Financial Services Authority Regulation

Number 38 of 2024 concerning Amendment to POJK Number 28/POJK.05/2015 on Dissolution, Liquidation, and Bankruptcy of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies

Abstract:

That in order to increase the effectiveness of the implementation of dissolution, liquidation, and bankruptcy of insurance companies, Sharia insurance companies, reinsurance companies, and Sharia reinsurance companies, as well as to implement the provisions of Article 50 paragraph (1) and paragraph (2), and Article 51 paragraph (4) of Law Number 40 of 2014 on Insurance as amended by Law Number 4 of 2023 on Development and Strengthening of the Financial Sector, it is necessary to refine the regulations regarding the dissolution, liquidation, and bankruptcy of insurance companies, Sharia insurance companies, reinsurance companies, and Sharia reinsurance companies.

The legal basis for this Financial Services Authority Regulation (POJK) is: Law No. 21 of 2011 as amended by Law No. 4 of 2023; Law No. 40 of 2014 as amended by Law No. 4 of 2023; Law No. 4 of 2023; and POJK No. 28/POJK.05/2015.

In the implementation of the dissolution and liquidation process, there are disputes regarding the status of the OJK's decision to dissolve the legal entity and form a Liquidation Team to be equated with decisions taken by the General Meeting of Shareholders (GMS). In addition, POJK 28/2015 needs to be harmonized with the provisions on the dissolution of legal entities applicable to other financial service sectors such as banking. The current practice of Liquidation implementation is considered still less effective in resolving issues arising during the Liquidation process.

The refinements made include completing and clarifying provisions regarding the membership of the Liquidation Team, the use of guarantee funds in the implementation of Liquidation, and the addition of provisions regarding Suspension of Debt Payment Obligations.

Requests for Suspension of Debt Payment Obligations against Companies may only be submitted by the OJK. Companies cannot submit requests for Suspension of Debt Payment Obligations for themselves.

In the event that shareholders, members of the Board of Directors, members of the Board of Commissioners, or equivalents, are proven guilty and cause a Company to be declared bankrupt or have its business license revoked, shareholders, members of the Board of Directors, members of the Board of Commissioners, or equivalents are added to the database of the track record of related parties of financial service institutions in the OJK system.

At the time the Government Regulation regarding the implementation of policy guarantees takes effect, regulations regarding Dissolution and Liquidation for participants in policy guarantees shall be implemented in accordance with the provisions in the Deposit Insurance Corporation Regulation.

Note:

This Financial Services Authority Regulation takes effect on the date of promulgation. This Financial Services Authority Regulation was promulgated on December 23, 2024 and established on December 20, 2024.

At the time this Financial Services Authority Regulation takes effect, all approvals granted by the Financial Services Authority in the implementation of the Dissolution and Liquidation process are declared to remain valid. The implementation of the Dissolution and Liquidation process currently in progress shall continue by following the provisions in this Financial Services Authority Regulation.