Marketing Channels for Insurance Products Through Cooperation with Banks (Bancassurance)

To:

Board of Directors of Insurance Companies; and
Board of Directors of Sharia Insurance Companies,

ATTN

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA

NUMBER 31 /SEOJK.05/2022

CONCERNING

MARKETING CHANNELS FOR INSURANCE PRODUCTS
THROUGH COOPERATION WITH BANKS
(BANCASSURANCE)

In relation to the mandate of Article 45 paragraph (3) of Financial Services Authority Regulation Number 23/POJK.05/2015 concerning Insurance Products and Marketing of Insurance Products (State Gazette of the Republic of Indonesia Year 2015 Number 287, Supplement to the State Gazette of the Republic of Indonesia Number 5770) and the existence of changes in regulations regarding bancassurance in the banking sector, as well as to enhance consumer protection, it is necessary to adjust the Financial Services Authority Circular Letter Number 32/SEOJK.05/2016 concerning Marketing Channels for Insurance Products Through Cooperation with Banks (Bancassurance) as follows:

I. GENERAL PROVISIONS

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

Company means an insurance company and a Sharia insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
Bank means:

Commercial Bank as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking;
Sharia Commercial Bank as referred to in Law Number 21 of 2008 concerning Sharia Banking;
Rural Credit Bank which is hereinafter abbreviated as BPR is a rural credit bank as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking; and
Sharia People's Financing Bank which is hereinafter abbreviated as BPRS is a Sharia people's financing bank as referred to in Law Number 21 of 2008 concerning Sharia Banking.

Bancassurance is a cooperation activity between the Company and the Bank in marketing insurance products through the Bank.
Insurance Product means:

a program that promises protection against one (1) or more insurable risks arising from uncertain events 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 guarantees for the fulfillment of obligations of the insured party to other parties if the insured party cannot fulfill its obligations;
a program that promises protection against one (1) or more risks related to the death of the insured person, the life and death of the insured person, or life annuity insurance;
a program that promises protection against one (1) or more risks related to the physical health condition of a person or the decline in the health condition of the insured person; and/or
a program that promises protection against one (1) or more risks by providing compensation or payment to the policyholder, insured, or participant or other entitled parties in the event of an accident.

Insurance Products Linked to Investment which is hereinafter called PAYDI is an Insurance Product that provides at least death risk protection and provides benefits referring to the investment results of a fund pool specifically formed for the Insurance Product, whether expressed in unit form or not.
Micro Insurance Product is an Insurance Product designed to provide protection against financial risks faced by low-income communities.
Insurance Policy is an insurance agreement deed or other documents equated with an insurance agreement deed, and other documents that are an inseparable part of the insurance agreement, which are made in writing and contain an agreement between the Company and the policyholder.
Policyholder is the party that binds itself based on an agreement with an insurance company, Sharia insurance company, reinsurance company, or Sharia reinsurance company to obtain protection or risk management for itself, the insured, or other participants.
Insured is the party facing risks as regulated in the insurance agreement or reinsurance agreement.
Participant is the party facing risks as regulated in the Sharia insurance agreement or Sharia reinsurance agreement.
Business Plan is a business plan as referred to in Financial Services Authority Regulations regarding the business plan of non-bank financial service institutions.

II. REQUIREMENTS AND CRITERIA FOR BANCASSURANCE

Cooperation between the Company and the Bank is categorized as Bancassurance if the cooperation mechanism uses 3 (three) business models as follows:

a. Reference
In this business model, the Bank's role is only to refer or recommend an Insurance Product to the Bank's customers who are prospective Policyholders, Insured, or Participants. The Bank's role in marketing is limited to acting as an intermediary in forwarding information about the Insurance Product from the Company to the Bank's customers who are prospective Policyholders, Insured, or Participants, or providing access to the Company to offer Insurance Products to the Bank's customers who are prospective Policyholders, Insured, or Participants.

The reference business model can be distinguished into:

Reference in the context of Bank Products
In this business model, the Bank refers or recommends an Insurance Product to the Bank's customers who are prospective Policyholders, Insured, or Participants, which is a requirement to obtain a banking product. For this business model, the Bank can act as the Policyholder for such coverage.
Reference not in the context of Bank Products
In this business model, the Bank refers or recommends an Insurance Product to the Bank's customers who are prospective Policyholders, Insured, or Participants, which is not a requirement to obtain a banking product. For this business model, the Bank has no interest in the closing of the insurance.

b. Distribution
In this business model, the Bank's role is to market the Insurance Product by providing explanations regarding the Insurance Product directly to the Bank's customers who are prospective Policyholders, Insured, or Participants. The Bank is not only an intermediary in forwarding information about the Insurance Product from the Company to the Bank's customers who are prospective Policyholders, Insured, or Participants, but the Bank also provides direct explanations related to the Insurance Product, such as characteristics, benefits, and risks of the marketed Insurance Product, and forwards the interest or application for closing the Insurance Product from the Bank's customers who are prospective Policyholders, Insured, or Participants to the Company.

c. Product Integration
In this business model, the Bank's role is to market the Insurance Product to the Bank's customers who are prospective Policyholders, Insured, or Participants by modifying and/or combining the Insurance Product with banking products (bundled product). The Bank's role is not only to forward and provide explanations of the Insurance Product to the Bank's customers who are prospective Policyholders, Insured, or Participants, but also to follow up on applications for the bundled product, including those related to the Insurance Product, to the Company.

The Company can market one (1) or more Insurance Products through the Bancassurance mechanism with the same Bank partner and can use more than one (1) business model as referred to in item 1.
The Company must ensure the suitability of the type of Insurance Product to be marketed with the selection of the Bancassurance business model.
Cooperation between the Company and the Bank cannot be categorized as Bancassurance in the event:
a. The Bank acts as the Insured or Participant; b. there is no Bank role in the intermediary process and/or recommendation of the Insurance Product conducted by the Bank; and/or
c. the insured risk is the Bank's assets or Bank employees.
One example of cooperation that cannot be categorized as Bancassurance is an Insurance Product or insurance closing facility given to all or part of the Bank's employees, such as health insurance, life insurance, credit/financing insurance, which is given by the Bank to Bank employees.
In the event that the Insurance Product marketed by the Company to the Bank falls into the category as referred to in item 4, the Company is not permitted to provide commissions or remuneration to the Bank.
Companies that will market Insurance Products through Bancassurance must:
a. meet financial health standards in the form of internal solvency targets; b. not be subject to administrative sanctions;
c. have previously included the Bancassurance plan in the Company's Business Plan in the same year as the planned implementation year of the Bancassurance or 1 (one) year prior;
d. have previously obtained a registration letter or approval letter for the Insurance Product in question from the Financial Services Authority.
Companies marketing Insurance Products through Bancassurance must first obtain Bancassurance approval from the Financial Services Authority.
Bancassurance approval from the Financial Services Authority as referred to in item 8 is not required in the event:
a. The Company that will market Insurance Products through Bancassurance uses the reference business model, both the reference business model in the context of Bank Products and the reference business model not in the context of Bank Products; or b. The Company has obtained Bancassurance approval and there is a change in the Insurance Product that is the object of the Bancassurance agreement, but the change:

does not result in potential changes or additions to insurance risks in the Insurance Product in question; and
there is no change in the business model to be conducted.

As an example, if there is an adjustment or addition of new benefits (riders) to an Insurance Product that has previously obtained Bancassurance approval from the Financial Services Authority, the Company does not need to submit a new approval request as long as there is no change in the business model to be conducted and there is no potential change or addition to insurance risks in the newly marketed Insurance Product.

The provisions as referred to in item 7 letter b do not apply in the event the Bancassurance approval application as referred to in item 8 is:
a. one of the efforts to have administrative sanctions imposed on the Company for not obtaining Bancassurance approval revoked; b. follow-up to the results of direct examination reports from the Financial Services Authority imposed on the Company; or
c. the results of supervision conducted by supervisors, evidenced by a recommendation letter from the supervisor.

III. REQUIREMENTS AND CRITERIA TO BE MET IN EACH BANCASSURANCE BUSINESS MODEL

A. Bancassurance With Reference Business Model

Bancassurance is categorized in the reference business model in the context of Bank Products if it meets the following criteria:
a. The Insurance Product marketed only provides protection benefits; and b. the marketing of the Insurance Product is intended for the interest and protection of the Bank regarding risks related to banking products issued or services provided by the Bank to Bank customers who are prospective Insured or Participants, for example, credit life insurance for home loans (KPR).
Bancassurance is categorized in the reference business model not in the context of Bank Products if the marketing mechanism of the Insurance Product is conducted by the Bank only to the extent of providing reference or recommendation of the Insurance Product with alternative mechanisms as follows:
a. forwarding brochures, leaflets, and/or similar items containing offers, information, and/or explanations from the Company regarding an Insurance Product to be offered to Bank customers who are prospective Policyholders, Insured, or Participants, either face-to-face or through long-distance communication media, including via mail or the Bank's electronic systems/media such as platforms or websites; b. providing rooms within the Bank's office environment or other areas provided by the Bank that can be used by the Company in marketing the Insurance Product (in-branch sales) to Bank customers who are prospective Policyholders, Insured, or Participants; and/or
c. providing data and/or personal information of Bank customers that can be used by the Company in marketing the Insurance Product.
Companies using rooms provided within the Bank's office environment or other areas provided by the Bank to market Insurance Products (in-branch sales) as referred to in item 2 letter b must:
a. clearly display the Company's name on the room, counter, or table used; b. ensure that the Company's employees or sales personnel conducting marketing in the room, counter, or table must continue to use the identity of the Company's employees or sales personnel;
c. have and use marketing kits for the Insurance Product to be marketed in performing their duties; and
d. use attributes belonging to the Company, not the Bank, namely logos or names, whether in the room, counter, table, or clothing worn.
The use of Bank customer data in marketing Insurance Products as referred to in item 2 letter c must still comply with Financial Services Authority Regulations concerning consumer and community protection in the financial service sector, and regulations concerning the use of data and/or personal information of Bank customers.

B. Bancassurance With Distribution and/or Product Integration Business Model

Bancassurance with the distribution business model is a cooperation in marketing Insurance Products conducted by the Bank by providing explanations of the Insurance Product to Bank customers who are prospective Policyholders, Insured, or Participants with alternatives as follows:
a. face-to-face directly with Bank customers who are prospective Policyholders, Insured, or Participants; and/or b. long-distance communication media, including via mail, telephone (telemarketing) after obtaining prior consent from Bank customers who are prospective Policyholders, Insured, or Participants, and/or the Bank's electronic systems/media such as platforms or websites.
Bancassurance with the product integration business model is a cooperation in marketing Insurance Products where the Bank actively markets Insurance Products combined with banking products (bundled product) through alternatives as follows:
a. face-to-face with Bank customers who are prospective Policyholders, Insured, or Participants; and/or b. long-distance communication media, including via mail, telephone (telemarketing) after obtaining prior consent from Bank customers who are prospective Policyholders, Insured, or Participants, and/or the Bank's electronic systems/media such as platforms or websites.
In the event that the marketing of Insurance Products is conducted through long-distance communication media as referred to in item 1 letter b and item 2 letter b, which are personal communication media (e.g., telephone or telemarketing), the product offer must comply with Financial Services Authority Regulations concerning consumer and community protection in the financial service sector.
In the event that the Bank uses marketing channels through electronic systems/media, the Company must ensure that the Bank:
a. complies with Financial Services Authority Regulations concerning the implementation of information technology by commercial banks and Financial Services Authority Regulations concerning standards for the implementation of information technology for rural credit banks and Sharia people's financing banks; b. displays transparent and detailed information and specifications of the Insurance Product; and
c. ensures the availability of services to handle complaints from Policyholders, Insured, or Participants.
PAYDI marketed through the Bancassurance distribution business model as referred to in item 1 is limited only to PAYDI that has a money market investment strategy and/or fixed income investment strategy.
Insurance Products combined with banking products (bundled product) and marketed through the Bancassurance product integration business model as referred to in item 2 must meet the following requirements:
a. can be separated from the product that is the Bank's risk so that the risks of the Insurance Product and the banking product can be identified, measured, monitored, and controlled; b. has characteristics of only providing protection; and
c. the insurance period must be at least the same as the term of the banking product.
In the event that the business model used is distribution or product integration, the Company must ensure that the Bank party to be a cooperation partner in marketing the Insurance Product has employees in sufficient numbers and has an understanding of the complexity of the Insurance Product and/or services and consumer classification according to the scope of Bancassurance.
In the event that the business model used is distribution or product integration, the Company must have and store documents that can prove that Bank employees marketing the Insurance Product have:
a. insurance agency certification issued by the relevant association; and b. received adequate training regarding the Insurance Product to be marketed and how to handle complaints from Policyholders, Insured, or Participants.
The provisions as referred to in item 8 letter a do not apply to the marketing of Micro Insurance Products.
In the event that the business model used is distribution or product integration, the Company must ensure that the Bank party is responsible for the sales personnel or Bank employees tasked with marketing the Insurance Product to have provided explanations regarding the Insurance Product correctly, accurately, completely, in simple language, and without misleading.
In the event that the Insurance Product marketed through Bancassurance is PAYDI, the Company must meet the requirements regarding PAYDI as regulated in Financial Services Authority regulations concerning PAYDI.

IV. DRAFTING OF BANCASSURANCE AGREEMENTS

The Company and the Bank can make one (1) or more Bancassurance agreements.
Each Bancassurance agreement can only contain specifically one (1) business model for one (1) Insurance Product or one (1) bundled product marketed.
Bancassurance agreements must be drafted using the Indonesian language.
In the event that the Bancassurance agreement is drafted bilingually using Indonesian and a foreign language side by side, the Bancassurance agreement must include a clause stating that the language used as the reference in the event of a dispute or difference of opinion is the Indonesian language.
In Bancassurance agreements specifically for the reference business model in the context of Bank Products, there are no provisions that can be interpreted as the Company only marketing Insurance Products with the Bank exclusively.
Bancassurance agreements must at least contain the following:
a. clarity of rights and obligations of each party, especially the existence of clauses stating the responsibility of each party in conducting Bancassurance, including as follows:

for the reference and/or distribution business model, the Company bears the risk for the marketed Insurance Product;
for the distribution business model, the Bank is responsible for the sales personnel; and
for the product integration business model, the Company is responsible for the risks of the Insurance Product and the Bank is responsible for the risks of the banking product;
b. clauses stating that Bank sales personnel are only allowed to use marketing media (marketing kits) and summaries of information about the Insurance Product that have been established or approved by the Company;
c. special clauses related to the business model and/or special features of PAYDI for the distribution business model, including the Company must record and manage specifically the Company's assets and liabilities sourced from PAYDI investments;
d. the business model used; e. the Insurance Product or bundled product marketed; f. the term of the agreement; g. underwriting decisions and claim decisions are fully the authority of the Company; h. procedures for closing insurance and payment of premiums or contributions;
i. clauses stating that coverage begins to apply and is binding since the premium or contribution is received by the Bank party;
j. procedures for claim settlement and payment; k. clauses regulating the amount of commission given by the Company to the Bank in the context of Bancassurance;
l. clarity of responsibility of each party in implementing Anti-Money Laundering - Counter Terrorism Financing (AML-CFT) obligations;
m. clauses containing conditions that cause the end of the cooperation agreement, including the end of cooperation due to one of the parties, either the Company or the Bank, having its business license revoked by the Financial Services Authority;

n. clarity on the settlement of rights and obligations of each party, including obligations to Policyholders, Insureds, Participants, and/or beneficiaries upon the termination of the cooperation agreement, whether due to the expiration of the cooperation agreement term or due to conditions causing the termination of cooperation as referred to in letter m, along with contact details or domicile of the Company that can be reached;

o. clarity on the flow and procedures as well as the boundaries of responsibility of each party for each Insurance Product marketed in the event of disputes and/or complaints with and/or from Policyholders, Insureds, or Participants;

p. clauses containing the Company's right to obtain information regarding Bank customers in accordance with applicable legislation in the context of customer acceptance assessment (closing of Insurance Products) as well as investigation (in the event of claims) for risk management purposes;

q. obligations of the parties to maintain the confidentiality of Bank customer data who are Policyholders, Insureds, Participants, and/or beneficiaries of Insurance Products; and

r. clauses regarding training cooperation between the Bank and the Insurance Company for Bank employees who will market the Insurance Products to be marketed.

V. PROCEDURES FOR BANCASSURANCE APPROVAL APPLICATIONS

Applications for obtaining Bancassurance approval letters as referred to in Roman numeral II item 8 are submitted by the Director or equivalent from the Company to the Financial Services Authority (OJK), attaching the following documents:

a. the Bancassurance approval application form as referred to in the Appendix which is an integral part of this OJK Circular;

b. the draft Bancassurance agreement that has been initialed by both the Bank and the Company;

c. copies of the registration letters or approval letters for the Insurance Products to be marketed through Bancassurance from the Financial Services Authority; and

d. examples of brochures, marketing media, or insurance application forms that include information regarding commissions given to the Bank.

In the event that the Bancassurance used is a distribution or product integration business model, in addition to the document completeness as referred to in item 1, the Company must submit documents proving that Bank employees have met:

a. insurance agency certification issued by the relevant association; and

b. training regarding the Insurance Products to be marketed and currently being marketed (updating knowledge of Insurance Products).

In the event that the Insurance Products marketed through Bancassurance are PAYDI (Pay-as-you-drive Insurance), in addition to submitting documents proving that Bank employees have met the qualifications as referred to in item 2, the Company must submit documents proving that Bank employees hold special PAYDI agency certificates.
The provisions as referred to in item 2 letter a do not apply to the marketing of Micro Insurance Products.
Applications for obtaining Bancassurance approval letters as referred to in item 1 are submitted online by the Company through the OJK data communication network system.
Applications as referred to in item 1 are submitted by uploading all Bancassurance approval requirement documents through the OJK data communication network system.
The Company must coordinate with the Bank in the process of uploading all documents as referred to in item 6 so that the uploading process by the Company and the Bank can be carried out on the same working day or at the latest within 2 (two) working days from the time one of the parties intending to conduct Bancassurance submits the application in the OJK data communication network system.
If the provisions as referred to in item 7 are not met, the application for obtaining Bancassurance approval letters will be automatically declared void by the OJK data communication network system.
The Financial Services Authority analyzes all documents uploaded as referred to in item 6, paying attention to and considering the following:

a. document completeness as referred to in the provisions of this OJK Circular; and

b. compliance with all relevant provisions regarding the marketing of Insurance Products, financial health levels in the form of internal solvency level targets, and the conduct of the Company's business.

In the event that the attached documents do not comply with the provisions or based on the Financial Services Authority's assessment the Company is declared not to meet the requirements to conduct Bancassurance, the Financial Services Authority sends a notification of rejection of the Bancassurance approval application to the Company along with the reasons for rejection.
In the event that the Financial Services Authority rejects the Bancassurance approval application as referred to in item 10, the Company may resubmit the Bancassurance approval application by submitting a new application online as referred to in item 6.
In the event that the documents comply with applicable regulations and based on the Financial Services Authority's assessment the Company is declared to have met the requirements to conduct Bancassurance, the Financial Services Authority issues a Bancassurance approval letter to the Company.
Notifications of rejection of Bancassurance approval applications as referred to in item 10 or Bancassurance approval letters as referred to in item 12 are communicated by the Financial Services Authority within a maximum period of 14 (fourteen) working days since the Company receives notification of the submission of the Bancassurance approval application from the OJK data communication network system.
Bancassurance approval applications submitted online to the Financial Services Authority after 17:00 WIB are recorded as received by the Financial Services Authority on the following working day.
In the event of technical system disturbances by the Financial Services Authority during the submission of Bancassurance approval applications, the applications as referred to in item 1 are submitted to the Financial Services Authority in electronic data form via email designated by the Financial Services Authority.
Bancassurance approval applications in the form of electronic data via email designated by the Financial Services Authority must be submitted by the Company in the form of electronic data which can be color scans of the original documents.
Submission of Bancassurance approval applications in the form of electronic data as referred to in item 16 is sent to the mailing room at wismul@ojk.go.id addressed to:

Executive Head of Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions

Attention:

Director of Institutions and Non-Bank Financial Products I (for Insurance Companies);
Director of Sharia Non-Bank Financial Products (for Sharia Insurance Companies)

Wisma Mulia 2 Building
Jalan Jenderal Gatot Subroto
Jakarta 12710

If technical disturbances as referred to in item 15 are experienced by the Financial Services Authority, the Financial Services Authority announces this via the Financial Services Authority website on the same day the technical disturbance occurs.
The Company is deemed to have submitted the Bancassurance approval application, evidenced by a notification from the Financial Services Authority issued by the OJK data communication system via email to the applicant.
In the event of a change in the Financial Services Authority's office address for the submission of Bancassurance approval applications as referred to in item 17, the Financial Services Authority communicates notification regarding the address change via letter or announcement.
The Company must retain all Bancassurance approval application files for a period in accordance with applicable legislation and must present the aforementioned application files whenever needed for a period in accordance with applicable legislation.

VI. RISK MANAGEMENT OF THE COMPANY IN THE CONTEXT OF BANCASSURANCE

The Company is responsible for the Insurance Products marketed through Bancassurance.
The Company has full authority over the underwriting process, customer acceptance decisions (closing of Insurance Products), and verification (accepting or rejecting) claims in accordance with the terms and conditions of the Insurance Products marketed.
The Company ensures that in Bancassurance, the Company has the right to obtain information regarding Bank customers in the context of assessing Bank customer acceptance for prospective Policyholders, Insureds, or Participants (closing of Insurance Products) as well as investigation (if claims occur) for risk management purposes.
The Company is obligated to be responsible for all actions of the Bank related to the Insurance Products marketed through Bancassurance.
Responsibility as referred to in item 4 includes responsibility for claim payments arising in the event that the Bank has received premiums or contributions but has not yet handed them over to the Company.
Violations of the provisions in item 4 and item 5 are subject to administrative sanctions based on Financial Services Authority Regulations regarding Insurance Products and the Marketing of Insurance Products.
The Company must ensure that Banks conducting Bancassurance comply with provisions regarding the implementation of risk management for Banks conducting Bancassurance.
The Company must obtain a statement from the Bank stating:

a. that the acquisition of data and/or personal information of Bank customers who are prospective Policyholders, Insureds, or Participants from the Bank has obtained written consent or statements from Bank customers who are prospective Policyholders, Insureds, or Participants and has met applicable legislation provisions; and

b. consent from Bank customers who are prospective Policyholders, Insureds, or Participants that the closing of the Insurance Product is an Insurance Product from the Company marketed by the Bank.

Written consent or statements as referred to in item 8 can be evidenced in written form through hardcopy media or electronic media and/or in the form of digital recordings.
The Financial Services Authority may order the Company to stop Bancassurance if the Financial Services Authority assesses that the implemented Bancassurance:

a. does not comply with the Bancassurance agreement;

b. does not comply with applicable legislation;

c. has a negative impact on the Company's health level; and/or

d. has the potential to significantly increase the risks faced by the Company.

The Company must terminate cooperation before the expiration of the agreement or not renew the cooperation if:

a. the Bank does not fulfill obligations as regulated in the Bancassurance agreement, for example, not continuing the payment of premiums or contributions paid by Policyholders, Insureds, or Participants; and/or

b. the Financial Services Authority has ordered the Company to terminate Bancassurance as regulated in item 10.

VII. CONSUMER PROTECTION ASPECTS

Coverage is deemed to commence and be binding calculated from the time premiums or contributions are received by the Bank conducting Bancassurance with the Company.
The Company must ensure that before the closing of the Insurance Product, Bank customers who are prospective Policyholders, Insureds, or Participants have received complete explanations regarding benefits, risks, requirements and procedures, and costs of the Insurance Products offered by the Bank.
Obtaining complete explanations regarding costs to be paid as referred to in item 2 above includes transparency of information regarding commissions given by the Company to the Bank in the context of Bancassurance before the closing of the Insurance Product for Bank customers who are prospective Policyholders, Insureds, or Participants.
In the event that the marketing of Insurance Products is conducted face-to-face, it must be ensured that Bank customers who are prospective Policyholders, Insureds, or Participants who have received explanations as referred to in items 2 and 3, must be documented in a statement letter that the Bank customer who is a prospective Policyholder, Insured, or Participant has received explanations and understands the benefits, risks, requirements and procedures, and costs of the Insurance Products offered by the Bank or Company.
The statement letter as referred to in item 4 must be made in Indonesian or in a foreign language alongside Indonesian and signed by the Bank customer who is a prospective Policyholder, Insured, and/or Participant.
In the event that the marketing of Insurance Products is conducted through remote communication such as telephone or video, the form of certainty that Bank customers who are prospective Policyholders, Insureds, or Participants have received explanations as referred to in items 2 and 3 must be in the form of audio or conversation recordings or videos stating that the Bank customer who is a prospective Policyholder, Insured, or Participant has understood all the explanations.
Information regarding cost transparency to be paid as referred to in item 3 must be included in marketing media, and/or insurance application forms.
The Company must ensure that marketing media contains a statement that the Insurance Products marketed are not the responsibility of the Bank and are not included in the coverage of the deposit guarantee program by the Deposit Insurance Corporation.
The Company must issue policy summaries, Insurance Policy certificates, and membership proof for each Policyholder, Insured, or Participant in written form (through hardcopy media or electronic media).
In the event that the business model used is product integration, policy summaries, Insurance Policy certificates, and membership proof are still issued by the Company, but the Bank may perform printing and storage of copies.
In the policy summaries, Insurance Policy certificates, and membership proof as referred to in item 10, it must be clearly stated that insurance risks are the responsibility of the Company.
The policy summaries, Insurance Policy certificates, and membership proof as referred to in items 10 and 11 must be delivered to prospective Policyholders, Insureds, or Participants.
The Company must ensure that policy summaries, Insurance Policy certificates, and membership proof have been received by prospective Policyholders, Insureds, or Participants.
The Company must ensure that:

a. the Bank always maintains an adequate number of employees with agency certification at each office conducting Bancassurance; and

b. marketing personnel from both the Company and the Bank always comply with Financial Services Authority Regulations regarding consumer and public protection in the financial services sector.

VIII. TRANSITIONAL PROVISIONS

Companies that already have Bancassurance agreements must adjust the clauses or Bancassurance agreements as regulated in Roman numeral IV item 6 within a maximum of 6 (six) months since this OJK Circular takes effect.

IX. CLOSING

Bancassurance approval letters that have been issued by the Financial Services Authority before this OJK Circular takes effect are declared to remain valid.
Bancassurance approval applications that have been submitted to the Financial Services Authority and are not yet completed at the time this OJK Circular is established, such applications will be processed in accordance with the provisions in effect at the time the Company submitted the application.
The provisions in this OJK Circular take effect on the date of establishment.

This copy is in accordance with the original

Director of Law 1
Legal Department

signed
Mufli Asmawidjaja

At the time this OJK Circular takes effect, OJK Circular Number 32 /SEOJK.05/2016 regarding Marketing Channels for Insurance Products Through Cooperation with Banks (Bancassurance) is revoked and declared invalid.

Established in Jakarta on the date 27 December 2022

EXECUTIVE HEAD OF INSURANCE, PENSION FUNDS,
FINANCING INSTITUTIONS, AND
OTHER FINANCIAL SERVICE INSTITUTIONS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

signed
OGI PRASTOMIYONO

APPENDIX
FINANCIAL SERVICES AUTHORITY CIRCULAR
REPUBLIC OF INDONESIA
NUMBER 31 /SEOJK.05/2022
REGARDING
MARKETING CHANNELS FOR INSURANCE PRODUCTS
THROUGH COOPERATION WITH BANKS
(BANCASSURANCE)

BANCASSURANCE APPROVAL APPLICATION FORM

I. BANCASSURANCE APPROVAL APPLICATION LETTER
......... (fill in city name, date, month, year) Number : ....... (fill in with the number of the cover letter from the Director of the Company in charge of Bancassurance) Subject : Bancassurance Approval Application
Attachments: .........

To:
Director ...
Financial Services Authority

With respect,

In accordance with the provisions of the OJK Circular regarding Marketing Channels for Insurance Products Through Cooperation with Banks (Bancassurance), we hereby, the Director ... (fill in Company name), submit an application for approval of marketing of Insurance Product .... (fill in Insurance Product name) through Bancassurance with Bank ... (fill in Bank name) for the business model .... (fill in Bancassurance business model).

In this regard, we attach the complete documents in accordance with applicable provisions.

Thus, we submit this Bancassurance approval application letter.

Thank you for your attention and cooperation.

Sincerely,

Director in charge of
Bancassurance .....(fill in Company name) signature (Name)

II. BANCASSURANCE APPROVAL APPLICATION ASSESSMENT FORM

GENERAL INFORMATION
Company Name
Name and Phone/Email
Contact Person
Technical Person in Charge (PIC):
Director in charge of Bancassurance:
Number and Date of Letter
Bancassurance Approval Application
Insurance Product Name
Bank Name
Business Model
Distribution
Product Integration
Number and Date of Letter
Insurance Product Registration/Approval
Brief Description of Insurance Product

DETAILS OF REQUIREMENTS
I. REQUIREMENT ANALYSIS

Fulfillment of Financial Health and Compliance Requirements
a. The Company meets the provisions regarding financial health levels in the form of internal solvency level targets State the ratio of achievement of the internal solvency level target for the last quarter b. The Company is not currently subject to administrative sanctions If the Insurance Company is subject to sanctions, state:
a. type of violation b. sanction letter number
c. type of sanction
c. The Company has included the Bancassurance plan in the Company's Business Plan in the same year as the planned implementation of Bancassurance or 1 (one) year prior
State the title and date of the Company's Business Plan
Status of Insurance Product Reporting
The Insurance Products listed in the Bancassurance agreement have obtained State the number and date of the registration/approval letter

Insurance Product Registration/Approval Letters Insurance Products

II. DOCUMENT COMPLETENESS ANALYSIS

Bancassurance agreement draft:
a. that has been initialed by all parties b. specifically contains 1 (one) business model for 1 (one) Insurance Product or 1 (one) bundled product
c. is drafted using the Indonesian language
In the event that the Bancassurance agreement is drafted bilingually using Indonesian and a foreign language side by side, the Bancassurance agreement must contain a clause stating that the language used as the reference in the event of disputes or differences of opinion is the Indonesian language
Copy of approval/registration letter for Insurance Products
Examples of brochures, marketing media, or insurance application forms that include information regarding commissions given to the Bank
Copy of insurance agency certificates from Bank employees who will market the Insurance Products
Specifically for distribution and product integration;
Does not apply to the marketing of Micro Insurance Products
Proof that Bank employees have received training regarding the Insurance Products to be marketed
Specifically for distribution and product integration

III. COMPLIANCE AND SUBSTANTIVE ANALYSIS

Bancassurance Agreement Draft
a. clarity of rights and obligations of each party, especially the presence of clauses stating the responsibility of each party in conducting Bancassurance, including the following:

for reference and/or distribution cooperation business models, the risk of Insurance Products sold is borne by the Company
for distribution business models, the Bank is responsible for marketing personnel.
for product integration business models, the Company is responsible for the risks of the Insurance Products and the Bank is responsible for the risks of banking products;
b. clauses stating that Bank marketing personnel are only allowed to use marketing media (marketing kit) and summaries of Insurance Product information that have been established or approved by the Company;
c. special clauses related to the business model and/or special features of Insurance Products for the distribution cooperation business model regarding PAYDI, namely among others the Company must record and manage specifically the Company's assets and liabilities derived from PAYDI investments;
d. business model used; e. Insurance Products or bundled products marketed; f. agreement term; g. underwriting decisions and claim decisions are solely the authority of the Company; h. insurance closing procedures and premium or contribution payments;
i. clauses stating that coverage commences and is binding from the time premiums or contributions are received by the Bank;
j. claim settlement and payment procedures; k. clauses regulating the amount of commissions given to the Bank in the context of Bancassurance;
l. clarity of responsibility of each party in implementing Anti-Money Laundering - Counter Financing of Terrorism (AML-CFT) obligations;
m. clauses containing conditions that cause the termination of the cooperation agreement, including the termination of cooperation due to one of the parties, either the Company or the Bank, having its business license revoked by the Financial Services Authority; n. clarity on the settlement of rights and obligations of each party, including obligations to Policyholders, Insureds, or Participants and/or beneficiaries upon the termination of the cooperation agreement, whether due to the expiration of the cooperation agreement term or due to conditions causing the termination of cooperation as referred to in letter m, along with contact details or domicile of the Company that can be reached; o. clarity on the flow and procedures as well as the boundaries of responsibility of each party for each Insurance Product marketed in the event of disputes and/or complaints with and/or from Policyholders, Insureds, or Participants;

each party regarding each Insurance Product marketed in the event of disputes and/or complaints with and/or from the Policyholder, Insured, or Participant;

p. clauses containing the Company's right to obtain information regarding Bank customers in accordance with applicable legislation regulations in the event of customer acceptance assessment (closing of Insurance Products) or investigation (in the event of claims) for risk management purposes;

q. the obligation of the parties to maintain the confidentiality of Bank customer data who are Policyholders, Insured, Participants, and/or beneficiaries of Insurance Products; and

r. clauses regarding training cooperation between the Bank and the Insurance Company for Bank employees who will market the Insurance Products to be marketed;

Insurance Application Letter/Brochure/Marketing Media
Documents must include evidence of transparency of commissions provided to the Bank.
Agent Certificate from the Relevant Association and Evidence that Bank Employees Have Obtained Insurance Product Training

For the specific business model of distribution and product integration:

a. Valid agency certificates for Bank employees (except for Micro Insurance Products)

b. Training materials for the Insurance Products to be marketed for Bank employees

c. Training attendance lists for Bank employees regarding the Insurance Products to be marketed (identities in the attendance list must match the identities of Bank employees in the agency certificate)

IV. DECLARATION

All requirements for the Bancassurance approval application have been met.

We, the undersigned, hereby declare that the information filled in above is in accordance with the actual situation and has been completed with complete and appropriate documents.

(filled with city name, date, month, and year)

Director in charge of Bancassurance .....(filled with Company Name)

signature

(Name)

III. DIRECTOR'S STATEMENT

We, the undersigned, hereby declare that:

The Company meets the financial health requirements in the form of internal solvency target levels;
The Company is not currently subject to administrative sanctions; and
The proposed Bancassurance plan is included in the Company's Business Plan for the Year ..... (filled with the year from the Company's Business Plan).

This statement is made truthfully. If it is later found that this statement is not true, we are willing to be held responsible and may be subject to sanctions in accordance with applicable legislation regulations.

…(filled with city name, date, month, and year)

Director in charge of Bancassurance ....(filled with Company Name)

signature

(Name)

This copy is in accordance with the original

Legal Director 1
Legal Department

signed

Mufli Asmawidjaja

Issued in Jakarta on December 27, 2022

EXECUTIVE HEAD OF INSURANCE SUPERVISOR,
PENSION FUND,
FINANCING INSTITUTIONS, AND
OTHER FINANCIAL SERVICE INSTITUTIONS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

signed

OGI PRASTOMIYONO