance Companies or Guarantee Institutions, namely:
1) the financial position of individual candidate PSP or individual candidate Controlling Party of an Insurance Company that is able to support the business development of the company, accompanied by a statement letter from the individual candidate PSP or individual candidate Controlling Party of an Insurance Company that the relevant party has financial capability, which may be supported by supporting evidence; and
2) the position of the latest audited annual financial report by a public accountant in accordance with regulations regarding business licensing and institutional structure of PPDP for candidate PSP formed as legal entities or candidate Controlling Parties of Insurance Companies formed as legal entities, including liquidity position, solvency position, investment placement position, return on assets position, and return on equity position; and
c. having a commitment to take necessary measures if Insurance Companies or Guarantee Institutions face financial difficulties.

D. Competence Requirements

The assessment of the competence factor is conducted to assess the knowledge, ability, experience, and expertise possessed by candidates for members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries to ensure they are adequate and relevant to their positions.
Criteria for assessing the competence factor for candidates for members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries include assessment against:
a. knowledge and ability in strategic management performed to ensure that:
1) candidates for members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries have adequate and relevant knowledge for their positions, demonstrated by:
a) knowledge regarding organizational structure, management, job descriptions, and responsibilities; b) potential ability to analyze business processes, lead organizations, and manage human resources to achieve organizational goals; c) basic supervisory knowledge including internal controls, specifically for candidates for members of the Board of Commissioners and members of the Sharia Supervisory Board; d) basic knowledge related to leadership and conflict management, specifically for candidates for members of the Board of Commissioners and members of the Sharia Supervisory Board; and/or e) ability to evaluate company obligations, technical actuarial aspects, or other technical aspects;
2) candidates for members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries have an understanding of legislation, demonstrated by:
a) understanding of legislation in the financial service sector, prioritized over legislation in the industry where the member of the Board of Directors, member of the Board of Commissioners, member of the Sharia Supervisory Board, Internal Auditor, or Company Actuary will serve; and/or b) basic understanding of other relevant legislation, including understanding of legislation in the field of limited liability companies, Financial Services Authority, development and strengthening of the financial service sector, bankruptcy, and money laundering criminal offenses;
3) candidates for members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, or Company Actuaries have the ability to perform strategic management in the context of healthy business development, demonstrated by:
a) for candidates for members of the Board of Directors, namely:
(1) formulating vision and mission; (2) conducting PPDP situation analysis; (3) conducting analysis of internal PPDP condition developments; (4) setting targets to be achieved related to the position held; and (5) designing short-term, medium-term, and long-term strategies to achieve PPDP targets, including the ability to anticipate future developments, such as the ability to prepare annual business plans and medium-term and long-term corporate plans using realistic and measurable assumptions; b) for candidates for members of the Board of Commissioners, members of the Sharia Supervisory Board, and Internal Auditors, namely:
(1) conducting basic PPDP situation analysis; (2) conducting analysis of internal PPDP condition developments, including PPDP financial health conditions, human resources, and technology; and (3) conducting analysis of Board of Directors' policies; c) for candidates for Company Actuaries, namely:
(1) conducting analysis of insurance company, Sharia insurance company, reinsurance company, and Sharia reinsurance company situations; and (2) conducting analysis of internal condition developments of insurance companies, Sharia insurance companies, reinsurance companies, and Sharia reinsurance companies; b. experience in the PPDP sector and/or other fields relevant to their position, demonstrated by:
1) experience in relevant financial service institutions; and/or
2) experience in positions relevant to the position the relevant party will be appointed or employed in; and
c. expertise in the PPDP sector and/or other fields relevant to their position in PPDP.

IV. APPLICATION PROCEDURES AND ADMINISTRATIVE REQUIREMENTS

A. Application Procedures

An application for approval to become a Key Party is submitted by:
a. prospective owners, founders, or members of the Board of Directors of the PPDP in the case of a PPDP business license application; and b. members of the Board of Directors of the PPDP, in the case where the PPDP has obtained a business license.
In the event that members of the Board of Directors of the PPDP as referred to in item 1 letter a or letter b cannot perform their functions or have a conflict of interest with the PPDP, the application is submitted by:
a. other members of the Board of Directors who do not have a conflict of interest with the PPDP; b. members of the Board of Commissioners if all members of the Board of Directors cannot perform their functions or have a conflict of interest with the PPDP; or
c. other parties appointed by the General Meeting of Shareholders if all members of the Board of Directors or members of the Board of Commissioners cannot perform their functions or have a conflict of interest with the PPDP.
An application for approval to become a Key Party as referred to in items 1 and 2 is submitted to the Financial Services Authority using Format 1 as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular.
The submission of the application letter for approval to become a Key Party as referred to in item 3 must be accompanied by administrative requirement documents.
The PPDP fills out the administrative requirement compliance list using Format 2 as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular.
The PPDP must first conduct a self-assessment of prospective members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries before submitting them to the Financial Services Authority using Format 3 as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular.
The self-assessment as referred to in item 6 is conducted by the party having the nomination and remuneration function in each PPDP.
The submission of the application letter for approval to become a Key Party and/or administrative requirement documents as referred to in item 4 is submitted to the Financial Services Authority online.
In the event that the Financial Services Authority's data communication network system is not available or there is a technical disturbance at the time of submission of the application for approval to become a Key Party and/or administrative requirement documents, the application and/or administrative requirement documents are submitted to the Financial Services Authority offline.
The submission of the application for approval to become a Key Party and/or administrative requirement documents offline as referred to in item 9 must be submitted in the form of a color scan of the original documents via electronic data storage media.
In the event of a technical disturbance or force majeure, the Financial Services Authority announces this on its website or via email to the PPDP.
The Company submits 1 (one) prospective Key Party in the application for approval to become a Key Party as referred to in item 3 for 1 (one) position to be filled.

B. Administrative Requirement Documents

Completeness of administrative requirement documents as referred to in letter A item 4 for parties nominated as Individual PSP or Individual Controlling Party of an Insurance Company who are shareholders, namely:
a. a completed list using Format 4 letter A as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, accompanied by:
1. a photocopy of identity documents in the form of an Identity Card (KTP) or a valid passport;
2. a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian citizens or equivalent documents valid for foreign citizens; and
3. a recent color passport-sized photo; and
  b. a statement letter that has been completed, affixed with sufficient stamp duty, and signed by the nominated party using Format 5 letter A as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing a statement of meeting integrity aspects, financial viability aspects, and not undergoing a competence and propriety assessment process at a financial services institution.
Completeness of administrative requirement documents as referred to in letter A item 4 for parties nominated as Individual Controlling Party of an Insurance Company who are not shareholders, namely:
a. a completed list using Format 4 letter B as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, accompanied by:
1. a photocopy of identity documents in the form of an Identity Card (KTP) or a valid passport;
2. a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian citizens or equivalent documents valid for foreign citizens; and
3. a recent color passport-sized photo; and
  b. a statement letter that has been completed, affixed with sufficient stamp duty, and signed by the nominated party using Format 5 letter B as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing a statement of meeting integrity aspects, financial reputation aspects, and not undergoing a competence and propriety assessment process at a financial services institution.
Completeness of administrative requirement documents as referred to in letter A item 4 for parties nominated as Corporate PSP or Corporate Controlling Party of an Insurance Company who are shareholders, namely:
a. a completed list using Format 4 letter C as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing corporate data, accompanied by:
1. a photocopy of the copy of the deed of establishment of the legal entity and the latest amendment to the articles of association that have been approved by, agreed to by, or notified to the competent authority or equivalent documents for foreign legal entities according to regulations in the country of origin; and
2. a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian legal entities or equivalent documents valid for foreign legal entities;
  b. the latest annual financial report audited by a public accountant according to regulations regarding business licensing and institutionalization of PPDP;
  c. a completed biography list of board members and commissioners of the prospective Corporate PSP or prospective Corporate Controlling Party of an Insurance Company using Format 6 as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, accompanied by:
3. personal data:
  a) a photocopy of identity documents in the form of an Identity Card (KTP) or a valid passport; b) a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian citizens or equivalent documents valid for foreign citizens; and c) a recent color passport-sized photo. d. a statement letter from the legal entity represented by the board of directors that has been completed and affixed with sufficient stamp duty using Format 5 letter A as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing a statement of meeting integrity aspects, financial viability aspects, and not undergoing a competence and propriety assessment process at a financial services institution.
Completeness of administrative requirement documents as referred to in letter A item 4 for parties nominated as Corporate Controlling Party of an Insurance Company who are not shareholders, namely:
a. a completed list using Format 4 letter D as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing corporate data, accompanied by:
1. a photocopy of the copy of the deed of establishment of the legal entity, and the latest amendment to the articles of association that have been approved by, agreed to by, or notified to the competent authority or equivalent documents for foreign legal entities according to regulations in the country of origin; and
2. a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian legal entities or equivalent documents valid for foreign legal entities;
  b. a completed biography list of board members and commissioners using Format 6 as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, accompanied by:
3. personal data:
  a) a photocopy of identity documents in the form of an Identity Card (KTP) or a valid passport; b) a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian citizens or equivalent documents valid for foreign citizens; and c) a recent color passport-sized photo.
  c. a statement letter from the legal entity represented by the board of directors that has been completed and affixed with sufficient stamp duty using Format 5 letter B as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing a statement of meeting integrity aspects, financial reputation aspects, and not undergoing a competence and propriety assessment process at a financial services institution.
Completeness of administrative requirement documents as referred to in letter A item 4 for parties nominated as members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries, namely:
a. a completed biography list using Format 6 as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, accompanied by:
1. personal data:
  a) a photocopy of identity documents in the form of an Identity Card (KTP) or a valid passport; b) a photocopy of the Taxpayer Identification Number (NPWP) for Indonesian citizens or equivalent documents valid for foreign citizens; and c) a recent color passport-sized photo.
2. formal education history documents:
  a) a photocopy of the highest diploma; and b) a photocopy of skill certificates (if any);
3. training and seminar documents attended (if any):
  a) a photocopy of graduation certificates or attendance certificates for training attended; and b) a photocopy of attendance certificates for seminars attended;
4. work history documents:
  a) a letter of work experience; b) a recommendation letter from the financial services institution where the prospective key party holds office, if there are concurrent positions permitted by applicable legislation; c) a statement letter affixed with sufficient stamp duty to resign from the financial services institution where the prospective key party holds office, if there are concurrent positions not permitted by applicable legislation; d) a recommendation from the institution having authority in setting fatwas in the Sharia field, specifically for members of the Sharia Supervisory Board; e) a letter stating not currently subject to sanctions from professional associations, for Company Actuaries;
5. awards relevant to the financial industry achieved (if any).
  b. a statement letter that has been completed, affixed with sufficient stamp duty, and signed by the nominated party as a member of the Board of Directors, member of the Board of Commissioners, member of the Sharia Supervisory Board, Internal Auditor, and Company Actuary using Format 5 letter C as contained in Appendix I, which is an inseparable part of this Financial Services Authority Circular, containing a statement of meeting integrity aspects, financial reputation aspects, and not undergoing a competence and propriety assessment process at a financial services institution;
  c. a writing regarding plans to be carried out after appointment in the targeted position, including:
6. the vision and mission of the prospective Key Party;
7. short-term, medium-term, and long-term work programs to be carried out by the prospective Key Party during their tenure; and
8. short-term, medium-term, and long-term targets to be achieved by the prospective Key Party during their tenure; and
9. the prospective Key Party's understanding of consumer protection and market conduct in the financial services sector;
  d. a statement letter of no affiliation with the PPDP for prospective independent commissioners.
In the event that the Financial Services Authority assesses that the completeness of documents referred to in items 1 through 5 is not yet met, the Financial Services Authority has the authority to request additional documents supporting the aforementioned documents.

C. Administrative Requirement Compliance List

Before the PPDP submits administrative requirement documents to the Financial Services Authority in the nomination application, the PPDP must first fill out the administrative requirement compliance list as referred to in letter A item 5.
The PPDP must submit the results of the administrative requirement compliance list as referred to in item 1 to the Financial Services Authority, signed by:
a. prospective owners, founders, or competent PPDP officials in the case of a PPDP establishment license application; or b. competent PPDP officials in the case where the PPDP has obtained a business license.
The submission of the results of the administrative requirement document compliance list as referred to in item 2 is accompanied by an explanation stating that the submitted administrative requirement documents:
a. are complete and correct in terms of quantity, format, and substance; and b. state that the administrative requirement documents in the form of "statements" and "lists" are correct and have been filled out and signed by the proposed candidates.
The administrative requirement compliance list as referred to in item 2 is submitted together with the submission of the administrative requirement documents of the proposed candidates.

D. Self-Assessment

Self-assessment of prospective members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries as referred to in letter A item 6 is conducted by the PPDP before submission to the relevant Financial Services Authority, concerning:
a. assessment of compliance with integrity, financial reputation, and competence requirements for prospective members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries to be submitted. The assessment must at least cover the assessment of track record including sanctions previously given by the PPDP, educational background both formal and informal, and achievements achieved in the implementation of duties, the candidate's ability to hold the position to be held, concurrent positions, and ownership of credit and/or non-performing financing; and b. compliance with requirements according to legislation.
The results of the self-assessment as referred to in item 1 are submitted to the Financial Services Authority at the time of submitting the application.

E. Submission Address

Application letters for approval to become Key Parties along with administrative requirement documents as referred to in letter A items 3 and 4, and the results of self-assessment as referred to in letter D item 2 are submitted in complete form to the Financial Services Authority.
Submission of application letters for approval to become Key Parties along with administrative requirement documents, and the results of self-assessment as referred to in item 1 is addressed to:
Executive Head of Insurance, Guarantee, and Pension Fund Supervision Up. Director of Licensing for Insurance, Guarantee, and Pension Funds Wisma Mulia 2, 11th Floor Jl. Gatot Subroto Kav. 42 Jakarta 12710
In the event of a change in the address of the Financial Services Authority office for the submission of application letters for approval to become Key Parties along with administrative requirement documents, and the results of self-assessment as referred to in item 2, the Financial Services Authority will convey notification regarding the address change via letter or announcement.

V. PROCEDURES FOR IMPLEMENTATION OF COMPETENCE AND PROPRIETY ASSESSMENT

A. Administrative Assessment

The implementation of competence and propriety assessment for prospective PSP or prospective Controlling Party of an Insurance Company includes stages:
a. administrative assessment; and b. determination of the results of the competence and propriety assessment.
The implementation of competence and propriety assessment for prospective members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, Internal Auditors, and Company Actuaries includes stages:
a. administrative assessment; and b. determination of the results of the competence and propriety assessment.
Administrative assessment is conducted to assess whether the application for approval to become a Key Party has met integrity, financial reputation or financial viability, and/or competence requirements.
In the event that the administrative requirement documents received by the Financial Services Authority are incomplete, the Financial Services Authority requests the PPDP to complete the administrative requirement documents as referred to in Roman IV letter B within a maximum period of 20 (twenty) working days.
In the event that the PPDP does not submit the missing administrative requirement documents within a maximum period of 20 (twenty) working days as referred to in item 4, the PPDP is deemed to have cancelled the application for approval to become a Key Party.
The Financial Services Authority issues a rejection letter for the application letter for approval to become a Key Party submitted by the PPDP if the administrative requirement documents are declared incorrect.
In the context of administrative assessment in the implementation of competence and propriety assessment as referred to in item 3, the OJK may request information and/or recommendation letters regarding Key Parties from other competent parties.

B. Presentation or Exposition by Prospective PSP or Prospective Controlling Party of an Insurance Company

In the context of administrative assessment for prospective PSP or prospective Controlling Party of an Insurance Company, the concerned party must conduct a presentation or exposition.
In the event that the prospective PSP or prospective Controlling Party of an Insurance Company is the central government or local government, the presentation or exposition as referred to in item 1 is conducted if deemed necessary.
The presentation or exposition must be conducted by the prospective PSP or prospective Controlling Party of an Insurance Company in the context of administrative assessment as referred to in item 1, at least regarding:
a. the plans of the prospective PSP or prospective Controlling Party of an Insurance Company for the development of the Insurance Company or Guarantee Institution to be owned and/or controlled for at least 3 (three) years from the time of ownership; and b. the strategy of the prospective PSP and prospective Controlling Party of an Insurance Company in the event that the Insurance Company or Guarantee Institution to be owned and/or controlled experiences financial difficulties.
The Financial Services Authority notifies the schedule for the implementation of the presentation or exposition as referred to in item 1 in writing to the Board of Directors of the PPDP no later than 10 (ten) working days after the application for competence and propriety assessment as referred to in Roman IV letter A item 3 along with administrative requirement documents as referred to in Roman IV letter A item 4 is received completely by the Financial Services Authority.
Prospective PSP or prospective Controlling Party of an Insurance Company who cannot attend the scheduled presentation or exposition as referred to in item 5 must submit written notification accompanied by valid reasons to the Financial Services Authority no later than 1 (one) working day before the implementation of the competence and propriety assessment.
Based on the written notification as referred to in item 5, the Financial Services Authority may provide 1 (one) opportunity for presentation or exposition and convey a new schedule for the implementation of the presentation or exposition to the prospective PSP or prospective Controlling Party of an Insurance Company.
In the event that based on the written notification as referred to in item 5 the Financial Services Authority does not provide an opportunity for presentation or exposition to the prospective PSP or prospective Controlling Party of an Insurance Company or the concerned party does not attend the implementation of the presentation or exposition according to the new schedule without notification, the Financial Services Authority cancels the application for approval to become a Key Party of the prospective PSP or prospective Controlling Party of an Insurance Company.
The Financial Services Authority conveys notification of the cancellation of the application of the prospective PSP or prospective Controlling Party of an Insurance Company in the event that the concerned party does not attend the implementation of the presentation or exposition:
a. without notification; or b. with notification but the reason for absence is not accepted by the Financial Services Authority.
The presentation or exposition as referred to in item 1 is conducted in the Indonesian language.
Prospective PSP or prospective Insurance Company Controllers who cannot speak Indonesian must provide their own translation services during the presentation or briefing.
In the event that the prospective PSP or prospective Insurance Company Controller is a legal entity, the presentation or briefing as referred to in item 1 may be conducted by the directors of that legal entity, the directors of another legal entity within its business group, or the ultimate shareholders of that legal entity.
In the event that the directors of another legal entity within its business group or the ultimate shareholders of that legal entity as referred to in item 11 are unable to attend, they may be represented by another official one level below the directors based on a letter of appointment (power of attorney).

C. Clarification of Prospective Members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company

Based on the results of the administrative assessment conducted as referred to in letter A item 2 letter a and information and/or recommendation letters obtained by the Financial Services Authority regarding Key Parties from other authorized parties as referred to in letter A item 7, the Financial Services Authority may determine that prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company require a clarification process, if:

a. there is negative information regarding the prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company; b. the prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company do not yet have relevant experience in Insurance Companies, Guarantee Institutions, or Pension Funds (PPDP) in Indonesia with regard to the position sought, considering the position, size, complexity, and/or problems of the PPDP where the candidate will be nominated; and/or
c. the prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company have previously been determined as not approved in prior nominations.

The provisions regarding the necessity of conducting clarification for PPDP based on the experience of prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company as referred to in item 1 letter b may be implemented based on the criteria in the table as contained in Appendix II, which is an integral part of this Financial Services Authority Circular Letter.
The category “N” as referred to in Appendix II means that clarification may be conducted in certain cases, for example, when there is a transfer to an equivalent position but with increased complexity or the need for specific expertise.
The Financial Services Authority conducts clarification of prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company as referred to in item 1 to obtain explanations from the concerned party regarding information obtained by the Financial Services Authority or to assess the concerned party's experience or expertise.
The Financial Services Authority notifies the schedule for conducting the clarification as referred to in item 1 in writing to the Board of Directors of the PPDP no later than 10 (ten) working days after the application for competence and propriety assessment as referred to in Roman IV letter A item 3 along with the administrative requirement documents as referred to in Roman IV letter A item 4 are received completely by the Financial Services Authority.
Prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company who cannot attend the scheduled clarification as determined as referred to in item 5 must submit written notification accompanied by valid reasons to the Financial Services Authority no later than 1 (one) working day before the implementation of the competence and propriety assessment.
Based on the written notification as referred to in item 6, the Financial Services Authority may grant 1 (one) opportunity for clarification and provide a new clarification schedule to the prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company.
In the event that, based on the written notification as referred to in item 6, the Financial Services Authority does not grant a clarification opportunity to the prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company, or the concerned party does not attend the clarification implementation according to the new schedule without notification, the Financial Services Authority cancels the implementation of the competence and propriety assessment for the concerned party.
The Financial Services Authority sends notification of the cancellation of the application to obtain approval to become Key Parties, namely prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company, if the reason for absence as referred to in item 6 is not accepted or if the concerned party does not submit notification regarding their absence in the clarification as referred to in item 6.
In the event that prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company do not attend the clarification implementation without notification or with notification but the reason for absence is not accepted by the Financial Services Authority, the Financial Services Authority determines that the concerned party is not approved and is declared not to meet the competence and propriety requirements.
Clarification as referred to in item 1 is conducted in Indonesian.
Prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company who cannot speak Indonesian must provide their own translation services during the clarification implementation.

D. Implementation of Presentation or Briefing and Clarification of Prospective Key Parties of PPDP

The implementation of presentation or briefing and clarification in the competence and propriety assessment process for prospective Key Parties of PPDP is conducted face-to-face via video conference media.
The implementation of presentation or briefing and clarification via face-to-face interaction using video conference media as referred to in item 1 must be accompanied by a statement letter from the director or equivalent who oversees the compliance function using format 7 as contained in Appendix I, which is an integral part of this Financial Services Authority Circular Letter.
In addition to face-to-face interaction via video conference media as referred to in item 1, in certain conditions, presentation or briefing and clarification may be conducted through direct face-to-face interaction at the Financial Services Authority office or other locations determined by the Financial Services Authority. Examples of certain conditions are:

a. prospective Key Parties in PPDP that are part of a financial conglomerate's main entity; b. prospective Key Parties nominated by PPDP that are currently subject to sanctions of suspension of business activities or restriction of business activities;
c. prospective Key Parties indicated to have committed acts that provide unfair benefits to shareholders, Key Parties, employees, and/or other parties that can harm or reduce the rights of creditors, debtors, policyholders, insured parties, participants, beneficiaries, and/or other consumers; or
d. prospective Key Parties who have previously been declared not approved to become Key Parties due to not meeting integrity requirements.

VI. SUSPENSION OF COMPETENCE AND PROPRIETY ASSESSMENT

The Financial Services Authority suspends the competence and propriety assessment of prospective Key Parties of PPDP if the prospective party is undergoing:

a. legal processes; b. competence and propriety assessment processes at the Financial Services Authority; and/or
c. re-evaluation processes due to indications of integrity, financial viability, financial reputation, and/or competence issues at a financial services institution.

The term undergoing legal processes as referred to in item 1 letter a means that the prospective Key Party is undergoing bankruptcy processes, investigation processes, or judicial processes, including appeals and cassation, in cases involving:

a. criminal offenses in the financial services sector; b. criminal offenses, namely criminal offenses contained in the Criminal Code (KUHP) and/or similar foreign criminal codes with a prison sentence threat of 1 (one) year or more; and/or
c. other criminal offenses with a prison sentence threat of 1 (one) year or more, including corruption, money laundering, narcotics/psychotropics, smuggling, customs, excise, human trafficking, illegal arms trafficking, terrorism, counterfeiting currency, tax offenses, forestry offenses, environmental offenses, maritime and fisheries offenses.

The term undergoing competence and propriety assessment processes at the Financial Services Authority as referred to in item 1 letter b means that the prospective Key Party is submitting an application for competence and propriety assessment to the Financial Services Authority as a prospective Key Party at a financial services institution.
The Financial Services Authority suspends the competence and propriety assessment of prospective Key Parties undergoing competence and propriety assessment processes at the Financial Services Authority as referred to in item 1 letter b for the most recent nomination submitted by the PPDP to the Financial Services Authority.
The term undergoing re-evaluation processes due to indications of integrity, financial viability, financial reputation, and/or competence issues at a financial services institution as referred to in item 1 letter c means that the prospective Key Party is undergoing re-evaluation processes due to indications of integrity, financial viability, financial reputation, and/or competence issues in their capacity as parties who own, manage, supervise, and/or have significant influence on a financial services institution.
The Financial Services Authority notifies in writing the suspension of the competence and propriety assessment to the PPDP submitting the nomination.

VII. PROCEDURES FOR DETERMINING COMPETENCE AND PROPRIETY ASSESSMENT RESULTS AND CONSEQUENCES

A. Classification of Assessment Results

The results of the competence and propriety assessment are classified into 2 (two) predicates as follows:

a. approved; or b. not approved.

Prospective Key Parties who obtain the predicate approved as referred to in item 1 letter a are declared to meet the requirements and obtain approval from the Financial Services Authority to become Key Parties at the PPDP submitting the nomination.
Prospective Key Parties who obtain the predicate not approved as referred to in item 1 letter b are declared not to meet the requirements and do not obtain approval from the Financial Services Authority to become Key Parties at the PPDP submitting the nomination.

B. Determination and Submission of Competence and Propriety Assessment Results

The Financial Services Authority determines the results of the competence and propriety assessment of prospective Key Parties no later than 30 (thirty) working days after all application documents are received completely.
In the event that the competence and propriety assessment process for prospective Key Parties is conducted during the application for establishment, merger, and/or consolidation of PPDP licenses, the Financial Services Authority provides the determination of the competence and propriety assessment results within the time frame according to regulations governing the granting of licenses for the establishment, merger, and/or consolidation of PPDP.
The term establishment license as referred to in item 2 means:

a. approval of Pension Funds; or b. business licenses for Insurance Companies or Guarantee Institutions.

The results of the competence and propriety assessment, namely the predicate approved or predicate not approved for the application of prospective Key Parties as referred to in letter A item 1, are submitted in writing to the PPDP submitting the nomination.
The Financial Services Authority has the authority to notify the results of the competence and propriety assessment to interested parties in the implementation of the Financial Services Authority's functions, duties, and authorities or as mandated by legislation, including the government, shareholders of financial services institutions, or other parties deemed necessary by the Financial Services Authority.

C. Consequences of Assessment Results

For prospective PSP or prospective Insurance Company Controllers who are shareholders obtaining the predicate approved as referred to in letter A item 1 letter a by the Financial Services Authority, the concerned party may purchase shares of the Insurance Company or Guarantee Institution.
For prospective PSP or prospective Insurance Company Controllers who are shareholders obtaining the predicate not approved as referred to in letter A item 1 letter b by the Financial Services Authority but who already hold shares in the Insurance Company or Guarantee Institution, then:

a. the concerned party is obligated to transfer their share ownership in the respective Insurance Company or Guarantee Institution and must not exercise Control; and b. restrictions are placed on the shareholder rights of the respective Insurance Company or Guarantee Institution, namely shareholder rights are only recognized up to the amount of initial shares before the addition of shares that caused the concerned party to become a prospective PSP or prospective Insurance Company Controller who is a shareholder.

The term transferring share ownership in the respective Insurance Company or Guarantee Institution as referred to in item 2 letter a means transferring share ownership in the respective Insurance Company or Guarantee Institution so that the concerned party no longer meets the criteria as a prospective PSP or prospective Insurance Company Controller who is a shareholder.
The transfer of share ownership as referred to in item 2 letter a must be conducted no later than 1 (one) year from the date of non-approval by the Financial Services Authority.
The term shareholder rights as referred to in item 2 letter b includes, for example, the right to attend, quorum calculation, voting in the General Meeting of Shareholders (GMS), and the right to receive distributed dividends.
In the event that prospective PSP or prospective Insurance Company Controllers who are shareholders do not transfer share ownership within the time frame as referred to in item 4, then the shareholder rights as referred to in item 5 for all shares owned by them are not recognized until the concerned party completes the transfer of share ownership.
The Financial Services Authority may determine parties who are not permitted to receive the share transfer as referred to in item 2 letter a.
Parties not permitted to receive share transfers as referred to in item 7 are parties affiliated with the prospective PSP or prospective Insurance Company Controller who is a shareholder, consisting of:

a. parties having family relations up to the second degree with the prospective PSP or prospective Insurance Company Controller who is a shareholder, including to their business group; b. parties who are controllers of the prospective PSP or prospective Insurance Company Controller who is a shareholder;
c. parties where the prospective PSP or prospective Insurance Company Controller who is a shareholder acts as a controller; and
d. parties having financial interdependence with the prospective PSP or prospective Insurance Company Controller who is a shareholder.

The term family relations up to the second degree as referred to in item 8 letter a means both vertical and horizontal relations, including parents-in-law, children-in-law, and siblings-in-law, covering:

a. biological/step/adopted parents; b. biological/step/adopted siblings along with their husbands or wives;
c. biological/step/adopted children;
d. biological/step/adopted grandparents; e. biological/step/adopted grandchildren; f. biological/step/adopted siblings of parents along with their husbands or wives; g. husbands/wives; h. parents-in-law;
i. siblings-in-law;
j. husbands/wives of biological/step/adopted children; k. grandparents of husbands/wives;
l. husbands/wives of biological/step/adopted grandchildren; and/or
m. biological/step/adopted siblings of husbands/wives along with their husbands or wives.

Insurance Companies or Guarantee Institutions are obligated to report the transfer of share ownership as referred to in item 2 letter a to the Financial Services Authority by referring to regulations governing the reporting of articles of association changes related to ownership changes applicable to Insurance Companies or Guarantee Institutions.
In the event that the transfer of share ownership as referred to in item 2 letter a is conducted by transferring shares to parties not permitted to receive share transfers as referred to in item 8, then:

a. the transfer is not considered as a transfer of ownership as referred to in item 2 letter a; b. Insurance Companies or Guarantee Institutions are prohibited from recording the receiving party in the share register of the Insurance Company or Guarantee Institution; and
c. the receiving party does not obtain their rights as a shareholder.

The Financial Services Authority cancels the approval as referred to in letter A item 1 letter a, if after approval is granted:

a. it is discovered that information or documents submitted during the competence and propriety assessment process were incorrect, thereby failing to meet the requirements; and/or b. information obtained from other authorities causes the approved party to no longer meet the requirements.

For prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Audators, or Actuaries of the Company who obtain the predicate approved as referred to in letter A item 1 letter a by the Financial Services Authority, they must be appointed to their positions according to the positions submitted during the competence and propriety assessment application no later than 3 (three) months from the date the competence and propriety assessment results were determined.
In the event that after the time frame as referred to in item 13 has passed, Key Parties who obtained the predicate approved as referred to in letter A item 1 letter a by the Financial Services Authority have not yet been appointed, the PPDP submitting the nomination must notify the Financial Services Authority of the reasons for the non-appointment of the concerned Key Parties no later than 10 (ten) working days from the time frame as referred to in item 13.
PPDP is obligated to report the appointment of prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board, Internal Auditors, or Actuaries of the Company as referred to in item 13 to the Financial Services Authority by referring to regulations governing the reporting of Key Party changes related to management changes applicable to PPDP.
For prospective members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board who were not approved by the Financial Services Authority as referred to in letter A item 1 letter b but who have already been appointed as members of the Board of Directors, Board of Commissioners, or Sharia Supervisory Board, PPDP is obligated to convene a GMS to cancel the appointment of the concerned party within a time frame of no later than 3 (three) months from the date the concerned party's application was declared not approved.
For prospective Internal Auditors, or Actuaries of the Company who were not approved by the Financial Services Authority as referred to in letter A item 1 letter b but who have already been appointed as Internal Auditors, or Actuaries of the Company, PPDP must cancel the appointment of the concerned party within a time frame of no later than 3 (three) months from the date the concerned party's application was declared not approved.
PPDP is obligated to report the convening of the GMS to cancel the appointment of members of the Board of Directors, Board of Commissioners, Sharia Supervisory Board as referred to in item 16 and the cancellation of the appointment of Internal Auditors or Actuaries of the Company as referred to in item 17 to the Financial Services Authority by referring to regulations governing the reporting of Key Party changes applicable to PPDP.

VIII. SANCTION MECHANISM

A. Sanction Provisions for PPDP

PPDP violating provisions as regulated in Article 31 of Financial Services Authority Regulation Number 27/POJK.03/2016 concerning Competence and Propriety Assessment for Key Parties of Financial Services Institutions, are subject to administrative sanctions in stages, namely:

a. written warning; or b. downgrade of health level.

In addition to administrative sanctions as referred to in item 1, the Financial Services Authority has the authority to conduct re-assessment of key parties.
In the event that violations of provisions as referred to in item 1 occur but the violations have been corrected, the Financial Services Authority imposes written warning sanctions that end automatically.
In the event that violations of provisions as referred to in item 1 have been fulfilled, the Financial Services Authority revokes the written warning sanctions.

IX. CLOSING

Provisions in this Financial Services Authority Circular Letter take effect on the date of determination.

Determined in Jakarta on December 12, 2023

EXECUTIVE HEAD OF INSURANCE, GUARANTEE, AND PENSION FUND SUPERVISOR FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA, OGI PRASTOMIYONO

Signed
Signed

APPENDIX I
CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA NUMBER 23/SEOJK.05/2023 CONCERNING COMPETENCE AND PROPRIETY ASSESSMENT FOR KEY PARTIES OF INSURANCE COMPANIES, GUARANTEE INSTITUTIONS, AND PENSION FUNDS

EXAMPLE FORMAT 1 APPLICATION LETTER TO OBTAIN APPROVAL TO BECOME A KEY PARTY

COMPANY LETTERHEAD

Number: (date/month/year)
Attachment:
Subject: Application to Obtain Approval to Become a Key Party in an Insurance Company/Guarantee Institution/Pension Fund*)

To:
Executive Head of Supervision of Insurance, Guarantee, and Pension Funds, Financial Services Authority (OJK) Attention: Director of Licensing for Insurance, Guarantee, and Pension Funds Wisma Mulia 2, 11th Floor Jalan Jendral Gatot Subroto No. 42 South Jakarta, Jakarta 10110

Hereby we submit an application to obtain approval to become a Key Party for:

Name: ..................................................... (Filled in accordance with ID Card)
Position: As
Controlling Party of Insurance Company / Controlling Shareholder of Guarantee Institution / President Director / Director / Commissioner / Independent Commissioner / Internal Auditor / Company Actuary / Pension Fund Manager (Overseeing function ……..) / Pension Fund Supervisory Board (Representative from ……..) / Sharia Supervisory Board*)
Name: ..................................................... (Filled in accordance with ID Card)
Position: As Controlling Party of Insurance Company / Controlling Shareholder of Guarantee Institution / President Director / Director / Commissioner / Independent Commissioner / Internal Auditor / Company Actuary / Pension Fund Manager (Overseeing function ……..) / Pension Fund Supervisory Board (Representative from ……..) / Sharia Supervisory Board*)
... etc:

Along with this, we also submit the list of fulfillment of administrative requirements as referred to in Format 2 of Appendix I of this SEOJK, accompanied by the administrative requirement documents, to obtain approval to become a Key Party.

We inform you that for the purposes of this reporting, you may contact Mr./Ms. ... via email ... or telephone number ... .

This application is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors / Board of Commissioners / Other party appointed by the General Meeting of Shareholders*) Insurance Company / Guarantee Institution / Pension Fund*)
................
………………………………

*) delete what is not necessary

EXAMPLE FORMAT 2 LIST OF FULFILLMENT OF ADMINISTRATIVE REQUIREMENT DOCUMENTS

A. LIST OF FULFILLMENT OF ADMINISTRATIVE REQUIREMENT DOCUMENTS FOR INDIVIDUAL KEY PARTY OR INDIVIDUAL CONTROLLING PARTY OF AN INSURANCE COMPANY

Company Name :
Company Type :
Application Letter Number :
Application Letter Date :

The company submits the following individual names to be proposed as a candidate for Key Party or candidate for Controlling Party of an Insurance Company*):

No
Candidate Key Party/Controlling Party of Insurance Company Name*) Domicile Ownership Percentage Brief description of the background of the application to obtain approval to become a Key Party Contact Person (Name, Phone Number, email)

B. LIST OF FULFILLMENT OF ADMINISTRATIVE REQUIREMENT DOCUMENTS FOR KEY PARTY IN THE FORM OF A LEGAL ENTITY OR CONTROLLING PARTY OF AN INSURANCE COMPANY IN THE FORM OF A LEGAL ENTITY THAT IS A SHAREHOLDER

Company Name :
Company Type :
Application Letter Number :
Application Letter Date :

The company submits the following legal entity to be proposed as a candidate for corporate Key Party / candidate for Controlling Party of an Insurance Company*):

No
Company Name
Name of Party Representing the Company
Position of Key Party Representing
Domicile
Ownership Percentage
Brief description of the background of the application to obtain approval to become a Key Party Contact Person (Name, Phone Number, e-mail)

No
Description
Document
Substance
Yes No
1.
Company Application Letter
Has the application letter been signed by the candidate owner/founder/Board of Directors/Board of Commissioners/other party appointed by the General Meeting of Shareholders*)?
Has the appropriate format for the List of Fulfillment of Administrative Requirement Documents for Application to Obtain Approval to Become a Key Party for Key Party in the Form of a Legal Entity or Controlling Party of an Insurance Company in the Form of a Legal Entity that is a Shareholder*) been used, as per Format 1 in Appendix I of this SEOJK? 2. Party Representing the Company Is the legal entity/business group of the candidate Key Party/Controlling Party of an Insurance Company that is a shareholder*) represented by the Board of Directors/official at the Director level? Has the company questionnaire been used in accordance with Format 4 in Appendix I of this SEOJK? Has a photocopy of the copy of the deed of establishment and the latest amendment to the articles of association, which has been approved by, agreed to by, or reported to the competent authority, or an equivalent document for foreign legal entities in accordance with the regulations in the country of origin, been attached? No Description Document Substance Yes No Party Representing the Company Has a photocopy of the NPWP for Indonesian legal entities or an equivalent document valid for foreign legal entities been attached? 3. Curriculum Vitae Has the curriculum vitae of Board of Directors members and Board of Commissioners members been in accordance with Format 6 in Appendix I of this SEOJK? 4. Annual Financial Report Has the latest audited annual financial report been attached? 5. Declaration Letter Has the declaration letter from the Director or equivalent official representing the legal entity/Key Party/Controlling Party of an Insurance Company that is a shareholder*) been in accordance with Format 5 letter A in Appendix I of this SEOJK? Signature on stamp paper We declare that the entries above are in accordance with the actual documents and if there are discrepancies, corrections will be made. Owner/Founder/Competent Official Insurance Company/Pension Fund/Guarantee Institution*)
................
………………………………
*) delete what is not necessary

C. LIST OF FULFILLMENT OF ADMINISTRATIVE REQUIREMENT DOCUMENTS
FOR CONTROLLING PARTY OF AN INSURANCE COMPANY IN THE FORM OF A LEGAL ENTITY THAT IS NOT A SHAREHOLDER

Company Name :
Company Type :
Application Letter Number :
Application Letter Date :

The company submits the following legal entity to be proposed as a candidate for Controlling Party of an Insurance Company:

No
Company Name
Name of Party Representing the Company
Position of Key Party Representing
Domicile
Brief description of the background of the application to obtain approval to become a Key Party Contact Person (Name, Phone Number, e-mail)

No
Description
Document
Substance
Yes No
List of Fulfillment of Administrative Requirement Documents for Application to Obtain Approval to Become a Key Party for Controlling Party of an Insurance Company in the Form of a Legal Entity that is Not a Shareholder*) 1. Company Application Letter Has the application letter been signed by the candidate owner/founder/Board of Directors/Board of Commissioners/other party appointed by the General Meeting of Shareholders*? Has the appropriate format for the List of Fulfillment of Administrative Requirement Documents for Application to Obtain Approval to Become a Key Party for Controlling Party of an Insurance Company in the Form of a Legal Entity that is Not a Shareholder*) been used, as per Format 1 in Appendix I of this SEOJK? 2. Party Representing the Company Is the legal entity/business group of the candidate Controlling Party of an Insurance Company represented by the Board of Directors/official at the Director level? Has the company questionnaire been used in accordance with Format 4 in Appendix I of this SEOJK? Has a photocopy of the copy of the deed of establishment and the latest amendment to the articles of association, which has been approved by, agreed to by, or reported to the competent authority, or an equivalent document for foreign legal entities in accordance with the regulations in the country of origin, been attached? Has a photocopy of the NPWP for Indonesian legal entities or an equivalent document valid for foreign legal entities been attached? No Description Document Substance Yes No 3. Curriculum Vitae Has the curriculum vitae of Board of Directors members and Board of Commissioners members been in accordance with Format 6 in Appendix I of this SEOJK? 4. Declaration Letter Has the declaration letter from the Director or equivalent official representing the legal entity Controlling Party of an Insurance Company been in accordance with Format 5 letter B in Appendix I of this SEOJK? Signature on stamp paper We declare that the entries above are in accordance with the actual documents and if there are discrepancies, corrections will be made. Owner/Founder/Competent Official Insurance Company/Pension Fund/Guarantee Institution ………………………………

D. LIST OF FULFILLMENT OF ADMINISTRATIVE REQUIREMENT DOCUMENTS FOR BOARD OF DIRECTORS MEMBERS/EXECUTIVE TASK PERFORMERS/BOARD OF COMMISSIONERS MEMBERS/SHARIA SUPERVISORY BOARD MEMBERS/INTERNAL AUDITORS/COMPANY ACTUARIES

List of Fulfillment of Administrative Requirement Documents Application to Obtain Approval to Become a Key Party for Board of Directors Members/Board of Commissioners Members/Sharia Supervisory Board Members/Internal Auditors/Company Actuaries

Company Name :
Company Type :
Reporting Letter Number : Filled in accordance with the number of the application cover letter Reporting Letter Date : Filled in accordance with the date of the application cover letter

The company submits the following individual names to be proposed as a candidate for Key Party of the company:

No
Name
Position
Filled in accordance with ID Card
Filled in accordance with the position in the cover letter.
Specifically for Directors, add information regarding the function to be overseen.
Brief description of the background of the application for the change of Board of Directors/Board of Commissioners/Sharia Supervisory Board/Internal Auditor/Company Actuary*) : Filled with a brief description of the background of the application. Reason for candidacy :
Filled with a brief description of the reason why the candidate Key Party is appointed to the position they are nominated for.
Name of the official being replaced :
Reason for replacing the previous position :
Filled with a brief description of the reason why the previous official ceased to hold their position.
Term of office :
Filled with the period during which the candidate Key Party will serve. In the event that the candidate Key Party has been appointed by the General Meeting of Shareholders/Founder, the number and date of the notarial deed and proof of receipt and recording from the relevant agency regarding the notarial deed containing the appointment of the said Key Party/the decree of appointment by the Pension Fund Founder must be described. Contact Person (Name, Phone Number, e-mail) :

No
Description
Document
Substance
Yes No
Company Application Letter
Has the application letter been signed by the candidate Director/Board of Commissioners/other party appointed by the General Meeting of Shareholders*?
Document signed by ….. as ….. PT ….. which is approved by OJK through Decision Number ….. Date …..
Has the appropriate format for Format 1 in Appendix I of this SEOJK been used?
Curriculum Vitae
Has the curriculum vitae been in accordance with Format 6 of Appendix I of this SEOJK?
Has a photocopy of a valid ID Card/Passport been attached?
Has a photocopy of the NPWP for Indonesian citizens or an equivalent document valid for foreign citizens been attached?
Has a document of formal education history consisting of a photocopy of the latest diploma and expertise certificate (if any) been attached?
Attached:

Latest diploma
Expertise certificate
Risk management certificate/risk management completion letter
Other expertise certificates (if any)
Has a document of training and seminars attended (if any) been attached?
Has a letter of work experience been attached?
Attached all work experience letters of the candidate Key Party Has a letter of recommendation and/or a letter of intent to resign from the previous Financial Services Institution (LJK) been attached?
Attached
letter of recommendation from the financial services institution
where the candidate Key Party serves,
if there are concurrent positions permitted by applicable laws and regulations
Attached
stamped letter of intent to resign from the financial services institution where the candidate Key Party serves, if there are concurrent positions not permitted by applicable laws and regulations . Has a recommendation from an institution having the authority to issue fatwas in the Sharia field been attached, specifically for Sharia Supervisory Board members?
- Not relevant
  Has a letter stating that the candidate is not currently subject to sanctions from the professional association been attached, specifically for Company Actuaries?
  Attached valid letter
  Has a relevant award in the financial industry achieved (if any) been attached?
  3.
  Declaration Letter
  Has the declaration letter from the party nominated as a member of the Board of Directors/Board of Commissioners/Sharia Supervisory Board/Internal Auditor/Company Actuary*) been in accordance with Format 5 letter C in Appendix I of this SEOJK? Signed on sufficient stamp paper. Has a writing regarding the plans to be carried out after being appointed to the target position been attached? Attached work plan document prepared by the candidate Key Party and containing at least:
Vision and Mission of the candidate Key Party (not the Company's Vision and Mission)
Short, medium, and long-term work programs to be carried out during the term of office
Short, medium, and long-term targets to be achieved from each work program
The candidate Key Party's understanding regarding consumer/insured/participant/customer protection aspects and market conduct (e.g., description of regulations regarding consumer protection, description of effective complaint handling/dispute resolution mechanisms, or description of adequate consumer education steps)
The writing of the candidate Key Party mentioned should be linked to the assessment of competency factors conducted by the Nomination and Remuneration Committee as stated in the self-assessment form. Has a letter of non-affiliation with PPDP been attached, for independent commissioner candidates? Signed on sufficient stamp paper. We declare that the entries above are in accordance with the actual documents and if there are discrepancies, corrections will be made. Board of Directors/Board of Commissioners/Competent Official Insurance Company/Pension Fund/Guarantee Institution
................
………………………………
*) delete what is not necessary
*) Regulation on concurrent positions as regulated in OJK Regulations on Good Corporate Governance and/or OJK Regulations on Business Licensing and Institutional Structure in each respective industry

EXAMPLE FORMAT 3 SELF-ASSESSMENT FOR
BOARD OF DIRECTORS MEMBERS/BOARD OF COMMISSIONERS MEMBERS/SHARIA SUPERVISORY BOARD MEMBERS/INTERNAL AUDITORS/COMPANY ACTUARIES

A. SELF-ASSESSMENT OF INTEGRITY REQUIREMENTS
I
INTEGRITY REQUIREMENTS
YES NO DESCRIPTION
A. Competent to perform legal acts
B. Possesses good character and morality
1. Never committed a criminal offense in the financial services sector that has been served within the last 20 (twenty) years before nomination.
2. Never committed a criminal offense, namely a criminal offense listed in the Criminal Code (KUHP) and/or similar KUHP abroad with a prison sentence threat of 1 (one) year or more that has been served within the last 10 (ten) years before nomination.
3. Never committed other criminal offenses with a prison sentence threat of 1 (one) year or more, that has been served within the last 20 (twenty) years before nomination.
-
I
INTEGRITY REQUIREMENTS
YES NO DESCRIPTION
C. Possesses commitment to comply with laws and regulations and support OJK policies
1. Never violated prudential principles in the financial services sector.
2. Never violated laws and regulations in the financial services sector.
D. Possesses commitment to the development of healthy PPDP
1. Never violated commitments agreed upon with the financial services institution supervisor.
2. Possesses commitment not to commit and/or repeat acts and/or actions that cause the person concerned to be listed in the list of parties prohibited from being Key Parties, for candidates who have previously been listed in the list of parties prohibited from being Key Parties.
-
I
INTEGRITY REQUIREMENTS
YES NO DESCRIPTION
3. Never committed acts that provide unfair benefits to shareholders, Key Parties, employees, and/or other parties that can harm or reduce the rights of creditors, debtors, policyholders, insured persons, participants, guarantee recipients, and/or other consumers.
4. Never committed acts that are not in accordance with their authority or beyond their authority.
5. Never declared incapable of exercising their authority.
E. Not included as a party prohibited from becoming a Key Party

B. SELF-ASSESSMENT OF FINANCIAL REPUTATION REQUIREMENTS II FINANCIAL REPUTATION REQUIREMENTS YES NO DESCRIPTION

Does not have non-performing loans and/or financing.
Has never been declared bankrupt and/or has never been a shareholder, Controlling Party of an Insurance Company that is not a shareholder, member of the Board of Directors, or member of the Board of Commissioners who was found guilty of causing a company to be declared bankrupt within the last 5 (five) years before nomination.

C. SELF-ASSESSMENT OF COMPETENCY REQUIREMENTS
COMPETENCY REQUIREMENTS
RATING SCALE
Description
Poor
Once Poor
Fair
Very Good
A. Knowledge and ability in strategic management

Adequate and relevant knowledge with their position
a. Knowledge regarding organizational structure, management, job descriptions, and responsibilities according to position.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's knowledge regarding organizational structure, management, job descriptions, and responsibilities according to position. Description 1a should be different from other descriptions because it explains a different aspect of competency.

COMPETENCY REQUIREMENTS
RATING SCALE
Description
Poor
Once Poor
Fair
Very Good b. Potential ability to perform business process analysis.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's potential ability to perform business process analysis.
Description 1b should be different from other descriptions because it explains a different aspect of competency.

c. Ability to lead an organization to achieve organizational goals, specifically for Board of Directors members.
Rating specific for Board of Directors members.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's ability to lead an organization to achieve organizational goals.
Description 1c should be different from other descriptions because it explains a different aspect of competency.

d. Ability to manage human resources to achieve organizational goals, specifically for Board of Directors members.
Rating specific for Board of Directors members.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's ability to manage human resources to achieve organizational goals. Description 1d should be different from other descriptions because it explains a different aspect of competency.

e. Basic knowledge of supervision including internal control, specifically for Board of Commissioners members and Sharia Supervisory Board members.
Rating specific for Board of Commissioners members and Sharia Supervisory Board members.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's basic knowledge regarding supervision including internal control. Description 1e should be different from other descriptions because it explains a different aspect of competency.

f. Basic knowledge regarding leadership and conflict management, specifically for Board of Commissioners members and Sharia Supervisory Board members.
Rating specific for Board of Commissioners members and Sharia Supervisory Board members.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's basic knowledge regarding leadership and conflict management.
Description 1f should be different from other descriptions because it explains a different aspect of competency.

g. Ability to perform evaluation of company obligations or other technical actuarial aspects.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's ability to perform evaluation of company obligations or other technical actuarial aspects. Description 1g should be different from other descriptions because it explains a different aspect of competency.

Understanding of laws and regulations

COMPETENCY REQUIREMENTS
RATING SCALE
Description
Poor
Once Poor
Fair
Very Good a. Understanding of laws and regulations in the financial services sector, prioritized over laws and regulations in the relevant industry.
Filled with a description that becomes the basis for giving the rating scale related to the candidate Key Party's understanding of laws and regulations in the financial services sector, prioritized over laws and regulations in the relevant industry including provisions regarding consumer/insured/participant/customer protection and investment management. Description 2a should be different from other descriptions because it explains a different aspect of competency.