Implementation of Risk Management for Guarantee Institutions

Regulation of the Board of Commissioners of the Financial Services Authority Number 41/PADK.05/2025 concerning Implementation of Risk Management for Guarantee Institutions

Abstract:
To implement the mandate of Article 3 paragraph (4), Article 21 paragraph (4), Article 22 paragraph (8), Article 23 paragraph (2), Article 26 paragraph (4), and Article 30 paragraph (6) of OJK Regulation Number 28 of 2025 concerning the Implementation of Risk Management for Insurance Companies, Guarantee Institutions, and Pension Funds (State Gazette of the Republic of Indonesia Year 2025 Number 38/OJK, Supplement to the State Gazette of the Republic of Indonesia Number 167/OJK), it is necessary to formulate regulations regarding the implementation of Risk Management for Guarantee Institutions. To realize the strengthening of Guarantee Institutions in accordance with the development and strengthening roadmap of the Indonesian guarantee industry and in the context of implementing Risk-Based Supervision (RBS) for Guarantee Institutions, it is necessary to regulate the implementation provisions regarding the implementation of Risk Management for Guarantee Institutions. The legal basis for this Regulation of the Board of Commissioners of the Financial Services Authority (PADK) is: OJK Regulation No. 28 of 2025. The following are the substantive regulations in this PADK:
a. The Main Body which includes the following:

1. provisions regarding the implementation of Risk Management for Guarantee Institutions are regulated in the Appendix of this PADK;
2. provisions regarding the adjustment of the implementation of Risk Management for Guarantee Institutions, namely:
   a) the requirement for Guarantee Institutions to adjust and perfect their Risk Management strategies, policies, and procedures, or internal Risk Management guidelines by referring to this PADK, including those that previously had Risk Management strategies, policies, and procedures or internal Risk Management guidelines before this PADK was established; and b) providing space for Guarantee Institutions to broaden and deepen standard guidelines for the implementation of Risk Management according to their needs; and
3. this PADK takes effect on the date of establishment.
   b. Appendix I which includes the following:
4. general provisions regulating definitions and categories of Guarantee Institutions, definitions and categories of Risk, definitions of risk management, definitions and categories of principal parties (managers), and definitions of related parties in the guarantee scheme;
5. standard guidelines for the implementation of Risk Management at Guarantee Institutions regulating regarding:
   a) the obligation for Guarantee Institutions to implement Risk Management adjusted to their objectives, business policies, size, business complexity, and capabilities of the Guarantee Institution while considering the development of problems faced; conditions and potential risks; b) the requirement for Guarantee Institutions to have and implement written Risk Management strategies, policies, and procedures that refer to the standard guidelines for the implementation of Risk Management (Appendix II) and can be formulated into internal Risk Management guidelines which serve as a minimum reference for Guarantee Institutions in implementing Risk Management, to ensure that all Risks faced by the Guarantee Institution are identified, measured, monitored, and controlled appropriately; c) the scope of Risk Management strategies, policies, and procedures for Guarantee Institutions; d) the requirement for Guarantee Institutions to have an organizational structure that supports the effective implementation of Risk Management, including the organizational structure of the Risk Management Committee and the organizational structure of the Risk Management work unit or function, which is an integral part of the Risk Management organizational structure that must explain the relationship between business and operational functions with Risk Management functions (Appendix III); e) risk measurement approach methods at Guarantee Institutions, including the use of models for internal purposes (internal models) intended to anticipate the development of increasingly complex business activities or anticipate future policies, however, the implementation of such models requires various minimum quantitative and qualitative requirements so that the results of Risk assessments better reflect the actual condition of the Guarantee Institution; f) preparation, development, and/or perfection steps required in the context of implementing effective Risk Management for Guarantee Institutions; and g) the implementation of Risk Management at Guarantee Institutions also includes the implementation of AML, CFT, and PPPSPM as regulated in OJK regulations regarding the implementation of AML, CFT, and PPPSPM programs in the financial services sector.
6. the obligation for Guarantee Institutions to have written policies and procedures to manage inherent risks in the development or expansion of business activities in line with business plans, with criteria:
   a) activities that have never been done before, such as guarantee activities that are not the main guarantee activities; or b) activities that have been implemented previously, but are developed in a way that changes or increases certain Risk exposures.
   In the event that the development or expansion of business activities has a significant impact on overall business activities, the Risk Management strategies, policies, and procedures, or the Guarantee Institution's internal Risk Management guidelines regarding the aspects referred to in Roman numeral II number 7 letters a and b need to be adjusted.
   c. Appendix II which includes standard guidelines for the implementation of Risk Management at Guarantee Institutions.
   d. Appendix III which includes the Risk Management organizational structure at Guarantee Institutions.
   Note:
   This PADK takes effect on the date of establishment.
   This PADK was established on December 12, 2025.