Insurance Product Reporting for Sharia Insurance Companies and Insurance Companies Conducting Part of Their Business Based on Sharia Principles

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To:

1. Board of Directors of Sharia General Insurance Companies;
2. Board of Directors of Sharia Life Insurance Companies;
3. Board of Directors of Insurance Companies Conducting Part of Their Business Based on Sharia Principles,
   At their respective locations.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 18 /SEOJK.05/2016

CONCERNING

INSURANCE PRODUCT REPORTING FOR SHARIA INSURANCE COMPANIES AND INSURANCE COMPANIES CONDUCTING PART OF THEIR BUSINESS BASED ON SHARIA PRINCIPLES

In relation to the mandate of Article 44 of Financial Services Authority Regulation Number 23/POJK.05/2015 concerning Insurance Products and Insurance Product Marketing (State Gazette of the Republic of Indonesia Year 2015 Number 287, Supplement to the State Gazette of the Republic of Indonesia Number 5770), it is necessary to regulate further regarding the procedures, forms, and formats for insurance product reporting in this Financial Services Authority Circular as follows:

I. GENERAL PROVISIONS

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

a. Insurance Product is:
1) a program that promises protection against one (1) or more types of insurable risks arising from an uncertain event, by providing compensation to the policyholder, insured, or participant for losses, damages, costs incurred, loss of profit, or legal liability to third parties that may be suffered by the policyholder, insured, or participant, or providing a guarantee for the fulfillment of obligations of the guaranteed party to other parties if the guaranteed party cannot fulfill its obligations;
2) a program that promises protection against one (1) or more types of risks related to the death of an insured person, the life and death of an insured person, or life annuity insurance;
3) a program that promises protection against one (1) or more types of risks related to the physical health condition of a person or the decline in the health condition of an insured person; and/or
4) a program that promises protection against one (1) or more types of risks by providing compensation or payment to the policyholder, insured, or participant, or other entitled parties in the event of an accident.

b. Investment-Linked Insurance Products, hereinafter referred to as PAYDI, are Insurance Products that provide at least death risk protection and provide benefits referring to the investment results of a fund pool specifically formed for the Insurance Product, whether expressed in unit form or not.

c. Joint Insurance Product is an Insurance Product designed to be marketed and underwritten or managed by two (2) or more insurance companies.

d. Standard Insurance Product is an Insurance Product that meets the criteria as regulated in Financial Services Authority Regulation Number 23/POJK.05/2015 concerning Insurance Products and Insurance Product Marketing.

e. Micro Insurance Product is an Insurance Product designed to provide protection against financial risks faced by low-income communities.

f. Insurance Policy is an insurance agreement deed or other documents equated with the insurance agreement deed, as well as other documents that are an inseparable part of the insurance agreement, which are made in writing and contain an agreement between the insurance company and the policyholder.

g. Contribution is a sum of money determined by the Sharia insurance company and agreed upon by the policyholder to be paid based on the Sharia insurance agreement to obtain benefits from the tabarru’ fund and/or participant investment fund, and to pay management costs, or a sum of money determined based on the provisions of underlying legislation for mandatory insurance programs to obtain benefits.

h. Sharia Insurance Company means Sharia general insurance companies and Sharia life insurance companies.

i. Sharia General Insurance Company is a company conducting Sharia general insurance business as referred to in Law Number 40 of 2014 concerning Insurance.

j. Sharia Life Insurance Company is a company conducting Sharia life insurance business as referred to in Law Number 40 of 2014 concerning Insurance.

k. Board of Directors is:
1) for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles in the form of a limited liability company, the Board of Directors as referred to in legislation concerning limited liability companies;
2) for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles in the form of a cooperative legal entity, the management as referred to in legislation concerning cooperatives; or
3) for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles in the form of a joint venture legal entity, the Board of Directors as referred to in the company's articles of association.

l. Company Actuary is an actuary appointed and employed by the Sharia Insurance Company or insurance company conducting part of its business based on Sharia principles.

m. Financial Services Authority, hereinafter abbreviated as OJK, is the Financial Services Authority as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.

2. This OJK Circular regulates the procedures, forms, and formats for Insurance Product reporting for:
   a. Sharia Insurance Companies; and b. Insurance companies conducting part of their business based on Sharia principles, in the context of reporting Sharia Principle Insurance Products.

II. FORMS AND FORMATS FOR INSURANCE PRODUCT APPROVAL REPORTING

1. Insurance Products that must be reported by Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles to OJK to obtain an approval letter are:
   a. New Insurance Products that have never been marketed, other than Standard Insurance Products; and b. New Insurance Products other than Standard Insurance Products that have been marketed and undergo changes including:
   1) risks covered, including exclusions or restrictions on covered risk causes;
   2) Contribution formulations;
   3) risk category changes;
   4) assumptions related to the formation of Contribution formulations; and/or
   5) cash value calculation methods.

2. Insurance Product reporting to obtain an approval letter as referred to in item 1 must be accompanied by the following documents:
   a. new Insurance Product approval reporting form; b. projected Contribution income and expenses related to the marketing of the new Insurance Product for a period of 3 (three) years;
   c. description of the new Insurance Product;
   d. specimen of the Insurance Policy; and e. statement letter from the Sharia supervisory board.

3. In addition to the document completeness as referred to in item 2, reporting of new Insurance Products that are Joint Insurance Products must also be accompanied by documents:
   a. written agreement, if the Joint Insurance Product is a new Insurance Product as referred to in item 1 letter a; or b. approval letter or latest registration letter of the Joint Insurance Product, if the Joint Insurance Product is a new Insurance Product as referred to in item 1 letter b.

4. The new Insurance Product approval reporting form as referred to in item 2 letter a must be prepared according to the following forms and formats:
   a. for Sharia Life Insurance Companies and life insurance companies conducting part of their business based on Sharia principles, reporting Insurance Products other than PAYDI and Joint Insurance Products as referred to in Appendix I; b. for Sharia General Insurance Companies and general insurance companies conducting part of their business based on Sharia principles, reporting Insurance Products other than PAYDI, and Joint Insurance Products as referred to in Appendix II;
   c. for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles, reporting PAYDI as referred to in Appendix III; or
   d. for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles, reporting Joint Insurance Products as referred to in Appendix IV, which are an inseparable part of this OJK Circular.

5. Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles must submit more than one (1) new Insurance Product approval reporting form as referred to in item 4 in the event:
   a. reporting of PAYDI that is a Joint Insurance Product using the forms as referred to in item 4 letter c and letter d; or b. reporting of Insurance Products other than letter a that require a combination of forms as referred to in item 4 according to the characteristics of the reported Insurance Product.

6. The Insurance Product description as referred to in item 2 letter c must be prepared according to the form and format as referred to in Appendix V, which is an inseparable part of this OJK Circular.

7. The statement letter from the Sharia supervisory board as referred to in item 2 letter e must be prepared according to the form and format as referred to in Appendix VI, which is an inseparable part of this OJK Circular.

III. FORMS AND FORMATS FOR INSURANCE PRODUCT REGISTRATION REPORTING

1. Insurance Products that must be reported by Sharia Insurance Companies and Insurance Companies conducting part of their business based on Sharia principles to OJK to obtain a registration letter are:
   a. New Insurance Products that are Standard Insurance Products; and b. Insurance Products that have been marketed and undergo changes other than changes as referred to in Roman II item 1 letter b, with the condition:
   1) the Insurance Product in question is marketed to individual insured persons; or
   2) the Insurance Product in question is marketed to insured persons other than individuals, which has previously had its marketing stopped.

2. Reporting of new Insurance Products that are Standard Insurance Products as referred to in item 1 letter a must be accompanied by the following documents:
   a. new Insurance Product registration reporting form; b. description of the new Insurance Product;
   c. statement letter from the Sharia supervisory board; and
   d. written agreement, specifically for Joint Insurance Products.

3. The new Insurance Product registration reporting form as referred to in item 2 letter a must be prepared according to the following forms and formats:
   a. for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles, reporting Standard Insurance Products other than Joint Insurance Products as referred to in Appendix VII; or b. for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles, reporting Standard Insurance Products that are Joint Insurance Products as referred to in Appendix VIII, which are an inseparable part of this OJK Circular.

4. Registration reporting of Insurance Products that have been marketed and undergo changes as referred to in item 1 letter b must be accompanied by the following documents:
   a. Insurance Product change registration reporting form; b. approval letter or latest registration letter for the Insurance Product or Joint Insurance Product before the change;
   c. description of the Insurance Product;
   d. comparison matrix of the Insurance Product before and after the change; and e. specimen of the Insurance Policy after the change, specifically for Insurance Products other than Standard Insurance Products.

5. The Insurance Product change registration reporting form as referred to in item 4 letter a must be prepared according to the following forms and formats:
   a. for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles, reporting changes to Insurance Products other than Joint Insurance Products as referred to in Appendix IX; or b. for Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles, reporting changes to Joint Insurance Products as referred to in Appendix X, which are an inseparable part of this OJK Circular.

6. The Insurance Product description as referred to in item 2 letter b and item 4 letter c must be prepared according to the form and format as referred to in Appendix V, which is an inseparable part of this OJK Circular.

IV. PROCEDURES FOR SUBMITTING INSURANCE PRODUCT REPORTS

1. Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles are required to report Insurance Products to OJK according to the forms and formats as referred to in the appendices of this OJK Circular.

2. The Insurance Product reports as referred to in item 1 are submitted to OJK online through the OJK data communication network system.

3. In the event that the OJK data communication network system as referred to in item 2 is not available or technical disturbances occur during the submission of Insurance Product reports, the Insurance Product reports as referred to in item 1 are submitted to OJK offline.

4. Offline Insurance Product reports as referred to in item 3 must be submitted in electronic data format via compact disc (CD) or other electronic data storage media, and specifically section A.I and/or B.I of the Insurance Product description as referred to in Appendix V, which is an inseparable part of this OJK Circular, must be prepared in spreadsheet format.

5. If technical disturbances as referred to in item 3 are experienced by OJK, OJK announces this via the OJK website on the same day the technical disturbance occurs.

6. Submission of Insurance Product reports as referred to in item 2 and item 3 must be accompanied by a cover letter signed by:
   a. The Board of Directors; or b. The Board of Directors of the Sharia Insurance Company and insurance company conducting part of their business based on Sharia principles appointed as the chairman in the marketing of Joint Insurance Products.

7. Submission of offline Insurance Product reports as referred to in item 3 is addressed to:
   Financial Services Authority attn. Director of Sharia Financial Institutions Merdeka Tower Building Mailing Room, 12th Floor Jl. Budi Kemuliaan I No.2 Central Jakarta

8. Submission of offline Insurance Product reports as referred to in item 3 can be done in one of the following ways:
   a. handed directly to the OJK office; b. sent via registered post office; or
   c. sent via a courier service company,
   according to the address as referred to in item 7.

9. Sharia Insurance Companies and insurance companies conducting part of their business based on Sharia principles are deemed to have submitted Insurance Product reports with the following conditions:
   a. for online submission via the OJK data communication network system, proven by a receipt from OJK; or b. for offline submission, proven by:
   1) a receipt letter from OJK, if the report is handed directly to the OJK office as referred to in item 8 letter a; or
   2) a shipping receipt from the post office or courier service company, if the report is sent via post office or courier service company as referred to in item 8 letter b and letter c.

10. In the event of a change in the OJK office address for report submission as referred to in item 7, OJK will convey notification regarding the address change via letter or announcement.

V. CLOSING

The provisions in this OJK Circular shall take effect on the date of determination.

Determined in Jakarta on June 1, 2016

EXECUTIVE HEAD OF INSURANCE, PENSION FUND,
FINANCING INSTITUTION, AND
OTHER FINANCIAL SERVICE INSTITUTIONS
FINANCIAL SERVICES AUTHORITY, signed
FIRDAUS DJAELANI

Copy matches the original
Director of Law 1
Law Department signed
Yuliana