Financial Services Authority Regulation Number 24/POJK.05/2019 Concerning Business Plans of Non-Bank Financial Institutions

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHABILITY REGULATION
NUMBER 24/POJK.05/2019
CONCERNING
BUSINESS PLANS OF NON-BANK FINANCIAL INSTITUTIONS BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to implement the regulatory and supervisory duties in the non-bank financial institution sector as referred to in Article 8 and Article 9 of Law Number 21 of 2011 concerning the Financial Services Authority, the Financial Services Authority has the authority to establish regulations regarding non-bank financial institutions; b. that in order to direct the operational activities of non-bank financial institutions in accordance with their vision and mission, non-bank financial institutions need to establish strategic objectives and corporate values which are further elaborated in a business plan;
c. that business plans need to be prepared realistically by considering external and internal factors that can affect the sustainability of the business of non-bank financial institutions;
d. that business plans serve as one of the references for supervisors of non-bank financial institutions in formulating optimal and effective supervision plans; e. that in the context of harmonization and integration of regulations regarding business plans applicable to non-bank financial institutions, it is necessary to refine the regulations regarding business plans; f. that based on the considerations referred to in letters a through e, it is necessary to establish a Financial Services Authority Regulation concerning Business Plans of Non-Bank Financial Institutions; Considering:

1. Law Number 11 of 1992 concerning Pension Funds (State Gazette of the Republic of Indonesia Year 1992 Number 37, Supplement to the State Gazette of the Republic of Indonesia Number 3477);
2. Law Number 2 of 2009 concerning the Indonesian Export Financing Agency (State Gazette of the Republic of Indonesia Year 2009 Number 2, Supplement to the State Gazette of the Republic of Indonesia Number 4957);
3. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
4. Law Number 24 of 2011 concerning Social Security Administrating Bodies (State Gazette of the Republic of Indonesia Year 2011 Number 116, Supplement to the State Gazette of the Republic of Indonesia Number 5256);
5. Law Number 40 of 2014 concerning Insurance (State Gazette of the Republic of Indonesia Year 2014 Number 337, Supplement to the State Gazette of the Republic of Indonesia Number 5618);
6. Law Number 1 of 2016 concerning Guarantees (State Gazette of the Republic of Indonesia Year 2016 Number 9, Supplement to the State Gazette of the Republic of Indonesia Number 5835);

DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING BUSINESS PLANS OF NON-BANK FINANCIAL INSTITUTIONS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation:

1. Non-Bank Financial Institutions, hereinafter referred to as LJKNB, are institutions that conduct activities in the insurance, pension fund, financing institution, and other financial services sectors.
2. Business Plan is a written document describing the development plan and business activities of LJKNB within a certain period, as well as strategies to realize such plans in accordance with targets and timeframes established.
3. Board of Directors is the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for LJKNB in the form of a limited liability company legal entity or equivalent to the Board of Directors for LJKNB in the form of a cooperative legal entity, joint venture, pension fund, state-owned enterprise, Indonesian Export Financing Agency, social security administrating body, or limited partnership enterprise.
4. Board of Commissioners is the Board of Commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for LJKNB in the form of a limited liability company legal entity or equivalent to the Board of Commissioners for LJKNB in the form of a cooperative legal entity, joint venture, pension fund, state-owned enterprise, Indonesian Export Financing Agency, social security administrating body, or limited partnership enterprise.
5. Business Plan Realization Report is a report prepared by the Board of Directors regarding the realization of the Business Plan up to a certain period.
6. Business Plan Supervision Report is a report from the Board of Commissioners regarding the results of supervision concerning the implementation of the Business Plan up to a certain period.

Article 2
LJKNB as referred to in Article 1 number 1 includes:

1. insurance companies, consisting of:
   a. insurance companies, including those conducting part of their business based on Sharia principles; b. reinsurance companies, including those conducting part of their business based on Sharia principles;
   c. Sharia insurance companies;
   d. Sharia reinsurance companies; e. insurance brokerage companies; and f. reinsurance brokerage companies, as referred to in regulations concerning insurance;
2. pension funds as referred to in regulations concerning pension funds, including those conducting all or part of their business based on Sharia principles;
3. financing institutions, consisting of:
   a. financing companies, including those conducting part of their business based on Sharia principles; b. Sharia financing companies;
   c. venture capital companies, including those conducting part of their business based on Sharia principles;
   d. Sharia venture capital companies; and e. infrastructure financing companies, including those conducting part of their business based on Sharia principles, as referred to in regulations concerning financing institutions;
4. other financial services institutions, consisting of:
   a. pawnshop companies, including those conducting all or part of their business based on Sharia principles as referred to in regulations concerning pawnshops; b. guarantee institutions, consisting of:

1. guarantee companies, including those conducting part of their business based on Sharia principles;
2. Sharia guarantee companies;
3. reinsurance guarantee companies; and
4. Sharia reinsurance guarantee companies,
   as referred to in regulations concerning guarantees;
   c. online lending service providers as referred to in regulations concerning online lending services;
   d. Indonesian Export Financing Agency as referred to in regulations concerning the Indonesian Export Financing Agency; e. secondary housing financing companies as referred to in regulations concerning secondary housing financing companies; f. social security administrating bodies as referred to in regulations concerning social security administrating bodies; and g. PT Permodalan Nasional Madani (Persero) as referred to in regulations concerning PT Permodalan Nasional Madani (Persero).

CHAPTER II
PREPARATION AND IMPLEMENTATION OF BUSINESS PLANS
Article 3
(1) LJKNB must prepare Business Plans realistically.
(2) In preparing Business Plans as referred to in paragraph (1), LJKNB must consider:
a. medium-term and/or long-term plans; b. external and internal factors that can affect the sustainability of LJKNB's business;
c. prudential principles; and
d. risk management implementation.
(3) In addition to considering factors as referred to in paragraph (2), LJKNB conducting all or part of its business activities based on Sharia principles must prepare Business Plans in accordance with Sharia principles.

Article 4
Business Plans must be prepared by the Board of Directors and approved by the Board of Commissioners.

Article 5
(1) The Board of Directors is obligated to implement Business Plans effectively.
(2) The Board of Directors is obligated to communicate Business Plans to:
a. shareholders or equivalents of LJKNB; and b. all organizational levels within LJKNB.

Article 6
The Board of Commissioners is obligated to supervise the implementation of Business Plans.

CHAPTER III
SCOPE OF BUSINESS PLANS
Article 7
(1) The scope of Business Plans must at least contain:
a. executive summary; b. evaluation of the implementation of the previous period's Business Plan;
c. vision, mission, and business strategy;
d. management policies and plans, including:

1. business activity plans;
2. business activity development or expansion plans;
3. investment plans for insurance companies, Sharia insurance companies, reinsurance companies, Sharia reinsurance companies, pension funds, guarantee institutions, and social security administrating bodies;
4. capital plans, except for pension funds;
5. funding plans, except for guarantee institutions and online lending service providers;
6. office network or distribution channel development and/or change plans;
7. organizational, human resource, and/or information technology development plans; and
8. activities to enhance financial literacy and inclusion plans for insurance companies, Sharia insurance companies, pension funds, financing institutions, Sharia financing companies, venture capital companies, Sharia venture capital companies, pawnshop companies, guarantee companies, and Sharia guarantee companies;
   e. financial projection reports along with assumptions used; f. projection of ratios and specific items; and g. other information.
   (2) For LJKNB conducting part of its business based on Sharia principles, the Business Plan as referred to in paragraph (1) must also include specific business plans for Sharia units or Sharia business units which are an integral part of the Business Plan. (3) Further provisions regarding the scope of Business Plans as referred to in paragraph (1) for each LJKNB are established by the Financial Services Authority.

CHAPTER IV
SUBMISSION, ADJUSTMENT, AND REPORTING OF BUSINESS PLANS First Section Submission of Business Plans
Article 8
(1) LJKNB is obligated to prepare and establish Business Plans annually.
(2) LJKNB is obligated to submit Business Plans to the Financial Services Authority no later than November 30 before the Business Plan year begins.

Article 9
If necessary, the Financial Services Authority may request LJKNB to present or provide a comprehensive explanation regarding the Business Plan submitted by LJKNB.

Second Section
Adjustment of Business Plans
Article 10
(1) In the event that:
a. the Business Plan is assessed as not meeting the scope of Business Plans; and/or b. projections, targets, or plans submitted in the Business Plan are assessed as unrealistic, the Financial Services Authority has the authority to request LJKNB to adjust the Business Plan submitted by LJKNB. (2) LJKNB is obligated to submit adjustments to the Business Plan requested by the Financial Services Authority as referred to in paragraph (1) to the Financial Services Authority no later than 15 (fifteen) working days after the date of the Business Plan adjustment request letter from the Financial Services Authority.

Third Section
Changes to Business Plans
Article 11
(1) LJKNB may only make changes to Business Plans in the event that:
a. there are external and internal factors that significantly affect LJKNB's operations; and/or b. there are factors that significantly affect LJKNB's performance.
(2) For LJKNB conducting part of its business based on Sharia principles, changes to Business Plans are made for the benefit of LJKNB as a whole and/or for the benefit of Sharia units or Sharia business units.

Article 12
(1) Changes to Business Plans as referred to in Article 11 paragraph (1) may only be made once (1).
(2) Changes to Business Plans as referred to in paragraph (1) may only be made no later than the end of June of the current year.
(3) Provisions as referred to in paragraph (1) and paragraph (2) are excluded for changes to Business Plans implemented in the context of government assignments to LJKNB.

Article 13
(1) Changes to Business Plans as referred to in Article 12 paragraph (1) must be submitted to the Financial Services Authority no later than 30 (thirty) working days before the implementation of the Business Plan changes, accompanied by written reasons for the changes. (2) If necessary, the Financial Services Authority may request LJKNB to present or provide explanations regarding changes to Business Plans.

Fourth Section
Business Plan Realization Reports
Article 14
(1) LJKNB is obligated to submit Business Plan Realization Reports semi-annually to the Financial Services Authority.
(2) Business Plan Realization Reports as referred to in paragraph (1) include:
a. explanations regarding the achievement of Business Plans; b. explanations regarding deviations in Business Plan realization;
c. follow-up actions on Business Plan achievements;
d. financial ratios and specific items; and e. other information.
(3) For LJKNB conducting part of its business based on Sharia principles, Business Plan Realization Reports as referred to in paragraph (1) must also contain specific realization reports for Sharia units or Sharia business units which are an integral part of the Business Plan Realization Reports. (4) Business Plan Realization Reports as referred to in paragraph (1) must be submitted to the Financial Services Authority no later than 1 (one) month after the respective semester ends. (5) Further provisions regarding the form and structure of Business Plan Realization Reports for LJKNB as referred to in paragraph (2) are established by the Financial Services Authority.

Fifth Section
Business Plan Supervision Reports
Article 15
(1) LJKNB is obligated to submit Business Plan Supervision Reports semi-annually to the Financial Services Authority.
(2) Business Plan Supervision Reports as referred to in paragraph (1) must at least contain the Board of Commissioners' assessment regarding:
a. Business Plan realization both quantitatively and qualitatively; b. factors affecting LJKNB's performance; and
c. efforts to improve LJKNB's performance.
(3) For LJKNB conducting part of its business based on Sharia principles, Business Plan Supervision Reports as referred to in paragraph (1) must also contain specific supervision reports for Sharia units or Sharia business units which are an integral part of the Business Plan Supervision Reports. (4) Business Plan Supervision Reports as referred to in paragraph (1) must be submitted to the Financial Services Authority no later than 1 (one) month after the respective semester ends. (5) Further provisions regarding the form and structure of Business Plan Supervision Reports as referred to in paragraph (2) are established by the Financial Services Authority.

Article 16
If the final deadline for submitting Business Plans as referred to in Article 8 paragraph (2), the submission of Business Plan Realization Reports as referred to in Article 14 paragraph (4), and the submission of Business Plan Supervision Reports as referred to in Article 15 paragraph (4) falls on a holiday, the final deadlines for submitting Business Plans, Business Plan Realization Reports, and Business Plan Supervision Reports are on the first working day following the holiday.

Sixth Section
Submission Procedures
Article 17
(1) Submission of Business Plans as referred to in Article 8, adjustment of Business Plans as referred to in Article 10, changes to Business Plans as referred to in Article 13, Business Plan Realization Reports as referred to in Article 14, and Business Plan Supervision Reports as referred to in Article 15 are submitted by LJKNB to the Financial Services Authority online through the Financial Services Authority's data communication network system. (2) LJKNB is obligated to ensure that Business Plans submitted online as referred to in paragraph (1) are correct and identical to the printed Business Plan documents.

Article 18
(1) In the event that the Financial Services Authority's data communication network system as referred to in Article 17 paragraph (1) is not yet available or experiences technical disruptions, the submission of Business Plans as referred to in Article 8, adjustment of Business Plans as referred to in Article 10, changes to Business Plans as referred to in Article 13, Business Plan Realization Reports as referred to in Article 14, and Business Plan Supervision Reports as referred to in Article 15 are submitted to the Financial Services Authority offline. (2) In the event of technical disruptions as referred to in paragraph (1), the Financial Services Authority announces this through the Financial Services Authority's website. (3) Offline submission of reports as referred to in paragraph (1) is accompanied by a printed cover letter signed by the Board of Directors.

Article 19
Further provisions regarding the submission procedures for Business Plans as referred to in Article 8, adjustment of Business Plans as referred to in Article 10, changes to Business Plans as referred to in Article 13, Business Plan Realization Reports as referred to in Article 14, and Business Plan Supervision Reports as referred to in Article 15 are established by the Financial Services Authority.

CHAPTER V
COMPLIANCE ENFORCEMENT
First Section
Administrative Sanctions
Article 20
(1) Violations of provisions as referred to in Article 4, Article 5, Article 6, Article 8, Article 10 paragraph (2), Article 13 paragraph (1), Article 14 paragraph (1) and paragraph (4), Article 15 paragraph (1) and paragraph (4), and Article 17 paragraph (2) are subject to administrative sanctions in the form of written warnings, which remain valid until the provisions are fulfilled. (2) Insurance companies, pension funds, and guarantee institutions that do not meet the provisions in Article 8 paragraph (2) and Article 10 paragraph (2) are subject to additional administrative sanctions in the form of administrative fines of IDR 500,000.00 (five hundred thousand rupiah) per day of delay and a maximum of IDR 25,000,000.00 (twenty-five million rupiah). (3) In the event that LJKNB violates provisions as referred to in paragraph (1) but the violation has been corrected, they are still subject to written warning sanctions that end automatically. (4) In the event that LJKNB has fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority revokes the written warning sanctions.

Second Section
Reduction of Risk Assessment Results and Health Ratings, and Re-evaluation of Principal Parties of LJKNB
Article 21
In the event that the Financial Services Authority has imposed administrative sanctions as referred to in Article 20 paragraph (1) and LJKNB does not meet the provisions causing the administrative sanctions to be imposed, the Financial Services Authority may:
a. reduce the results of risk assessment or health ratings; and/or b. conduct re-evaluation of the principal parties of LJKNB.

CHAPTER VI
TRANSITIONAL PROVISIONS
Article 22
(1) For LJKNB that have been supervised by the Financial Services Authority at the time this Financial Services Authority Regulation is promulgated, the provisions in this Financial Services Authority Regulation apply to Business Plans for the 2020 period, submitted no later than November 30, 2019. (2) Any administrative sanctions already imposed for violations of Business Plan submission obligations for LJKNB at the time this Financial Services Authority Regulation is promulgated are declared valid and applicable.

CHAPTER VII
CLOSING PROVISIONS
Article 23
At the time this Financial Services Authority Regulation takes effect:
a. Article 52 of Financial Services Authority Regulation Number 30/POJK.05/2014 concerning Good Corporate Governance for Financing Companies (State Gazette of the Republic of Indonesia Year 2014 Number 365, Supplement to the State Gazette of the Republic of Indonesia Number 6015); b. Article 36 of Financial Services Authority Regulation Number 36/POJK.05/2015 concerning Good Corporate Governance for Venture Capital Companies (State Gazette of the Republic of Indonesia Year 2015 Number 318, Supplement to the State Gazette of the Republic of Indonesia Number 5788);
c. Article 68 of Financial Services Authority Regulation Number 73/POJK.05/2016 concerning Good Corporate Governance for Insurance Companies (State Gazette of the Republic of Indonesia Year 2016 Number 306, Supplement to the State Gazette of the Republic of Indonesia Number 5996);
d. Article 52 of Financial Services Authority Regulation Number 3/POJK.05/2017 concerning Good Corporate Governance for Guarantee Institutions (State Gazette of the Republic of Indonesia Year 2017 Number 8, Supplement to the State Gazette of the Republic of Indonesia Number 6015); e. Article 4 paragraph (3) letter g and Article 5 letter a of Financial Services Authority Regulation Number 55/POJK.05/2017 concerning Periodic Reports of Insurance Companies (State Gazette of the Republic of Indonesia Year 2017 Number 174, Supplement to the State Gazette of the Republic of Indonesia Number 6107); f. Article 31 of Financial Services Authority Regulation Number 4/POJK.05/2018 concerning Secondary Housing Financing Companies (State Gazette of the Republic of Indonesia Year 2018 Number 40, Supplement to the State Gazette of the Republic of Indonesia Number 6192); g. Article 6 letter e and Article 11 letter g of Financial Services Authority Regulation Number 5/POJK.05/2018 concerning Periodic Reports of Pension Funds (State Gazette of the Republic of Indonesia Year 2018 Number 45, Supplement to the State Gazette of the Republic of Indonesia Number 6195); h. Article 52 of Financial Services Authority Regulation Number 15/POJK.05/2019 concerning Pension Fund Governance (State Gazette of the Republic of Indonesia Year 2019 Number 106, Supplement to the State Gazette of the Republic of Indonesia Number 6356);
i. Article 22 and Article 28 of Financial Services Authority Regulation Number 16/POJK.05/2019 concerning Supervision of PT Permodalan Nasional Madani (Persero) (State Gazette of the Republic of Indonesia Year 2019 Number 107, Supplement to the State Gazette of the Republic of Indonesia Number 6357),
are revoked and declared invalid.

Article 24
At the time this Financial Services Authority Regulation takes effect, provisions regarding procedures and methods for imposing administrative sanctions in the insurance sector as regulated in Financial Services Authority regulations concerning procedures and methods for imposing administrative sanctions in the insurance sector and blocking assets of insurance companies, Sharia insurance companies, reinsurance companies, and Sharia reinsurance companies do not apply to violations of this Financial Services Authority Regulation.

Article 25
This Financial Services Authority Regulation takes effect on the date of its promulgation.

This copy is consistent with the original.
Director of Legal Affairs 1
Legal Department signed,
Yuliana

In order that everyone may know it, ordering the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Established in Jakarta on September 19, 2019
CHAIRMAN OF THE COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed,
WIMBOH SANTOSO

Promulgated in Jakarta on September 27, 2019
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed,
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2019 NUMBER 175

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 24 /POJK.05/2019
CONCERNING
BUSINESS PLANS FOR NON-BANK FINANCIAL INSTITUTIONS

I. GENERAL

Law Number 21 of 2011 concerning the Financial Services Authority mandates that the supervisory and regulatory functions over all activities within the financial services sector operating in Indonesia are carried out by the Financial Services Authority (OJK). The purpose of establishing the Financial Services Authority is to ensure that all financial services activities are conducted in an orderly, fair, transparent, and accountable manner, and are capable of protecting consumer and public interests.

To achieve the goal of orderly financial services activities and to strengthen and integrate the regulation of Non-Bank Financial Institutions (LJKNB), it is necessary to have standards for LJKNBs to plan their business development for the future. Support in the form of human resources, product breakthroughs, and innovation by LJKNBs serves as the basis for LJKNBs to conduct business activities consistent with their vision and mission.

In conducting business activities consistent with their vision and mission, the preparation of Business Plans must be realistic while still adhering to the principles of prudence and risk management. Business Plans must also be comprehensive so as to reflect the business activities that LJKNBs will undertake in the future.

In preparing Business Plans, LJKNBs must also consider external and internal factors that directly or indirectly affect the sustainability of LJKNB business operations, thereby producing realistic plans.

On the other hand, Business Plans are a very important reference for LJKNB supervisors at the Financial Services Authority in conducting supervision. Given the importance of Business Plans for LJKNBs, the Financial Services Authority must be able to drive the dynamic development of LJKNBs. One way to do this is by refining regulations related to LJKNB Business Plans.

Through this Financial Services Authority Regulation, provisions regarding Business Plans previously regulated in each respective LJKNB are harmonized into a unified Financial Services Authority Regulation concerning LJKNB Business Plans, which among other things regulates:

1. the preparation and implementation of Business Plans;
2. the scope of Business Plans;
3. the deadline for submitting Business Plans;
4. the submission of Business Plan Realization Reports;
5. the adjustment and amendment of Business Plans;
6. the submission of Business Plan Supervision Reports; and
7. the imposition of sanctions.

II. ARTICLE BY ARTICLE EXPLANATION

Article 1
It is clear enough.

Article 2
It is clear enough.

Article 3
Paragraph (1)
What is meant by "preparing a realistic Business Plan" is preparing a Business Plan by considering external and internal factors that can affect the sustainability of LJKNB business operations, prudential principles, and the principle of healthy financial services institutions, including Sharia principles for LJKNBs that conduct part or all of their business activities based on Sharia principles, so that it is measurable and achievable.

Paragraph (2)
Letter a
It is clear enough.

Letter b
What is meant by "external factors" includes, among others, economic conditions, social and political developments, and technology.
What is meant by "internal factors" includes, among others, financial conditions, management, and other infrastructure capabilities.

Letter c
It is clear enough.

Letter d
It is clear enough.

Paragraph (3)
What is meant by "meeting Sharia principles" is that in preparing Business Plan components related to business activities based on Sharia principles, the LJKNB must meet Sharia principles, among others, fatwas issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI).

Article 4
It is clear enough.

Article 5
Paragraph (1)
A Business Plan is considered effectively implemented if between the realization and the Business Plan there is:
a. immaterial deviation; or b. material deviation, provided that the LJKNB has made maximum efforts to achieve the targets set in the Business Plan, accompanied by adequate and acceptable explanations.

Paragraph (2)
Letter a
Communication with shareholders can be conducted, among others, through a General Meeting of Shareholders or its equivalent.

Letter b
It is clear enough.

Article 6
It is clear enough.

Article 7
Paragraph (1)
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
It is clear enough.

Number 1)
What is meant by "business activity plan" is a plan regarding the implementation of business activities that have been previously carried out by the LJKNB, with reference to the provisions of legislation concerning the conduct of business for each respective LJKNB and business licenses and approvals for business activities granted to the LJKNB by the Financial Services Authority.

Number 2)
What is meant by "business activity development or expansion plan" is a plan for the development or expansion of business activities that have never been issued or implemented previously by the LJKNB, with reference to the provisions of legislation concerning the conduct of business for each respective LJKNB.

Number 3)
It is clear enough.

Number 4)
It is clear enough.

Number 5)
It is clear enough.

Number 6)
It is clear enough.

Number 7)
It is clear enough.

Number 8)
It is clear enough.

Letter e
It is clear enough.

Letter f
It is clear enough.

Letter g
What is meant by "other information" includes, among others, information that needs to be disclosed because it affects the business activities of the LJKNB, but is not yet included in the scope of the Business Plan as referred to in letters a through f.

Paragraph (2)
What is meant by "Sharia unit" is a working unit of an insurance company and reinsurance company that conducts part of its business based on Sharia principles.
What is meant by "Sharia business unit" is a working unit of entities other than insurance and reinsurance companies that conduct part of their business based on Sharia principles.

Paragraph (3)
It is clear enough.

Article 8
It is clear enough.

Article 9
It is clear enough.

Article 10
Paragraph (1)
Letter a
It is clear enough.

Letter b
Examples of Business Plans deemed unrealistic include, among others:

1. a life insurance company submitting a financial rehabilitation plan that cannot resolve its solvency issues; and
2. a pension fund submitting an investment plan involving the purchase of large amounts of land and buildings without considering liquidity needs.

Paragraph (2)
It is clear enough.

Article 11
Paragraph (1)
Letter a
What is meant by external factors that significantly affect LJKNB operations includes, among others, a significant increase in benchmark interest rates, a significant depreciation of the rupiah, and political instability. What is meant by internal factors that significantly affect LJKNB operations includes, among others, significant differences in the realization of financial conditions, management changes that cause changes in LJKNB targets, and changes in LJKNB ownership that cause changes in LJKNB business strategy.

Letter b
What is meant by "factors that significantly affect LJKNB performance" includes, among others, solvency issues, liquidity issues, management changes, and macroeconomic external factors that significantly impact LJKNB performance.

Paragraph (2)
It is clear enough.

Article 12
Paragraph (1)
The restriction on the frequency of Business Plan amendments in this paragraph is intended so that LJKNBs can make more realistic plans when preparing Business Plans.
For LJKNBs that conduct part of their business based on Sharia principles, the restriction on the frequency of Business Plan amendments applies to the LJKNB on a consolidated basis, including with Sharia units or Sharia business units.

Paragraph (2)
It is clear enough.

Paragraph (3)
It is clear enough.

Article 13
It is clear enough.

Article 14
Paragraph (1)
What is meant by "semi-annual" is the position at the end of June and the position at the end of December.

Paragraph (2)
Letter a
The explanation regarding the achievement of the Business Plan includes the focus and priority of Business Plan achievement.

Letter b
The explanation regarding deviations from the realization of the Business Plan includes an explanation of the magnitude of the deviation and the obstacles faced.

Letter c
The follow-up actions regarding the achievement of the Business Plan include efforts to improve the realization achievement of the Business Plan.

Letter d
It is clear enough.

Letter e
Other information includes, among others, reports on the realization of changes in the office network and reports on the realization of changes in capital.

Paragraph (3)
It is clear enough.

Paragraph (4)
It is clear enough.

Paragraph (5)
It is clear enough.

Article 15
Paragraph (1)
It is clear enough.

Paragraph (2)
Letter a
It is clear enough.

Letter b
Factors affecting LJKNB performance include, among others, factors affecting the risk profile, capital, profitability, and good corporate governance.

Letter c
Efforts to improve LJKNB performance are improvements to the factors referred to in letter b.

Paragraph (3)
It is clear enough.

Paragraph (4)
It is clear enough.

Paragraph (5)
It is clear enough.

Article 16
It is clear enough.

Article 17
It is clear enough.

Article 18
It is clear enough.

Article 19
It is clear enough.

Article 20
It is clear enough.

Article 21
Letter a
The Financial Services Authority may lower the risk level or health level assessment results for an LJKNB that already has regulations regarding risk level or financial health level assessments in accordance with the provisions of legislation concerning the assessment of LJKNB risk levels or LJKNB health levels.

Letter b
What is meant by "principal party" is a party that owns, manages, supervises, and/or has significant influence on the LJKNB, including those who no longer own, manage, supervise, and/or have influence at the time of the reassessment as referred to in the Financial Services Authority Regulation concerning reassessment for principal parties of financial services institutions.

Article 22
Paragraph (1)
What is meant by "has been supervised by the Financial Services Authority" is an LJKNB that has been supervised by the Financial Services Authority based on legislation, including having obtained a business license or being registered with the Financial Services Authority. What is meant by "effective for the 2020 Business Plan period" is the obligation regarding the submission of Business Plans, adjustment of Business Plans, amendment of Business Plans, Business Plan Realization Reports, and Business Plan Supervision Reports for LJKNBs that have been supervised by the Financial Services Authority, which becomes effective for the 2020 Business Plan period.

Paragraph (2)
It is clear enough.

Article 23
It is clear enough.

Article 24
It is clear enough.

Article 25
It is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6392