OJK REGULATION NO. 26 OF 2025

ON

ASSET AND LIABILITY MANAGEMENT OF INSURANCE AND REINSURANCE COMPANIES

BY THE GRACE OF GOD THE ALMIGHTY

THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that insurance companies and reinsurance companies, in carrying out risk management related to investment placement and maintaining financial health, need to apply the principle of prudence; b. that regulations regarding investment diversification and investment placement on related and non-related parties have not been comprehensively regulated;
c. that Financial Services Authority Regulation Number 71/POJK.05/2016 on the Financial Health of Insurance and Reinsurance Companies, as amended several times, lastly with Financial Services Authority Regulation Number 5 of 2023 on the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 on the Financial Health of Insurance and Reinsurance Companies, is no longer in line with the development of the insurance industry, so it needs to be replaced;
d. that based on considerations as referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation on Asset and Liability Management of Insurance and Reinsurance Companies;

Recalling:

Law Number 21 of 2011 on 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) as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
Law Number 40 of 2014 on Insurance (State Gazette of the Republic of Indonesia Year 2014 Number 337, Supplement to the State Gazette of the Republic of Indonesia Number 5618) as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);

DECIDES:

Establishes: FINANCIAL SERVICES AUTHORITY REGULATION ON ASSET AND LIABILITY MANAGEMENT OF INSURANCE AND REINSURANCE COMPANIES.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, the following terms are defined as:

Company means insurance company and reinsurance company.
Insurance Company means general insurance company and life insurance company as referred to in Law Number 40 of 2014 on Insurance as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.
General Insurance Company means a company that conducts risk indemnification service business that provides compensation to the insured or policyholder for losses, damages, costs arising, loss of profits, or legal liability to third parties, which may be suffered by the insured or policyholder due to the occurrence of an uncertain event.
Life Insurance Company means a company that conducts risk mitigation service business that provides payment to the policyholder, insured, or other entitled party in the event of the death or survival of the insured, or other payments to the policyholder, insured, or other entitled party at a certain time as regulated in the agreement, the amount of which has been determined and/or based on the results of fund management.
Reinsurance Company means a company that conducts reinsurance service business against risks faced by Insurance Companies, guarantee companies, or other reinsurance companies.
Investment-Linked Insurance Product, hereinafter referred to as PAYDI, is an insurance product that provides at least death risk protection and provides benefits that refer to the investment results of a fund pool specifically formed for the insurance product, whether expressed in unit form or not.
Liability is an obligation as referred to in insurance legislation.
Insurance Fund is a pool of funds originating from premiums formed to meet Liabilities arising from issued policies or insurance claims.
Guarantee Fund is the asset of the Insurance Company or Reinsurance Company that serves as the last resort to protect the interests of policyholders, insured, or participants, in the event of liquidation of the Insurance Company and Reinsurance Company.
Permitted Assets are assets that are calculated in the solvency ratio calculation.
Minimum Risk-Based Capital, hereinafter abbreviated as MMBR, is the amount of funds needed to anticipate potential losses resulting from deviations in the management of Assets and Liabilities.
Solvency Ratio is the difference between the amount of Permitted Assets minus the amount of Liabilities.
Equity is equity based on the financial accounting standards applicable in Indonesia.
Debt Securities and/or Sukuk without Public Offering, hereinafter referred to as EBUS Without Public Offering, are debt securities and/or sukuk issued without going through a public offering mechanism and meeting established criteria.
Net Premium is gross premium minus commission and minus reinsurance premium paid minus reinsurance commission received.
Investment Manager is an investment manager as referred to in Law Number 8 of 1995 on the Capital Market as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.
Bank is a general bank as referred to in Law Number 7 of 1992 on Banking as amended several times, lastly with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector, and a general sharia bank as referred to in Law Number 21 of 2008 on Sharia Banking as amended several times, lastly with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.
People's Economy Bank, hereinafter abbreviated as BPR, is a people's economy bank as referred to in Law Number 7 of 1992 on Banking as amended several times, lastly with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.
Sharia People's Economy Bank, hereinafter referred to as BPR Syariah, is a sharia people's economy bank as referred to in Law Number 21 of 2008 on Sharia Banking as amended several times, lastly with Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.
Custodian Bank is a Bank that has obtained approval from the Financial Services Authority to conduct business activities as a custodian.
Party is an individual or business entity, whether in the form of a legal entity or not, as referred to in Law Number 40 of 2014 on Insurance as amended by Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.
Related Party is an individual or company that has a control relationship with the Company, directly or indirectly, through ownership, management, and/or financial relationships.
Investment Recipient Group is 2 (two) or more individuals and/or companies that mutually have a control relationship through ownership, management, and/or financial relationships, which receive investments from the Company and/or issue securities owned by the Company.
Sub-fund is a fund formed and managed by the Company with a specific investment strategy to provide benefits linked to investments in PAYDI.
Company Actuary is an individual who has obtained certification from the association governing the actuarial field, who is appointed and works full-time as an actuary at the Insurance Company or sharia insurance company where they work.

CHAPTER II

FINANCIAL HEALTH

First Section

Scope of Financial Health

Article 2

To ensure that the Company does not fail to meet its obligations to policyholders and insured, the Company is required to meet financial health standards, including:
a. Solvency Ratio; b. technical reserves or Liabilities related to insurance contracts;
c. investment sufficiency;
d. Equity; e. Guarantee Fund; f. Permitted Assets; g. investment-linked insurance assets; and h. other provisions related to financial health.

Second Section

Solvency Ratio

Article 3

(1) The Company is required to:
a. at all times meet a Solvency Ratio of at least 100% (one hundred percent) of MMBR; and b. every year set an internal Solvency Ratio target of at least 120% (one hundred twenty percent) of MMBR by considering the risk profile of each Company and considering the results of scenario simulation (stress test).

(2) The Financial Services Authority may order the Company to increase the internal Solvency Ratio target as referred to in paragraph (1) letter b by considering the risk profile of the Company and considering the results of scenario simulation (stress test).

(3) The Company must at all times meet the internal Solvency Ratio target as referred to in paragraph (1) letter b and paragraph (2).

Article 4

(1) The calculation of MMBR as referred to in Article 3 paragraph (1) must consider at least:
a. credit risk; b. liquidity risk;
c. market risk;
d. insurance risk; and e. operational risk.

(2) In the event that the Insurance Company markets PAYDI, the calculation of MMBR as referred to in paragraph (1) must be increased by a certain percentage of investment funds sourced from Sub-funds.

(3) Provisions regarding the calculation of the MMBR amount as referred to in paragraph (1) and paragraph (2) are established by the Financial Services Authority.

Third Section

Permitted Assets in the Form of Investment

Article 5

(1) The Company is required to apply the principle of prudence in investment placement.

(2) Permitted Assets in the form of investment must be placed in the following types:
a. time deposits at Banks, BPRs, and Sharia BPRs, including on-call deposits and deposits with a term of less than or equal to 1 (one) month; b. deposit certificates at Banks;
c. securities issued by the Republic of Indonesia;
d. securities issued by Bank Indonesia; e. securities issued by countries other than the Republic of Indonesia; f. securities issued by multinational institutions of which the Republic of Indonesia is a member or shareholder; g. corporate bonds listed on the stock exchange; h. regional bonds;
i. EBUS Without Public Offering;
j. shares listed on the stock exchange; k. mutual funds;
l. asset-backed securities;
m. real estate investment funds in the form of collective investment contracts; n. infrastructure investment funds in the form of collective investment contracts; o. repurchase agreement (REPO); p. direct participation in limited liability companies whose shares are not listed on the stock exchange; q. land, buildings with strata title rights, or land with buildings, for investment; r. pure gold; and/or s. policy loans.

(3) Permitted Assets in the form of investment as referred to in paragraph (2) that can be placed abroad must be in the following types:
a. securities issued by countries other than the Republic of Indonesia; b. securities issued by multinational institutions of which the Republic of Indonesia is a member or shareholder;
c. corporate bonds listed on the stock exchange;
d. shares listed on the stock exchange; e. mutual funds; and/or f. direct participation in companies whose shares are not listed on the stock exchange.

(4) Investment types as referred to in paragraph (2) and paragraph (3) also include investment types using sharia principles.

(5) The valuation basis for each type of investment as referred to in paragraph (2) to paragraph (4) refers to the financial accounting standards applicable to Companies in Indonesia.

(6) Provisions regarding the calculation of the MMBR amount for Companies that place Permitted Assets in the form of investment in:
a. regional bonds as referred to in paragraph (2) letter h, according to the MMBR calculation provisions for placement of Permitted Assets in the form of investment in corporate bonds listed on the stock exchange as referred to in paragraph (2) letter g; and b. infrastructure investment funds in the form of collective investment contracts as referred to in paragraph (2) letter n, according to the MMBR calculation provisions for placement of Permitted Assets in the form of investment in real estate investment funds in the form of collective investment contracts as referred to in paragraph (2) letter m.

Article 6

(1) Placement of Permitted Assets in the form of investment in securities issued by multinational institutions of which the Republic of Indonesia is a member or shareholder as referred to in Article 5 paragraph (2) letter f, must meet the following provisions:
a. have an investment grade rating from an internationally recognized securities rating agency; b. be sold through a public offering; and
c. information regarding the transaction can be accessed in Indonesia.

(2) Placement of Permitted Assets in the form of investment in corporate bonds as referred to in Article 5 paragraph (2) letter g, must be done on corporate bonds that have an investment grade rating from a securities rating agency recognized by the Financial Services Authority.

(3) Placement of Permitted Assets in the form of investment in regional bonds as referred to in Article 5 paragraph (2) letter h, must meet the following provisions:
a. have obtained an effectiveness statement from the Financial Services Authority; and b. have an investment grade rating from a securities rating agency recognized by the Financial Services Authority.

(4) Placement of Permitted Assets in the form of investment in EBUS Without Public Offering as referred to in Article 5 paragraph (2) letter i, must meet the following provisions:
a. meet requirements and/or criteria as regulated in Financial Services Authority Regulation regarding the issuance of debt securities and/or sukuk without going through a public offering; b. have an AAA rating or the highest investment rating issued by a securities rating agency recognized by the Financial Services Authority;
c. be guaranteed/collateralized with a guarantee/collateral value of at least 100% (one hundred percent) of the nominal value of EBUS Without Public Offering; and
d. be issued by state-owned enterprises or institutions granted special authority based on legislation for the management of central government investment guaranteed by the central government.

(5) Placement of Permitted Assets in the form of investment in mutual funds as referred to in Article 5 paragraph (2) letter k, must meet the following provisions:
a. for mutual funds offered through a public offering, have obtained an effectiveness statement from the Financial Services Authority; or b. for closed-end mutual funds that have been listed with the Financial Services Authority, by meeting the following provisions:

guaranteed/collateralized with a guarantee/collateral value of at least 100% (one hundred percent) of the nominal value; and
have an investment grade rating from a securities rating agency recognized by the Financial Services Authority.

(6) Placement of Permitted Assets in the form of investment in asset-backed securities as referred to in Article 5 paragraph (2) letter l and real estate investment funds in the form of collective investment contracts as referred to in Article 5 paragraph (2) letter m, must meet the following provisions:
a. have obtained an effectiveness statement from the Financial Services Authority; and b. have an investment grade rating from a securities rating agency recognized by the Financial Services Authority.

(7) Placement of Permitted Assets in the form of investment in infrastructure investment funds in the form of collective investment contracts as referred to in Article 5 paragraph (2) letter n must meet the following provisions:
a. for infrastructure investment funds in the form of collective investment contracts issued through a public offering, have obtained an effectiveness statement from the Financial Services Authority; b. for infrastructure investment funds in the form of collective investment contracts issued not through a public offering, have been listed with the Financial Services Authority;
c. have an investment grade rating from a securities rating agency recognized by the Financial Services Authority; and
d. one of the investment portfolios of the infrastructure investment fund in the form of collective investment contract in the form of infrastructure assets has generated income.

(8) Placement of Permitted Assets in the form of investment in repurchase agreement (REPO) as referred to in Article 5 paragraph (2) letter o, must meet the following provisions:
a. the result of the assessment of the Company's health level based on the latest assessment at the time of investment placement by the Financial Services Authority is a composite rating of 1 or composite rating of 2 as referred to in Financial Services Authority Regulation regarding the assessment of the health level for Companies; b. using a contract standardized by the Financial Services Authority;
c. transaction in the form of buying securities with a promise to sell back at a set time and price;
d. collateral types limited to securities issued by the Republic of Indonesia and/or securities issued by Bank Indonesia; e. term not exceeding 90 (ninety) days; f. repurchase agreement (REPO) value at most 80% (eighty percent) of the market value of the pledged securities; and g. repurchase agreement (REPO) transaction registered at the Indonesia Central Securities Depository or Bank Indonesia Scriptless Securities Settlement System (BI-S4).

(9) Placement of Permitted Assets in the form of investment in land, buildings with strata title rights, or land with buildings, for investment, as referred to in Article 5 paragraph (2) letter q, must meet the following provisions:
a. owned and controlled by the Company, proven by land and/or building ownership certificates in the name of the Company; and b. not placed on land, buildings, or land with buildings that are currently pledged, in dispute, or blocked by other Parties.

(10) Placement of Permitted Assets in the form of investment in pure gold as referred to in Article 5 paragraph (2) letter r, must meet the following provisions:
a. meet specification requirements and are transacted at:
1. commodity exchanges that have obtained permits from the competent authority; and/or
2. bullion business organizers that have obtained business permits from the Financial Services Authority; and
b. stored at:
1. Custodian Banks;
2. other Parties that have obtained permits or approval from the competent authority to provide custody services; or
3. the Company itself, with the condition that it is insured with another Insurance Company or sharia insurance company.

Article 7

In the event that corporate bonds issued by financing companies do not have an investment grade level as referred to in Article 6 paragraph (2), placement can be done with the following provisions:
a. have a rating 1 (one) level below investment grade; and b. the financing company is not currently subject to administrative sanctions in the form of business activity restrictions, business activity suspension, or specific business activity suspension by the Financial Services Authority.

Article 8

(1) The Company may conduct transactions in the form of selling securities issued by the Republic of Indonesia as referred to in Article 5 paragraph (2) letter c with a promise to buy back at a set time and price (repurchase agreement), to maintain the Company's liquidity conditions.

(2) The implementation of transactions in the form of selling securities issued by the Republic of Indonesia with a promise to buy back at a set time and price (repurchase agreement) as referred to in paragraph (1) is carried out in accordance with Financial Services Authority Regulation regarding guidelines for repurchase agreement transactions for financial service institutions.

Article 9

(1) In the event that the Company places Permitted Assets in the form of investment in direct participation in limited liability companies whose shares are not listed on the stock exchange as referred to in Article 5 paragraph (2) letter p, the Company is prohibited from placing such investments other than on:
a. financial service institutions; b. companies that utilize information technology to generate financial products as their main business; and/or
c. companies supporting the main business activities of insurance.

(2) The maximum limit for overall investment placement in the form of direct participation in limited liability companies whose shares are not listed on the stock exchange as referred to in paragraph (1) is established

by 50% (fifty percent) of the Company's Equity.
(3) The Company must include the direct investment plan in the Company's business plan.
(4) The direct investment plan in the Company's business plan as referred to in paragraph (3) contains at least:
a. the name of the investee company, including the investee's business field; b. the purpose of the direct investment;
c. the projected value of the direct investment; and
d. the projected ownership percentage in the investee company, including control aspects.
(5) The Company is required to obtain approval from the Financial Services Authority before carrying out direct investments based on the direct investment plan contained in the Company's business plan.

Article 10
(1) The Company is prohibited from placing investments in the form of direct investments in limited liability companies whose shares are not listed on a stock exchange, which causes a violation of the maximum investment limit as referred to in Article 9 paragraph (2). (2) Investments in the form of direct investments in limited liability companies whose shares are not listed on a stock exchange that exceed the maximum investment limit as referred to in Article 9 paragraph (2) caused by:
a. a decrease in the Company's Equity; b. exchange rate changes;
c. changes in the fair value of assets; and/or
d. business mergers, changes in ownership structure and/or changes in management structure that cause changes in the investee, are categorized as exceeding the maximum investment limit and not as a violation of the maximum investment limit as referred to in Article 9 paragraph (2). (3) In the event that the Company violates the maximum investment limit as referred to in Article 9 paragraph (2), and/or an exceeding of the maximum investment limit as referred to in paragraph (2) occurs, the nominal value of assets in the form of investments exceeding the maximum investment limit is not counted as Permitted Assets and the Company is required to:
a. submit an action plan for resolving the excess of the maximum investment limit in the form of direct investments in limited liability companies whose shares are not listed on a stock exchange exceeding 50% (fifty percent) of the Company's Equity to the Financial Services Authority; and b. resolve the excess of the maximum investment limit in the form of direct investments in limited liability companies whose shares are not listed on a stock exchange exceeding 50% (fifty percent) of the Company's Equity according to the target time set in the action plan as referred to in letter a.

Article 11
(1) In the event that the Company becomes a shareholder of a Sharia insurance company or a Sharia reinsurance company, investment placements in the form of direct investments as referred to in Article 5 paragraph (2) letter p may exceed the maximum investment limit as referred to in Article 9 paragraph (2). (2) Investment placements that exceed the maximum investment limit as referred to in paragraph (1) are recognized as Permitted Assets.

Article 12
(1) Placements of Permitted Assets in the form of foreign investments in the form of securities issued by countries other than the Republic of Indonesia as referred to in Article 5 paragraph (3) letter a, securities issued by multinational institutions where the Republic of Indonesia is one of the members or shareholders as referred to in Article 5 paragraph (3) letter b, and corporate bonds listed on a stock exchange as referred to in Article 5 paragraph (3) letter c, must meet the following provisions:
a. have an investment grade rating from a securities rating company recognized internationally; b. be sold through a public offering; and
c. information regarding the transaction can be accessed in Indonesia.
(2) Placements of Permitted Assets in the form of foreign investments in the form of shares listed on a stock exchange as referred to in Article 5 paragraph (3) letter d, must meet the following provisions:
a. be included in the category of shares actively traded on the stock exchange where the shares are listed based on criteria established by the said stock exchange; and b. information regarding the issuer and the share transaction can be accessed in Indonesia. (3) Placements of Permitted Assets in the form of foreign investments in the form of mutual funds as referred to in Article 5 paragraph (3) letter e, must meet the following provisions:
a. managed by an Investment Manager abroad who has obtained a license from the capital market authority in the country where the Investment Manager is domiciled; b. have obtained a license/approval/registration from the capital market authority in the country where the said Investment Manager is domiciled and are carried out through a public offering;
c. managed by an Investment Manager abroad who is not currently subject to administrative sanctions in the form of business activity restrictions or suspension of business activities by the authority in the country where the said Investment Manager is domiciled; and
d. information regarding the mutual fund can be accessed in Indonesia.
(4) Provisions as referred to in Article 9 and Article 10 apply mutatis mutandis to placements of Permitted Assets in the form of foreign investments in the form of direct investments in companies whose shares are not listed on a stock exchange as referred to in Article 5 paragraph (3) letter f.

Article 13
(1) In the event that Permitted Assets in the form of investments in the form of securities issued by multinational institutions where the Republic of Indonesia is one of the members or shareholders as referred to in Article 5 paragraph (2) letter f and paragraph (3) letter b are denominated in Rupiah, they are categorized as domestic investments. (2) In the event that Permitted Assets in the form of investments in the form of corporate bonds as referred to in Article 5 paragraph (2) letter g and/or shares as referred to in Article 5 paragraph (2) letter j are listed on a domestic and/or foreign stock exchange and the issuer is a foreign legal entity, they are categorized as foreign investments. (3) In the event that Permitted Assets in the form of investments in the form of corporate bonds as referred to in Article 5 paragraph (2) letter g and/or shares as referred to in Article 5 paragraph (2) letter j are listed on a domestic and/or foreign stock exchange and the issuer is an Indonesian legal entity, they are categorized as domestic investments. (4) In the event that Permitted Assets in the form of investments in the form of corporate bonds listed on a stock exchange as referred to in Article 5 paragraph (2) letter g are issued by a foreign legal entity where more than 50% (fifty percent) of its shares are owned by an Indonesian legal entity, they are categorized as domestic investments. (5) Permitted Assets in the form of investments in the form of corporate bonds as referred to in paragraph (3) and paragraph (4) must meet the following provisions:
a. have an investment grade rating from a securities rating company recognized by the Financial Services Authority or have an investment grade rating from a securities rating company recognized internationally; and b. be sold through a public offering.

Article 14
(1) The Company is prohibited from having foreign investments, except in the types of investments as referred to in Article 5 paragraph (3).
(2) The Company is prohibited from placing the entire foreign investment as referred to in Article 5 paragraph (3) letters a to e exceeding 20% (twenty percent) of the total investment amount. (3) In the event that the amount of foreign investment exceeds the limit as referred to in paragraph (2) due to an increase in the value of the investment, the Company is required to readjust the amount of investment according to the provisions as referred to in paragraph (2) within a maximum period of 3 (three) months from the time the increase in the value of the investment is known.

Article 15
(1) Restrictions on Permitted Assets in the form of investments as referred to in Article 5 paragraph (2) are as follows:
a. investments in the form of time deposits at Banks, including on-call deposits and deposits with a term of less than or equal to 1 (one) month, for each Bank at most 20% (twenty percent) of the total investment amount; b. investments in the form of time deposits at Rural Banks (BPR) and Sharia Rural Banks (BPR Syariah), for each BPR or Sharia BPR at most 1% (one percent) of the total investment amount and in total at most 5% (five percent) of the total investment amount;
c. investments in the form of deposit certificates for each Bank at most 50% (fifty percent) of the total investment amount in time deposits at each Bank as referred to in letter a;
d. investments in the form of securities issued by countries other than the Republic of Indonesia, for each issuer at most 10% (ten percent) of the total investment amount; e. investments in the form of corporate bonds listed on a stock exchange, for each issuer at most 20% (twenty percent) of the total investment amount and in total at most 50% (fifty percent) of the total investment amount; f. investments in the form of regional bonds, for each issuer at most 10% (ten percent) of the total investment amount and in total at most 20% (twenty percent) of the total investment amount; g. investments in the form of Corporate Bonds Without Public Offering (EBUS Tanpa Penawaran Umum) and securities issued by multinational institutions where the Republic of Indonesia is one of the members or shareholders, for each issuer at most 20% (twenty percent) of the total investment amount and in total at most 40% (forty percent) of the total investment amount; h. investments in the form of shares listed on a stock exchange, for each issuer at most 10% (ten percent) of the total investment amount and in total at most 40% (forty percent) of the total investment amount;
i. investments in the form of mutual funds for each Investment Manager at most 20% (twenty percent) of the total investment amount and in total at most 50% (fifty percent) of the total investment amount;
j. investments in the form of asset-backed securities for each Investment Manager at most 10% (ten percent) of the total investment amount and in total at most 20% (twenty percent) of the total investment amount; k. investments in the form of real estate investment funds in the form of collective investment contracts, for each Investment Manager at most 10% (ten percent) of the total investment amount and in total at most 20% (twenty percent) of the total investment amount;
l. investments in the form of infrastructure investment funds in the form of collective investment contracts, for each Investment Manager at most 10% (ten percent) of the total investment amount and in total at most 20% (twenty percent) of the total investment amount;
m. investments in the form of repurchase agreements (REPO), for each counterparty at most 2% (two percent) of the total investment amount and in total at most 10% (ten percent) of the total investment amount; n. investments in the form of land, buildings with strata rights (strata title), or land with buildings, for investment, in total at most 20% (twenty percent) of the total investment amount; o. investments in the form of land for investment, in total at most 1/3 (one third) of the total investment amount as referred to in letter n; p. investments in the form of pure gold, in total at most 10% (ten percent) of the total investment amount; and q. investments in the form of policy loans, with the amount of the policy loan at most 80% (eighty percent) of the cash value of the relevant policy. (2) Placements of Permitted Assets in the form of investments in the form of mutual funds as referred to in Article 5 paragraph (2) letter k, whose underlying assets are entirely securities issued by the Republic of Indonesia, are exempt from the provisions as referred to in paragraph (1) letter i. (3) Placements of Permitted Assets in the form of investments in the form of mutual funds as referred to in Article 5 paragraph (2) letter k in the form of limited participation collective investment contracts for each Investment Manager at most 10% (ten percent) of the total investment amount and in total at most 20% (twenty percent) of the total investment amount. (4) Placements of Permitted Assets in the form of investments as referred to in paragraph (1) letters d to m in total amount at most 80% (eighty percent) of the total investment amount. (5) Placements of Permitted Assets in the form of investments in the form of corporate bonds listed on a stock exchange as referred to in Article 5 paragraph (2) letter g, which are issued by institutions given special authority based on statutory regulations for the management of central government investments guaranteed by the central government, are not subject to:
a. the limits as referred to in paragraph (1) letter e and the limits as referred to in paragraph (4); and b. the requirements as referred to in Article 6 paragraph (2).
(6) Guarantees by the central government as referred to in paragraph (5) must meet the following provisions:
a. the guarantee is unconditional and irrevocable; and b. has a term at least equal to the term of the guaranteed corporate bond.

Article 16
(1) The maximum investment limit of the Company on assets other than Sub-funds is set as follows:
a. investments in Related Parties in total amounting to 10% (ten percent) of the Company's Equity; and b. investments in:

one Party that is not a Related Party; or
one Group of Investment Recipients that is not a Related Party,
amounting to 25% (twenty-five percent) of the total investment sourced from outside Sub-funds.
(2) In the event that the Company has a Sharia unit, the Company's Equity as referred to in paragraph (1) letter a does not include Equity in the Sharia unit.

Article 17
(1) Related Parties include:
a. individuals or companies that are controllers of the Company; b. legal entities where the Company acts as the controller of the legal entity;
c. companies that have the same controller as the Company;
d. members of the Board of Directors, members of the Board of Commissioners, or equivalents, and executive officials of the Company; e. parties having a family relationship due to marriage or descent up to the second degree, horizontally or vertically:
1. from individuals who are controllers of the Company as referred to in letter a; and/or
2. from members of the Board of Directors and/or members of the Board of Commissioners or equivalents at the Company as referred to in letter d;
f. members of the Board of Directors and/or members of the Board of Commissioners or equivalents at companies as referred to in letter a, letter b, and/or letter c; g. companies that have members of the Board of Directors and/or members of the Board of Commissioners or equivalents who are members of the Board of Commissioners or equivalents at the Company; h. companies where 50% (fifty percent) or more of the members of the Board of Directors and/or members of the Board of Commissioners or equivalents are directors and/or commissioners or equivalents at companies as referred to in letter a, letter b, and/or letter c;
i. companies that:
1. members of the Board of Directors, members of the Board of Commissioners, or equivalents and/or executive officials of the Company as referred to in letter d act as controllers; and
2. members of the Board of Directors and/or members of the Board of Commissioners or equivalents of parties as referred to in letter a, letter b, and/or letter c act as controllers;
j. companies that have financial relationships with the Company and/or parties as referred to in letters a to i; k. investment recipients in the form of individuals or companies that have financial relationships through providing guarantees to parties as referred to in letters a to j;
l. investment recipients that have financial relationships through guarantees provided by parties as referred to in letters a to j; and
m. other companies in which there is an interest in the form of share ownership of 10% (ten percent) or more individually or jointly, from parties as referred to in letter e.
(2) The determination of Related Parties for investment placements in the form of collective investment contracts is based on the underlying assets of the collective investment contract. (3) Controllers as referred to in paragraph (1) letter a are individuals or companies directly or indirectly:
a. own 10% (ten percent) or more of the Company's shares individually or jointly; b. hold options or other rights to own shares that if exercised cause the party to control and/or own 10% (ten percent) or more of the Company's shares individually or jointly;
c. cooperate or take concerted actions to achieve common goals in controlling the Company (acting in concert), with or without written agreements with other parties so that together they control and/or own 10% (ten percent) or more of the Company's shares;
d. cooperate or take concerted actions to achieve common goals in controlling the Company (acting in concert), with or without written agreements with other parties so that together they have options or other rights to own shares, which if exercised cause the party to control and/or own 10% (ten percent) or more of the Company's shares jointly; e. have the authority and/or ability to approve, appoint, and/or dismiss members of the Board of Commissioners and/or members of the Board of Directors of the Company; f. have the ability to determine (controlling influence) the strategic policies of the Company; g. control 1 (one) or more other companies that collectively own and/or control jointly 10% (ten percent) or more of the Company's shares; and/or h. exercise control over controllers as referred to in letters a and g. (4) Controllers as referred to in paragraph (1) letter b are Companies directly or indirectly:
a. own 10% (ten percent) or more of the shares of other companies individually or jointly; b. hold options or other rights to own shares that if exercised cause the party to control and/or own 10% (ten percent) or more of the shares of other companies individually or jointly;
c. cooperate or take concerted actions to achieve common goals in controlling other companies (acting in concert), with or without written agreements with other parties so that together they control and/or own 10% (ten percent) or more of the shares of other companies;
d. cooperate or take concerted actions to achieve common goals in controlling other companies (acting in concert), with or without written agreements with other parties so that together they have options or other rights to own shares, which if exercised cause the party to control and/or own 10% (ten percent) or more of the shares of other companies jointly; e. have the authority and/or ability to approve, appoint, and/or dismiss members of the Board of Commissioners and/or members of the Board of Directors of other companies; f. have the ability to determine (controlling influence) the strategic policies of other companies; g. control 1 (one) or more other companies that collectively own and/or control jointly 10% (ten percent) or more of the shares of other companies; and/or h. exercise control over controllers as referred to in letters a and g. (5) Controllers as referred to in paragraph (1) letters c and i are individuals or companies directly or indirectly:
a. own 10% (ten percent) or more of the shares of other companies and are the largest share ownership portion; b. individually or jointly own 25% (twenty-five percent) or more of the shares of other companies;
c. hold options or other rights to own shares that if exercised cause the party to control and/or own shares of other companies as referred to in letters a or b;
d. cooperate or take concerted actions to achieve common goals in controlling other companies (acting in concert), with or without written agreements with other parties so that together they control and/or own shares of other companies as referred to in letters a or b; e. cooperate or take concerted actions to achieve common goals in controlling other companies (acting in concert), with or without written agreements with other parties so that together they have options or other rights to own shares, which if exercised cause the party to control and/or own jointly shares of other companies as referred to in letters a or b; f. have the authority and/or ability to approve, appoint, and/or dismiss members of the Board of Commissioners and/or members of the Board of Directors of other companies; and/or g. have the ability to determine (controlling influence) the operational strategic policies or financial strategic policies of other companies. (6) Financial relationships as referred to in paragraph (1) letters j to l are excluded for:
a. the Company's investment placements in the form as referred to in Article 5 paragraph (2) letters a to o and letters q to s; b. the provision of guarantees by Insurance Companies, Sharia insurance companies, Reinsurance Companies, Sharia reinsurance companies, guarantee companies, and/or Sharia guarantee companies according to their business fields; and
c. the provision of guarantees by the central government.
(7) In the event that the Company places Permitted Assets in the form of investments in the form of mutual funds as referred to in Article 5 paragraph (2) letter k, the Company is required to meet the following Related Party provisions:
a. submit a list of Related Parties to the Investment Manager, if there are changes in Related Parties; b. obtain reports in the form of details of investments in Related Parties from the underlying assets of the Company's mutual funds periodically every 1 (one) month; and
c. calculate the underlying assets of the mutual funds that are Related Parties of the Company as a calculation of investments in Related Parties.
(8) The obligation to submit the list of Related Parties as referred to in paragraph (7) letter a is carried out for the first time within a maximum period of 3 (three) months after this Financial Services Authority Regulation takes effect.

Article 18
(1) Ownership, management, and/or financial relationships in Groups of Investment Recipients that are not Related Parties include:

a. the investment recipient is a controller of another investment recipient; b. the same party is a controller of several investment recipients;
c. 50% (fifty percent) of the board of directors members and/or members of the board of commissioners or equivalent of the investment recipient become members of the board of directors and/or members of the board of commissioners or equivalent of another investment recipient;
d. the investment recipient has a financial relationship with another investment recipient; and/or e. the same party provides a guarantee to take over and/or settle part or all of the obligations of several investment recipients in the event that the investment recipient fails to meet its obligations to creditors. (2) Controllers as referred to in paragraph (1) letter a and letter b are controllers as referred to in Article 17 paragraph (5). (3) The guarantee relationship as referred to in paragraph (1) letter e is excluded for:
a. the provision of guarantees by Insurance Companies, Sharia Insurance Companies, Guarantee Companies and/or Sharia Guarantee Companies in accordance with the business field of such companies; and b. the provision of guarantees by the central government.

Article 19
(1) Provisions regarding Related Parties as referred to in Article 17 paragraph (1) are excluded for control caused by direct ownership by the State of the Republic of Indonesia in the Company and other Parties. (2) Provisions regarding Investment Recipient Groups as referred to in Article 18 paragraph (1) are excluded for control caused by direct ownership by the State of the Republic of Indonesia in other Parties. (3) The calculation of the amount of investment in Related Parties as referred to in Article 16 paragraph (1) letter a is excluded for investment placements in the form of direct participation in limited liability companies whose shares are not listed on the stock exchange as referred to in Article 9. (4) The calculation of the amount of investment in Related Parties, one Party that is not a Related Party, and one Investment Recipient Group that is not a Related Party as referred to in Article 16 paragraph (1) is excluded for investment placements in the form of:
a. securities issued by the State of the Republic of Indonesia; b. securities issued by Bank Indonesia;
c. securities issued by an institution given special authority based on statutory regulations for the management of central government investments, guaranteed by the central government; and/or
d. mutual funds that have underlying assets entirely consisting of securities issued by the State of the Republic of Indonesia and/or securities issued by Bank Indonesia.
(5) Guarantees by the central government as referred to in paragraph (4) letter c must meet the following requirements:
a. the guarantee is unconditional and irrevocable; and b. it has a term at least equal to the term of the guaranteed securities.

Article 20
(1) Companies are prohibited from placing investments on assets from other than Sub-funds that cause violations of maximum investment limits on:
a. Related Parties; and/or b. one Party that is not a Related Party or one Investment Recipient Group that is not a Related Party, as referred to in Article 16 paragraph (1).
(2) The determination of violations of maximum investment limits on assets from other than Sub-funds as referred to in paragraph (1) is determined:
a. by the excess difference between the percentage of the value of investment in Related Parties at the time of investment placement against the Company's Equity in the latest monthly report before the investment placement, minus the percentage as referred to in Article 16 paragraph (1) letter a, for investment placements in Related Parties; and b. by the excess difference between the percentage of the value of investment in one Party that is not a Related Party or one Investment Recipient Group that is not a Related Party against total investments at the time of investment placement, minus the percentage as referred to in Article 16 paragraph (1) letter b, for investment placements in one Party that is not a Related Party or one Investment Recipient Group that is not a Related Party. (3) Investments on assets from other than Sub-funds in Related Parties, one Party that is not a Related Party, and/or one Investment Recipient Group that is not a Related Party that exceed the maximum investment limits as referred to in Article 16 paragraph (1) caused by:
a. a decrease in the Company's Equity; b. exchange rate changes;
c. changes in the fair value of assets;
d. business combinations, changes in ownership structure and/or changes in management structure that cause changes in Related Parties, one Party that is not a Related Party, or one Investment Recipient Group that is not a Related Party; and/or e. changes in statutory regulations, are categorized as exceeding maximum investment limits in Related Parties, one Party that is not a Related Party, and/or one Investment Recipient Group that is not a Related Party and are not violations of maximum investment limits as referred to in paragraph (1). (4) Exceeding maximum investment limits on assets from other than Sub-funds as referred to in paragraph (3) is calculated:
a. by the excess difference between the percentage of investment in Related Parties against the Company's Equity recorded on the date of the monthly report, minus the percentage as referred to in Article 16 paragraph (1) letter a, for investments in Related Parties; and b. by the excess difference between the percentage of investment in one Party that is not a Related Party or one Investment Recipient Group that is not a Related Party against total investments sourced from other than Sub-funds recorded on the date of the monthly report, minus the percentage as referred to in Article 16 paragraph (1) letter b, for investments in one Party that is not a Related Party or one Investment Recipient Group that is not a Related Party. (5) In the event that a Company violates maximum investment limits as referred to in paragraph (1), and/or exceeds maximum investment limits as referred to in paragraph (3), the nominal value of assets in the form of investments that exceed the maximum investment limits shall not be counted as Permitted Assets and the Company must:
a. submit an action plan for resolving violations of maximum investment limits and/or exceeding maximum investment limits to the Financial Services Authority; and b. resolve violations of maximum investment limits and/or exceeding maximum investment limits in accordance with the time targets set in the action plan as referred to in letter a.

Article 21
(1) The action plan as referred to in Article 20 paragraph (5) letter a must contain at least:
a. actions to be taken by the Company to resolve violations of maximum investment limits and time targets for resolution; and/or b. actions to be taken by the Company to resolve exceeding maximum investment limits and time targets for resolution. (2) The action plan as referred to in Article 20 paragraph (5) letter a must be submitted to the Financial Services Authority at the latest:
a. 1 (one) month since the Financial Services Authority determined that a violation of maximum investment limits as referred to in Article 20 paragraph (2) occurred; or b. 1 (one) month after the end of the reporting month for exceeding maximum investment limits caused by matters as referred to in Article 20 paragraph (3) letter a, letter b, letter c, and/or letter d. (3) Time targets for resolution as referred to in paragraph (1) are set for:
a. violations of maximum investment limits as referred to in Article 20 paragraph (1), at the latest 1 (one) month; b. exceeding investment limits in Related Parties, one Party that is not a Related Party, or in one Investment Recipient Group that is not a Related Party caused by matters as referred to in Article 20 paragraph (3) letter a, letter b, and/or letter c, at the latest 9 (nine) months; or
c. exceeding investment limits in Related Parties, one Party that is not a Related Party, or in one Investment Recipient Group that is not a Related Party caused by matters as referred to in Article 20 paragraph (3) letter d and/or letter e, at the latest 12 (twelve) months,
since the deadline for submitting the action plan to the Financial Services Authority.
(4) In the event that the time target for resolution of the action plan as referred to in paragraph (3) is assessed as unachievable, the Company, based on approval from the Financial Services Authority, may set a different time target for resolution of the action plan than the time target for resolution of the action plan as referred to in paragraph (3). (5) The Company must submit a report on the implementation of the action plan to the Financial Services Authority at the latest 7 (seven) working days after the time target for resolution of the action plan. (6) The report on the implementation of the action plan to the Financial Services Authority as referred to in paragraph (5) must contain at least information regarding the realization of steps contained in the action plan and the results or final status of resolving violations of maximum investment limits as referred to in paragraph (1) letter a and resolving exceeding investment limits as referred to in paragraph (1) letter b.

Article 22
(1) Companies are prohibited from carrying out any form of asset transfer to shareholders or Related Parties with the Company except through transactions that are arm's length.
(2) Companies are prohibited from providing loans to shareholders or Related Parties with the Company.
(3) The provisions prohibiting the transfer of assets to shareholders or Related Parties with the Company as referred to in paragraph (1) and the prohibition on providing loans to shareholders or Related Parties with the Company as referred to in paragraph (2) do not apply in the event of placements for Permitted Assets in the form of investments.

Article 23
The amount of investment used as the basis for calculating restrictions on Permitted Assets in the form of investments as referred to in Article 15 and maximum investment limits in one Party that is not a Related Party or in one Investment Recipient Group that is not a Related Party as referred to in Article 16 paragraph (1) letter b is the value of all investments as of the date of the financial position report.

Article 24
Provisions regarding restrictions on Permitted Assets in the form of investments as referred to in Article 15 also apply to placements in investment types that use Sharia principles.

Fourth Part
Permitted Assets in Non-Investment Form

Article 25
(1) Permitted Assets in non-investment form must be in the following types:
a. cash and bank; b. direct closing premium receivables, including co-insurance premium receivables that are part of the Company;
c. reinsurance premium receivables;
d. reinsurance assets; e. co-insurance claim receivables; f. reinsurance claim receivables; g. investment receivables; h. investment return receivables;
i. buildings with strata title or land with buildings, for own use;
j. deferred acquisition costs; and/or k. right-to-use assets.

(2) Restrictions on Permitted Assets in non-investment form as referred to in paragraph (1) must be carried out with the following provisions:
a. cash and bank, with the provision that cash and bank abroad permitted in total is at most 1% (one percent) of the Equity of the current period; b. direct closing premium receivables including co-insurance premium receivables that are part of the Company, with a receivable age of at most 2 (two) months calculated from the date:
1. coverage begins for policies with single premium payments; or
2. premium payment due date for policies with installment premium payments;
c. reinsurance premium receivables, with a receivable age of at most 2 (two) months calculated from the date of payment due;
d. reinsurance assets, consisting of:
1. assets sourced from the estimated value of claim recovery for the reinsurance portion; and
2. assets sourced from long-term contract agreements for capital-oriented reinsurance programs, with the provisions:
a) only for each new PAYDI whose acquisition costs are paid in advance by the Company (back-end loading); b) Companies that have already recognized assets arising from capital-oriented reinsurance program agreements for one PAYDI are not permitted to recognize deferred acquisition cost assets for the same PAYDI; and c) for each capital-oriented reinsurance program agreement, prior approval from the Financial Services Authority must be obtained; e. co-insurance claim receivables, with a receivable age of at most 2 (two) months calculated from the date of claim payment to the policyholder or insured; f. reinsurance claim receivables, with a receivable age of at most 2 (two) months calculated from the date of payment due; g. investment receivables, with a receivable age of at most 1 (one) month calculated from the date of payment due; h. investment return receivables, with a receivable age of at most 1 (one) month calculated from the date of payment due;
i. buildings with strata title or land with buildings, for own use, with a total value of at most 25% (twenty-five percent) of the Equity of the current period;
j. deferred acquisition costs, with the provisions:
1. carried out for PAYDIs whose acquisition costs are paid in advance by the Company (back-end loading);
2. Companies that have already recognized deferred acquisition cost assets for PAYDIs are not permitted to recognize assets arising from capital-oriented reinsurance program agreements for the same PAYDI product; and
3. each formation of deferred acquisition costs for each PAYDI product must first obtain approval from the Financial Services Authority; and/or
k. right-to-use assets can only be obtained from financial service institutions that have obtained business licenses from the Financial Services Authority.

(3) The valuation basis for each type of Permitted Asset in non-investment form as referred to in paragraph (1) refers to the applicable financial accounting standards for Companies in Indonesia. (4) Provisions regarding the procedure for applying for approval from the Financial Services Authority for each capital-oriented reinsurance program agreement as referred to in paragraph (2) letter d number 2 letter c) and the formation of deferred acquisition costs for PAYDIs as referred to in paragraph (2) letter j number 3 are established by the Financial Services Authority.

Fifth Part
Status of Permitted Assets

Article 26
Permitted Assets in investment form as referred to in Article 5 and Permitted Assets in non-investment form as referred to in Article 25 must:
a. be owned and controlled by the Company, proven by proof of ownership in the name of the Company from the competent authority; b. not be in dispute;
c. not be used as collateral; and
d. not be blocked by competent Parties.

Sixth Part
Liabilities

Article 27
(1) Liabilities calculated in the Solvency Ratio calculation must include all Company Liabilities, including:
a. technical reserves, for financial statements prepared based on insurance statutory regulations; or b. insurance contract liabilities, for financial statements prepared in accordance with applicable standards. (2) Companies must form technical reserves as referred to in paragraph (1) letter a in accordance with the type of insurance product, to meet the financial health requirements as referred to in Article 2 letter b. (3) The calculation of Liabilities as referred to in paragraph (1) is carried out by the Company's Actuary and the function specializing in financial reporting.

Article 28
(1) Liabilities in the form of technical reserves as referred to in Article 27 paragraph (1) letter a include:
a. premium reserves:

for products with a term of more than 1 (one) year whose policy terms and conditions are not renewable on each policy anniversary (non-renewable);
for products with a term of more than 1 (one) year whose policy terms and conditions are renewable on each policy anniversary (renewable) and provide other benefits after a certain period; and
for PAYDI;
b. reserves for premiums that are not yet revenue for products with a term of up to 1 (one) year or with a term of more than 1 (one) year whose policy terms and conditions are renewable on each policy anniversary (renewable);
c. claim reserves; and
d. catastrophic risk reserves.
(2) The formation of premium reserves as referred to in paragraph (1) letter a must take into account future receipts and expenditures that may occur using central estimate assumptions plus a risk margin. (3) The formation of reserves for premiums that are not yet revenue as referred to in paragraph (1) letter b must take into account reserves for all unexpired risks (unexpired risk reserve). (4) Premium reserves for PAYDIs as referred to in paragraph (1) letter a number 3 are:
a. fund accumulation reserves for non-guaranteed PAYDIs; b. reserves for the investment component for guaranteed PAYDIs; and
c. reserves for the protection component from PAYDIs and other benefits promised from PAYDIs.
(5) Fund accumulation reserves for non-guaranteed PAYDIs are not included in the Solvency Ratio calculation.
(6) Claim reserves as referred to in paragraph (1) letter c include:
a. claim reserves in the process of settlement; b. incurred but not reported (IBNR) claim reserves; and
c. claim reserves for claims that have been approved and benefit payments are not made in a lump sum.
(7) Catastrophic risk reserves as referred to in paragraph (1) letter d are calculated based on retained insurance benefits by taking into account the likelihood of disaster risks.

Article 29
(1) Insurance contract liabilities as referred to in Article 27 paragraph (1) letter b include:
a. insurance contract liabilities; b. reinsurance contract liabilities; and
c. PAYDI contract liabilities.
(2) Insurance contract liabilities as referred to in paragraph (1) letter a must contain at least the calculation of future cash flow estimates (fulfilment cash flow), risk adjustment, and contractual service margin. (3) Reinsurance contract liabilities as referred to in paragraph (1) letter b must contain at least the calculation of reinsurance contracts held and reinsurance contracts issued. (4) PAYDI contract liabilities as referred to in paragraph (1) letter c must contain at least the calculation of insurance benefit payment liabilities and investment value (unit value) to policyholders and/or insured parties.

Article 30
(1) In the event that unfairness is found in technical reserves and/or insurance contract liabilities or parts of technical reserves and/or insurance contract liabilities formed by the Company, the Financial Services Authority may:
a. request the Company to revalue the amount of technical reserves and/or insurance contract liabilities or parts of technical reserves and/or insurance contract liabilities deemed unfair; or b. request a review of technical reserves and/or insurance contract liabilities or parts of technical reserves and/or insurance contract liabilities by an independent Party at the Company's expense. (2) The Company must appoint an independent Party within a period of at most 1 (one) month after the request for a review as referred to in paragraph (1) letter b.

Article 31
Provisions regarding Liabilities calculated in the Solvency Ratio calculation as referred to in Article 27 paragraph (1) are established by the Financial Services Authority.

Seventh Part
Subordinated Loans

Article 32
In the calculation of the Solvency Ratio, subordinated loans are not treated as a Liability element if the loan meets the following provisions:
a. used to meet Solvency Ratio limit requirements; b. stipulated in a notarial agreement containing at least:

repayment of the loan principal is done if it does not cause the Company to fail to meet internal Solvency Ratio targets;
the loan repayment term is not limited; and
the promised interest rate is at most 1/5 (one fifth) of the Bank Indonesia interest rate at the time the agreement is signed; and
c. subordinated loans are provided in the form of cash deposits.

Article 33
Companies are prohibited from returning subordinated loans if such action causes the failure to meet internal Solvency Ratio target requirements as referred to in Article 3 paragraph (1) letter b and paragraph (2).

Eighth Part
Investment Sufficiency

Article 34
(1) Companies must have Permitted Assets in investment form as referred to in Article 5 paragraph (2) plus Permitted Assets in non-investment form in the form of cash and bank as referred to in Article 25 paragraph (1) letter a, at least equal to the amount of retained technical reserves, plus retained claim payment liabilities, and other liabilities to policyholders or insured parties. (2) Retained claim payment liabilities as referred to in paragraph (1) are liabilities for payments for claims that have been agreed upon but not yet paid, minus claim expenses that are part of the reinsurer.

Ninth Part
Fulfillment of Working Capital for Sharia Units by Companies

Article 35
In the event that the Sharia unit in the Company does not meet the following provisions:
a. provision of assets available for qardh to fulfill the Solvency Ratio for tabarru’ funds and tanahud funds; b. deposit of qardh for payment of Sharia insurance benefits/claims/benefits and fulfillment of the Solvency Ratio for tabarru’ funds and tanahud funds; and/or
c. fulfillment of the Solvency Ratio for company funds,
Companies with Sharia units must increase working capital in the Sharia unit to meet the provisions as referred to in letter a, letter b, and letter c.

Tenth Part
Administrative Sanctions

Article 36
(1) Violations of the provisions as referred to in Article 2, Article 3 paragraph (1), Article 4 paragraph (2), Article 5 paragraph (1), Article 9 paragraph (1), paragraph (5), Article 10 paragraph (1), paragraph (3), Article 14, Article 17 paragraph (7), Article 20 paragraph (1), paragraph (5), Article 21 paragraph (1), paragraph (2), paragraph (5), Article 22 paragraph (1), paragraph (2), Article 27 paragraph (1), paragraph (2), Article 28 paragraph (2), paragraph (3), Article 30 paragraph (2), Article 33, Article 34 paragraph (1), and/or Article 35 are subject to administrative sanctions in the form of:
a. written warnings; b. restrictions on business activities, for part or all of business activities;
c. prohibitions on marketing insurance products for specific business lines;

d. a decrease in the Company's health level; and/or

e. a prohibition on becoming a controller and shareholder, members of the Board of Directors, members of the Board of Commissioners, or equivalents of shareholders, members of the Board of Directors, and members of the Board of Commissioners in legal entities in the form of cooperatives or joint supervisory boards, or holding executive positions below the Board of Directors, or equivalents of executive positions below the Board of Directors in legal entities in the form of cooperatives or joint supervisory boards in insurance companies.

(2) In the event of a violation of the provisions as referred to in paragraph (1), but the violation has been rectified, the Financial Services Authority imposes a written warning sanction that expires automatically.

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority revokes the administrative sanction.

Article 37

Companies that violate the provisions of Article 9 paragraph (5) are subject to administrative sanctions as referred to in Article 36 paragraph (1) and an administrative fine of Rp100,000,000.00 (one hundred million rupiah).

Article 38

Regarding violations of the provisions as referred to in Article 36 paragraph (1) and Article 37, the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with Financial Services Authority Regulations regarding re-evaluation for principal parties of financial service institutions.

CHAPTER III

PAYDI

First Section

General Provisions

Article 39

(1) Insurance Companies marketing PAYDI must separate the recording and reporting of Sub-fund Assets and Liabilities from Assets and Liabilities other than Sub-funds.

(2) Insurance Companies are prohibited from transferring Sub-fund Assets and Liabilities to Assets and Liabilities other than Sub-funds, or vice versa.

(3) In the event that an Insurance Company establishes more than one (1) Sub-fund, the Insurance Company:

a. must perform separate recording of Sub-fund Assets and Liabilities as referred to in paragraph (1) for each Sub-fund established by the Insurance Company;

b. is prohibited from transferring Assets and Liabilities from one Sub-fund to another Sub-fund established by the Insurance Company; and

c. must manage premium portions intended to provide benefits referring to investment results, in accordance with the Sub-fund selected by the policyholder or insured.

(4) The prohibition on the transfer of Sub-fund Assets and Liabilities as referred to in paragraph (3) letter b is excepted for the transfer of Assets from one (1) Sub-fund to another Sub-fund conducted for the adjustment of the Sub-fund's investment portfolio that does not harm the policyholder or insured.

Article 40

(1) Companies may place Assets other than Sub-funds in the initial period of Sub-fund formation for the purpose of optimizing Sub-fund returns.

(2) Assets other than Sub-funds in the initial period of Sub-fund formation as referred to in paragraph (1) are recognized as Permitted Assets.

(3) In the event that a Company places Assets other than Sub-funds in the initial formation of a Sub-fund (seed money), the Company must have policies formulated in written guidelines containing at least:

a. the value of Assets other than Sub-funds that can be used for initial funds (seed money) considering the Company's liquidity needs;

b. the purpose of forming initial funds (seed money);

c. investment policies for initial funds (seed money) appropriate to the characteristics of funds using such initial funds (seed money);

d. policies for the reduction and termination of initial funds (seed money);

e. the duration for providing initial funds (seed money);

f. the mechanism for transferring Assets other than Sub-funds to funds formed by initial funds (seed money) and vice versa;

g. accounting and administrative policies for the management of initial funds (seed money); and

h. risk management for the management of initial funds (seed money).

(4) Funds recognized as Permitted Assets as referred to in paragraph (2) are calculated within the limits of Permitted Assets in the form of investments as referred to in Article 15 paragraph (1).

(5) The calculation as referred to in paragraph (4) is performed for each underlying Asset other than Sub-funds in the initial formation of a Sub-fund (seed money).

(6) The prohibition on the transfer of Sub-fund Assets and Liabilities as referred to in Article 39 paragraph (2) is excepted for the transfer back of Assets other than Sub-funds that have been placed in the initial formation of a Sub-fund as referred to in paragraph (1).

Article 41

(1) Sub-fund Assets in the form of investments are prohibited from being placed except in the following types:

a. time deposits at Banks, Rural Banks (BPR), and Sharia Rural Banks (BPR Syariah), including call deposits and time deposits with a duration of less than or equal to one (1) month;

b. deposit certificates at Banks;

c. securities issued by the Republic of Indonesia State;

d. securities issued by Bank Indonesia;

e. securities issued by countries other than the Republic of Indonesia;

f. securities issued by multinational institutions of which the Republic of Indonesia is a member or shareholder;

g. corporate bonds listed on the stock exchange;

h. regional bonds;

i. EBUS without public offering;

j. stocks listed on the stock exchange;

k. mutual funds;

l. asset-backed securities;

m. repurchase agreements (REPO); and/or

n. pure gold.

(2) Sub-fund Assets in the form of non-investments must be in the following types:

a. cash and bank;

b. direct closing premium receivables;

c. investment receivables; and/or

d. investment result receivables.

(3) The types of investments as referred to in paragraph (1) must be adjusted to the product descriptions reported to the Financial Services Authority and promised to prospective policyholders.

(4) Sub-fund Assets from PAYDI that are not guaranteed are not calculated as Permitted Assets.

(5) The basis for evaluating each type of Sub-fund Asset as investment assets as referred to in paragraph (1) and non-investment assets as referred to in paragraph (2) refers to the financial accounting standards applicable to Companies in Indonesia.

Article 42

Sub-fund Assets in the form of investments as referred to in Article 41 paragraph (1) and in the form of non-investments as referred to in Article 41 paragraph (2) must meet the following provisions:

a. placements of Permitted Assets in the form of investments as referred to in Article 6, Article 7, Article 12, and Article 13; and

b. Permitted Assets as referred to in Article 26.

Article 43

Sub-fund investment placements abroad by Companies must meet the following provisions:

a. conducted for PAYDI insurance policies denominated in foreign currency; and

b. at most 30% (thirty percent) of the total investments of all Sub-funds owned by the Company.

Article 44

(1) Investment placements of Assets from each Sub-fund must meet the following investment limits:

a. investments in Related Parties at most 10% (ten percent) of the total investment value of each respective Sub-fund; and

b. investments in:

one Party that is not a Related Party; or
one Group of Investment Recipients that is not a Related Party,

at most 25% (twenty-five percent) of the total investment value of each respective Sub-fund.

(2) Related Parties as referred to in paragraph (1) letter a are subject to the provisions of Related Parties as referred to in Article 17 and Article 19.

(3) Groups of Investment Recipients as referred to in paragraph (1) letter b are subject to the provisions of Groups of Investment Recipients as referred to in Article 18 and Article 19.

(4) In the event that Sub-fund investment Asset placements exceed the limits as referred to in paragraph (1), the Company must adjust the composition of such investment Assets to meet the limits as referred to in paragraph (1) at the latest:

a. 10 (ten) business days since the occurrence of the investment limit violation caused by transactions conducted by the Company; or

b. 90 (ninety) business days since the occurrence of the investment limit exceedance not caused by transactions conducted by the Company.

Article 45

(1) Companies must account for all Sub-fund Assets at Custodian Banks.

(2) Custodian Banks as referred to in paragraph (1) are prohibited from having Related Party relationships with the Company, except for Related Party relationships arising from the ownership or capital participation of the Republic of Indonesia State.

Second Section

Administrative Sanctions

Article 46

(1) Violations of the provisions as referred to in Article 39 paragraph (1), paragraph (2), paragraph (3), Article 40 paragraph (3), Article 41 paragraph (1), paragraph (3), Article 42, Article 43, Article 44 paragraph (1), paragraph (4), and/or Article 45 are subject to administrative sanctions in the form of:

a. written warnings;

b. restrictions on business activities, for part or all business activities;

c. prohibitions on marketing insurance products for specific business lines;

d. a decrease in the Company's health level; and/or

e. prohibitions on becoming controllers and shareholders, members of the Board of Directors, members of the Board of Commissioners, or equivalents of shareholders, members of the Board of Directors, and members of the Board of Commissioners in legal entities in the form of cooperatives or joint supervisory boards, or holding executive positions below the Board of Directors, or equivalents of executive positions below the Board of Directors in legal entities in the form of cooperatives or joint supervisory boards in insurance companies.

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority revokes the administrative sanction.

Article 47

Regarding violations of the provisions as referred to in Article 46 paragraph (1), the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with Financial Services Authority Regulations regarding re-evaluation for principal parties of financial service institutions.

CHAPTER IV

DERIVATIVE TRANSACTIONS

Article 48

(1) Companies are prohibited from conducting derivative transactions or holding derivative instruments, except:

a. put option contracts on stocks owned that are listed on the stock exchange in Indonesia;

b. derivative instruments obtained by the Company as instruments attached to securities issued by the Republic of Indonesia State as referred to in Article 5 paragraph (2) letter c, corporate bonds as referred to in Article 5 paragraph (2) letter g, or stocks as referred to in Article 5 paragraph (2) letter j listed on the stock exchange in Indonesia; or

c. other derivative instruments for hedging purposes against currency and/or interest rate risks.

(2) Transactions of other derivative instruments for hedging purposes as referred to in paragraph (1) letter c are conducted with counterparties that have at least an investment grade rating from securities rating companies recognized by the Financial Services Authority or from securities rating companies recognized internationally.

(3) Companies may sell derivative instruments attached to stocks, corporate bonds, or state securities listed on the stock exchange in Indonesia as referred to in paragraph (1) letter b separately from the state securities, corporate bonds, or stocks listed on the respective stock exchanges.

(4) Derivative transactions or derivative instruments as referred to in paragraph (1) must receive approval from the Board of Directors or equivalents.

(5) Assets arising from derivative transactions or derivative instruments as referred to in paragraph (1) are recognized as Permitted Assets.

Article 49

(1) Companies must report every derivative transaction as referred to in Article 48 paragraph (1) to the Financial Services Authority within a maximum period of 7 (seven) business days since the transaction date.

(2) Derivative transaction reports as referred to in paragraph (1) must be accompanied by at least:

a. study/analysis results regarding the necessity of hedging;

b. derivative transaction agreements;

c. evidence of the rating of other Parties (counterparties) as referred to in Article 48 paragraph (2); and

d. evidence of Board of Directors or equivalents' approval.

Article 50

(1) Violations of the provisions as referred to in Article 48 paragraph (1), paragraph (4), and/or Article 49 paragraph (1) are subject to administrative sanctions in the form of:

a. written warnings;

b. restrictions on business activities, for part or all business activities;

c. prohibitions on marketing insurance products for specific business lines;

d. a decrease in the Company's health level; and/or

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority revokes the administrative sanction.

Article 51

Regarding violations of the provisions as referred to in Article 50 paragraph (1), the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with Financial Services Authority Regulations regarding re-evaluation for principal parties of financial service institutions.

CHAPTER V

PROHIBITION ON DIVIDEND PAYMENTS

Article 52

(1) Companies are prohibited from paying dividends or providing remuneration in any form to shareholders or equivalents if:

a. it causes the Company's Equity amount to fall below the minimum Equity requirements as regulated in Financial Services Authority Regulations regarding business licensing and institutional structure of Insurance Companies, Reinsurance Companies, Sharia Insurance Companies, and Sharia Reinsurance Companies; and/or

b. it causes the failure to achieve internal Solvency Targets as referred to in Article 3 paragraph (1) letter b and paragraph (2).

(2) The payment of dividends or provision of remuneration in any form to shareholders or equivalents must be conducted in accordance with statutory regulations.

Article 53

(1) Violations of the provisions as referred to in Article 52 are subject to administrative sanctions in the form of:

a. written warnings;

b. restrictions on business activities, for part or all business activities;

c. prohibitions on marketing insurance products for specific business lines;

d. a decrease in the Company's health level; and/or

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority revokes the administrative sanction.

Article 54

Regarding violations of the provisions as referred to in Article 53 paragraph (1), the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with Financial Services Authority Regulations regarding re-evaluation for principal parties of financial service institutions.

CHAPTER VI

GUARANTEE FUNDS

First Section

Formation of Guarantee Funds

Article 55

(1) Companies must form Guarantee Funds of at least 20% (twenty percent) of the minimum Equity as required in Financial Services Authority Regulations regarding business licensing and institutional structure of Insurance Companies, Reinsurance Companies, Sharia Insurance Companies, and Sharia Reinsurance Companies.

(2) The amount of Guarantee Funds as referred to in paragraph (1) is adjusted according to the development of the Company's business activities with the following provisions:

a. for Life Insurance Companies, Guarantee Funds must be formed at 2% (two percent) of reserves for PAYDI plus 5% (five percent) of premium reserves for products other than PAYDI and reserves for premiums that are not yet revenue; and

b. for General Insurance Companies and Reinsurance Companies, Guarantee Funds must be formed at 1% (one percent) of Net Premiums plus 0.25% (zero point two five percent) of reinsurance premiums plus 2% (two percent) of reserves for PAYDI.

(3) In the event that the amount of Guarantee Fund formation as referred to in paragraph (1) is smaller than the amount of Guarantee Funds as referred to in paragraph (2), the Company must form Guarantee Funds at the amount of Guarantee Funds as referred to in paragraph (2).

Article 56

(1) The amount of premium reserves including reserves for premiums that are not yet revenue as referred to in Article 55 paragraph (2) letter a, as well as Net Premiums and reinsurance premiums as referred to in Article 55 paragraph (2) letter b, are obtained from annual financial reports as of the last December 31 based on statutory regulations in the insurance sector.

(2) In the event that Guarantee Funds are less than the amount as referred to in Article 55 paragraph (3), the Company must add its owned Guarantee Funds within a maximum period of 5 (five) business days after April 30 of the current year.

(3) In the event that owned Guarantee Funds are greater than the amount as referred to in Article 55 paragraph (3), the Company may reduce its owned Guarantee Funds after first obtaining approval from the Financial Services Authority.

(4) Guarantee Funds as referred to in Article 55 paragraph (1) and paragraph (2) must be placed in the following types:

a. deposits, with automatic renewal at Banks that are not Related Parties of the Company; and/or

b. securities issued by the Republic of Indonesia State, which at the time of placement as Guarantee Funds have a maturity of at least 1 (one) year.

(5) Guarantee Funds as referred to in Article 55 paragraph (1) and paragraph (2) are prohibited from being pledged or encumbered with any rights.

Second Section

Accounting of Guarantee Funds

Article 57

(1) Companies must account for all Guarantee Funds at Custodian Banks.

(2) Custodian Banks as referred to in paragraph (1) are not Related Parties of the Company, except for Related Party relationships arising from the ownership or capital participation of the Republic of Indonesia State.

Article 58

The accounting of Guarantee Funds at Custodian Banks as referred to in Article 57 paragraph (1) must be based on agreements between the Company and Custodian Banks containing at least:

a. delegation or authorization by the Company to Custodian Banks to withdraw, transfer, or deliver Guarantee Funds after obtaining approval from the Financial Services Authority;

b. the obligation of Custodian Banks to place funds obtained from the withdrawal of Guarantee Funds in the form of securities issued by the Republic of Indonesia State that have matured into one (1) month time deposits at Banks in the Company's name, in the event that the Company has not yet replaced the aforementioned matured Guarantee Funds; and

c. provisions that Custodian Banks cannot execute instructions from the Company or other Parties to withdraw, transfer, and deliver deposits or securities issued by the Republic of Indonesia State used as Guarantee Funds unless approval from the Financial Services Authority has been obtained.

Third Section

Changes to Guarantee Funds

Article 59

(1) Companies may make changes to Guarantee Funds in the form of formation, addition, replacement, transfer, and/or withdrawal of Guarantee Funds.

(2) The formation or addition of Guarantee Funds may be conducted with the following provisions:

a. new placements of deposits at Banks and/or securities issued by the Republic of Indonesia State as Guarantee Funds;

b. placements of deposits at Banks that were originally not Guarantee Funds becoming Guarantee Funds; and/or

c. placements of securities issued by the Republic of Indonesia State that were originally not Guarantee Funds becoming Guarantee Funds.

(3) Companies may conduct the transfer or replacement of Guarantee Funds with the following provisions:

a. from deposits to securities issued by the Republic of Indonesia State or vice versa;

b. changing the duration of deposits at Banks;

c. changing the Bank where deposits are placed; and/or

d. exchanging securities issued by the Republic of Indonesia State with other securities issued by the Republic of Indonesia State.

(4) In the event that Companies will conduct the transfer or replacement of Guarantee Funds as referred to in paragraph (3), Companies must first place replacement Guarantee Funds of at least the value of the Guarantee Funds to be transferred or replaced.

(5) In the event that there are Guarantee Funds in the form of securities issued by the Republic of Indonesia State that will mature, Companies must first place new Guarantee Funds of at least the value of the aforementioned securities issued by the Republic of Indonesia State that will mature, at the latest 1 (one) day before the maturity date.

(6) Companies may withdraw Guarantee Funds in the event that the amount of Guarantee Funds exceeds the minimum amount required as referred to in Article 55 paragraph (3).

(7) The amount of Guarantee Funds that can be withdrawn as referred to in paragraph (6) is the excess over the minimum amount required as referred to in Article 55 paragraph (3).

(8) Companies are prohibited from transferring or withdrawing Guarantee Funds unless approval from the Financial Services Authority has been obtained.

(9) The transfer or withdrawal of Guarantee Funds is conducted by submitting application documents containing at least:

a. reasons for the transfer or withdrawal of Guarantee Funds;

b. Board of Directors or equivalents' approval for the transfer or withdrawal of Guarantee Funds; and

c. supporting documents proving the reasons for the transfer or withdrawal of Guarantee Funds.

Article 60

To fulfill the Guarantee Fund provisions as referred to in Article 55 paragraph (1), paragraph (2), and Article 59, Guarantee Funds in the form of securities issued by the Republic of Indonesia State are valued based on fair market value.

Article 61

(1) The Financial Services Authority may order Companies to increase the amount of Guarantee Funds of at most the amount of technical reserves, in the event that:

a. Companies cannot meet the provisions regarding Solvency Targets as referred to in Article 3 paragraph (1); and

b. Companies are subject to administrative sanctions restricting business activities.

(2) The Company is required to increase the amount of the Guarantee Fund as referred to in paragraph (1) within a maximum period of 1 (one) month from the date of the order to increase the amount of the Guarantee Fund.

Fourth Section
Administrative Sanctions

Article 62
(1) Violations of the provisions as referred to in Article 55, Article 56 paragraph (2), paragraph (4), paragraph (5), Article 57 paragraph (1), Article 58, Article 59 paragraph (4), paragraph (5), paragraph (8), and/or Article 61 paragraph (2) shall be subject to administrative sanctions in the form of:
a. written warning; b. restriction on business activities, for part or all of the business activities;
c. prohibition on marketing insurance products for specific business lines;
d. downgrade of the Company's health level; and/or e. prohibition on becoming a controller and shareholder, member of the board of directors, member of the board of commissioners, or equivalent to shareholders, members of the board of directors, and members of the board of commissioners in a legal entity in the form of a cooperative or joint venture, sharia supervisory board, or holding an executive position below the board of directors, or equivalent to an executive position below the board of directors in a legal entity in the form of a cooperative or joint venture, in an insurance company.

(2) In the event of a violation of the provisions as referred to in paragraph (1) but the violation has been corrected, the Financial Services Authority shall impose a written warning sanction that expires automatically.

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority shall revoke the administrative sanction.

Article 63
In the event of a violation of the provisions as referred to in Article 62 paragraph (1), the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER VII
SEPARATION OF ASSETS AND LIABILITIES

Article 64
(1) Assets and Liabilities related to the rights of policyholders or insured parties must be separated from other Assets and Liabilities of the Company.

(2) The separation of Assets and Liabilities as referred to in paragraph (1) consists of Insurance Funds and Company funds.

(3) The separation of Assets and Liabilities as referred to in paragraph (2) must be disclosed in the Company's financial reports.

(4) Provisions regarding the disclosure of the separation of Assets and Liabilities in the Company's financial reports as referred to in paragraph (3) shall be determined by the Financial Services Authority.

Article 65
(1) The Company must maintain Permitted Assets in the Insurance Fund with a value of at least equal to the Insurance Fund Liabilities.

(2) The Insurance Fund Liabilities as referred to in paragraph (1) consist of technical reserves, claim payables, co-insurance payables, reinsurance payables, and other Liabilities to policyholders or insured parties.

Article 66
(1) Violations of the provisions as referred to in Article 64 paragraph (1) and/or paragraph (3) shall be subject to administrative sanctions in the form of:
a. written warning; b. restriction on business activities, for part or all of the business activities;
c. prohibition on marketing insurance products for specific business lines;
d. downgrade of the Company's health level; and/or e. prohibition on becoming a controller and shareholder, member of the board of directors, member of the board of commissioners, or equivalent to shareholders, members of the board of directors, and members of the board of commissioners in a legal entity in the form of a cooperative or joint venture, sharia supervisory board, or holding an executive position below the board of directors, or equivalent to an executive position below the board of directors in a legal entity in the form of a cooperative or joint venture, in an insurance company.

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority shall revoke the administrative sanction.

Article 67
In the event of a violation of the provisions as referred to in Article 66 paragraph (1), the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER VIII
SUBMISSION OF PERIODIC REPORTS

First Section
Preparation of Reports

Article 68
(1) The Company is required to prepare:
a. annual financial reports for the period from January 1 to December 31 based on applicable accounting standards in Indonesia; b. annual financial reports for the period from January 1 to December 31 based on provisions of legislation in the field of insurance;
c. quarterly reports for the period from January 1 to the end of the relevant quarter based on applicable accounting standards in Indonesia;
d. monthly reports for the period from the 1st to the end of the current month; and e. annual actuarial reports for the period from January 1 to December 31.

(2) The annual financial reports as referred to in paragraph (1) letter a must be audited by a public accountant registered with the Financial Services Authority.

(3) The annual financial reports as referred to in paragraph (1) letter a must receive approval from the General Meeting of Shareholders no later than 6 (six) months after the end of the fiscal year.

(4) The approval of the General Meeting of Shareholders as referred to in paragraph (3) shall be recorded in the form of an approval deed.

(5) The approval deed as referred to in paragraph (4) must be submitted to the Financial Services Authority no later than 15 (fifteen) working days after the approval of the General Meeting of Shareholders.

(6) In the event that the public accountant provides a management letter to the Company, the annual financial report must be accompanied by the management letter.

(7) The annual financial reports as referred to in paragraph (1) letter b must be reviewed and assessed for compliance with provisions of legislation in the field of financial health of insurance companies by the Company's Actuary or a public accountant registered with the Financial Services Authority.

(8) The annual actuarial report as referred to in paragraph (1) letter e is a report that describes the Company's estimated ability to meet its future obligations.

(9) The annual actuarial report as referred to in paragraph (1) letter e must be signed by the Company's Actuary.

(10) The annual actuarial report as referred to in paragraph (1) letter e must be reviewed and assessed for the fairness of its presentation by an actuarial consultant registered with the Financial Services Authority at least 1 (one) time in 3 (three) years.

(11) Provisions regarding the form and structure of reports as referred to in paragraph (1) letters b through e shall be determined by the Financial Services Authority.

Article 69
(1) The Company must have and maintain a detailed list of Related Parties as referred to in Article 17 and Groups of Investment Recipients who are not Related Parties as referred to in Article 18, for:
a. investments in assets other than Sub-funds as referred to in Article 16 paragraph (1); and b. investments in Sub-fund assets as referred to in Article 44 paragraph (1).

(2) The detailed list of Related Parties as referred to in paragraph (1) must contain at least the name of the Related Party and the relationship between the Related Party and the Company.

(3) The detailed list of Groups of Investment Recipients as referred to in paragraph (1) must contain at least the name of the Party, the name of the Group of Investment Recipients who are not Related Parties, and the relationship between the Party and other Parties in the Group of Investment Recipients who are not Related Parties.

(4) The Company is required to submit to the Financial Services Authority:
a. reports on the detailed list of Related Parties and Groups of Investment Recipients who are not Related Parties receiving investments in Sub-fund and non-Sub-fund assets; b. reports on investment placements in:

Related Parties;
one Party who is not a Related Party; and
one Group of Investment Recipients who are not Related Parties,
receiving investments from non-Sub-funds; and
c. reports on investment placements in Related Parties, one Party who is not a Related Party, and one Group of Investment Recipients who are not Related Parties receiving investments from Sub-funds.

(5) The reports as referred to in paragraph (4) must be submitted:
a. every month as part of the monthly report as referred to in Article 68 paragraph (1) letter d; or b. according to the deadline requested by the Financial Services Authority if the Financial Services Authority requests the Company to submit such reports.

Article 70
For Companies that conduct part of their business using sharia principles, the reports as referred to in Article 68 paragraph (1) letters b through d do not include reports related to the sharia units of the respective Company.

Article 71
In the reports as referred to in Article 68 paragraph (1), every Asset and Liability in foreign currency units must be presented in rupiah based on the middle exchange rate set by Bank Indonesia on the date of the report.

Second Section
Submission of Reports

Article 72
Provisions regarding the procedures for submitting reports as referred to in Article 68 shall be determined by the Financial Services Authority.

Third Section
Publication of Reports

Article 73
(1) The Company is required to publish a summary of the audited annual financial report as referred to in Article 68 paragraph (2) on the Company's website and in a daily newspaper in Indonesian circulating nationally within a maximum period of 1 (one) month after the deadline for submission of the annual financial report as regulated in provisions of legislation in the field of insurance, containing at least:
a. financial position; b. financial performance; and
c. financial health condition.

(2) Evidence of publication as referred to in paragraph (1) must be submitted to the Financial Services Authority within a maximum period of 2 (two) working days after the publication in the newspaper.

(3) The Company is required to publish a summary of the monthly report as referred to in Article 68 paragraph (1) letter d on the Company's website within a maximum period of 10 (ten) working days after the end of the relevant month.

(4) Provisions regarding the form and structure of the summary of the annual financial report as referred to in paragraph (1) shall be determined by the Financial Services Authority.

Article 74
In the event that there are parts that need to be corrected in the report as published as referred to in Article 73 paragraph (1) and paragraph (3), the Company is required to correct the report and republish it on the Company's website.

Fourth Section
Administrative Sanctions

Article 75
(1) Violations of the provisions as referred to in Article 68 paragraph (1), paragraph (2), paragraph (3), paragraph (5), paragraph (6), paragraph (7), paragraph (10), Article 69 paragraph (1), paragraph (4), paragraph (5), Article 71, Article 73 paragraph (1), paragraph (2), paragraph (3), and/or Article 74, shall be subject to administrative sanctions in the form of:
a. written warning; b. restriction on business activities, for part or all of the business activities;
c. prohibition on marketing insurance products for specific business lines;
d. downgrade of the Company's health level; and/or e. prohibition on becoming a controller and shareholder, member of the board of directors, member of the board of commissioners, or equivalent to shareholders, members of the board of directors, and members of the board of commissioners in a legal entity in the form of a cooperative or joint venture, sharia supervisory board, or holding an executive position below the board of directors, or equivalent to an executive position below the board of directors in a legal entity in the form of a cooperative or joint venture, in an insurance company.

(3) In the event that violations of the provisions as referred to in paragraph (1) letters a, b, and c have been fulfilled, the Financial Services Authority shall revoke the administrative sanction.

Article 76
Companies that violate the provisions of Article 73 paragraph (1) shall be subject to administrative sanctions as referred to in Article 75 paragraph (1) and an administrative fine of IDR 2,500,000.00 (two million five hundred thousand rupiah) per day and a maximum of IDR 50,000,000.00 (fifty million rupiah).

Article 77
In the event of a violation of the provisions as referred to in Article 75 paragraph (1) and Article 76, the Financial Services Authority may conduct a re-evaluation of the Company's principal parties in accordance with the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions.

CHAPTER IX
CONSUMER PROTECTION

Article 78
(1) The Company implements consumer and community protection in accordance with provisions of legislation regarding consumer and community protection in the financial service sector.

(2) The mechanism and procedures for implementing the principles of consumer and community protection as referred to in paragraph (1) shall be carried out in accordance with the Financial Services Authority Regulation regarding consumer and community protection in the financial service sector.

CHAPTER X
OTHER PROVISIONS

Article 79
The Financial Services Authority may provide approval or policies different from this Financial Services Authority Regulation based on certain considerations.

CHAPTER XI
TRANSITIONAL PROVISIONS

Article 80
(1) Upon the implementation of this Financial Services Authority Regulation, Companies that already have placements of Permitted Assets in the form of direct equity investments as referred to in Article 5 paragraph (2) letter p but have not yet met the provisions:
a. placements of Permitted Assets in the form of direct equity investments in limited liability companies whose shares are not listed on the stock exchange as referred to in Article 9 paragraph (1); and/or b. maximum limits for total placements of investments in the form of direct equity investments in limited liability companies whose shares are not listed on the stock exchange as referred to in Article 9 paragraph (2), must adjust to the provisions in this Financial Services Authority Regulation within a maximum period of 2 (two) years from the implementation of this Financial Services Authority Regulation.

(2) During the adjustment period as referred to in paragraph (1), investment placements in the form of direct equity investments that do not comply with the provisions in Article 9 paragraph (1) and paragraph (2) shall still be recognized as Permitted Assets.

(3) In the event that the Company does not meet the provisions within the period as referred to in paragraph (1):
a. investment placements in the form of direct equity investments that do not comply with the provisions in Article 9 paragraph (1), all investments shall not be recognized as Permitted Assets; and/or b. investment placements exceeding the maximum limits for total investment placements as referred to in Article 9 paragraph (2), the excess investments shall not be recognized as Permitted Assets, and shall not be subject to administrative sanctions for violations of obligations as referred to in Article 9 paragraph (1) and paragraph (2).

Article 81
Upon the implementation of this Financial Services Authority Regulation, placements of Permitted Assets in the form of investments through financing mechanisms in cooperation with other Parties in the form of credit provision cooperation (executing) that existed before this Financial Services Authority Regulation was implemented, shall be recognized as Permitted Assets until the end of the cooperation agreement period.

Article 82
Violations of Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies as last amended by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies, which are known since this Financial Services Authority Regulation is implemented, shall be subject to administrative sanctions based on the provisions in Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies as last amended by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies.

Article 83
Provisions regarding Minimum Equity as regulated in Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies as last amended by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies, are declared to remain in force until December 31, 2026.

CHAPTER XII
CLOSING PROVISIONS

Article 84
Placements of Permitted Assets in the form of investments in medium-term notes that existed before this Financial Services Authority Regulation was implemented, must be understood as Private Placements without General Offering as long as they do not conflict with this Financial Services Authority Regulation.

Article 85
Upon the implementation of this Financial Services Authority Regulation, all implementation provisions of Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies (State Gazette of the Republic of Indonesia Year 2016 Number 304, Supplement to the State Gazette of the Republic of Indonesia 5994) as last amended several times by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies (State Gazette of the Republic of Indonesia Year 2023 Number 8, Supplement to the State Gazette of the Republic of Indonesia 33), are declared to remain in force as long as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 86
Upon the implementation of this Financial Services Authority Regulation, Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies (State Gazette of the Republic of Indonesia Year 2016 Number 304, Supplement to the State Gazette of the Republic of Indonesia 5994) as last amended several times by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies (State Gazette of the Republic of Indonesia Year 2023 Number 8, Supplement to the State Gazette of the Republic of Indonesia 33), is repealed and declared invalid.

Article 87
This Financial Services Authority Regulation shall come into force upon being promulgated.

In order that everyone may know it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta on November 10, 2025

THE CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA,

MAHENDRA SIREGAR

Promulgated in Jakarta on the date of

THE MINISTER OF LAW OF THE REPUBLIC OF INDONESIA,

SUPRATMAN ANDI AGTAS

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2025 NUMBER

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 26 OF 2025
CONCERNING
ASSET AND LIABILITY MANAGEMENT OF INSURANCE AND REINSURANCE COMPANIES

I. GENERAL
Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies, which has been amended several times, lastly by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies, serves as the legal basis for the Financial Services Authority in assessing the financial health of Insurance and Reinsurance Companies.

This Financial Services Authority Regulation serves as a guideline for Companies to apply the principle of prudence in implementing risk management related to investment placements and maintaining financial health.

Under current provisions, there is no distinction in investment limits between Company assets within the framework of risk management and PAYDI Sub-fund assets for the purpose of portfolio investment diversification, placements in Related Parties and non-Related Parties, and optimization of investment returns for policyholders. Therefore, it is necessary to adjust the provisions on direct equity investments for Company assets and adjust the provisions on investments in Related Parties, including for PAYDI Sub-funds. Considering current conditions, there has been a decrease in PAYDI Sub-fund investments in mutual funds, necessitating adjustments in regulations to provide the best performance for PAYDI policyholders.

Furthermore, to avoid multiple interpretations regarding provisions on assessing the financial health level of Companies, it is necessary to adjust the title of Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies, which has been amended several times, lastly by Financial Services Authority Regulation Number 5 of 2023 concerning the Second Amendment to Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Health of Insurance and Reinsurance Companies, to better reflect the substance regulated.

Considering the above conditions, the Financial Services Authority needs to establish a Financial Services Authority Regulation concerning Asset and Liability Management of Insurance and Reinsurance Companies, which regulates provisions including investment placements, specifically direct equity investment provisions, Related Party investments for PAYDI Sub-funds, PAYDI Sub-fund investments in mutual funds, Solvency Ratio, Liability calculations, and Guarantee Funds.

II. ARTICLE BY ARTICLE

Article 1
It is clear enough.

Article 2
It is clear enough.

Article 3
Paragraph (1)
Letter a
It is clear enough.

Letter b
The Company's risk profile considers among other things geographical location, the Company's products, business plans, and claim experience in measuring the risk profile and considers scenario changes (stress test). Additionally, the Company may consider other risks that may arise, including those originating from changes in strategy and/or business development plans of the Company.

Paragraph (2)
It is clear enough.

Paragraph (3)
It is clear enough.

Article 4
Paragraph (1)
Credit risk, liquidity risk, market risk, insurance risk, and operational risk refer to provisions regarding the assessment of the health level for Companies.

Paragraph (2)
The term "certain percentage" refers to a percentage that reflects the risk of Sub-fund management.

Paragraph (3)
It is clear enough.

Article 5
Paragraph (1)
The term "principle of prudence" refers to investment placements that consider security, optimal returns, liquidity needs, and the Company's Liability profile.

Paragraph (2)
Letter a
It is clear enough.

Letter b
The term "deposit certificates" refers to deposits in the form of deposits where the certificate of deposit evidence can be transferred.

Letter c
It is clear enough.

Letter d
Clearly stated.
Letter e
Clearly stated.
. Letter f
Clearly stated.
Letter g
The term "corporate bonds" refers to bonds issued by business entities, including institutions granted special authority to manage central government investments in accordance with applicable legislation. Letter h The term "regional bonds" refers to regional loans offered to the public through a public offering in the capital market in accordance with legislation regarding regional loans. Letter i Clearly stated. Letter j Clearly stated. Letter k Clearly stated. Letter l Clearly stated. Letter m Clearly stated. Letter n The term "collective investment contract infrastructure investment fund" refers to a container in the form of a collective investment contract used to raise funds from investor public, which are then largely invested in infrastructure assets by the Investment Manager. Letter o Clearly stated. Letter p Clearly stated. Letter q Clearly stated. Letter r Clearly stated. Letter s The term "policy loan" refers to loans provided to policyholders on insurance policies that have a cash value. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated. Paragraph (5) Clearly stated. Paragraph (6) Clearly stated.

Article 6
Paragraph (1)
Clearly stated.
Paragraph (2)
The term "investment grade" refers to the eligibility given to investment types issued by companies that have received a rating from an agency recognized by the Financial Services Authority or equivalent to BBB. Paragraph (3) Clearly stated. Paragraph (4) Clearly stated. Paragraph (5) Letter a Mutual funds offered through a public offering include:
1. money market mutual funds, fixed income mutual funds, mixed mutual funds, and equity mutual funds;
2. mutual funds traded on the Indonesia Stock Exchange (Exchange Traded Fund/ETF) including underlying securities and non-securities in accordance with Financial Services Authority regulations in the capital market sector;
3. mutual funds offered through a public offering for a limited period, including protected mutual funds, guaranteed mutual funds, and index mutual funds; and
4. limited participation mutual funds offered through a public offering.
Letter b
Clearly stated.
Paragraph (6)
Clearly stated.
Paragraph (7)
Clearly stated.
Paragraph (8)
Clearly stated.
Paragraph (9)
Clearly stated.
Paragraph (10)
Clearly stated.
Article 7
Clearly stated.
Article 8
Clearly stated.
Article 9
Paragraph (1)
Violations of these provisions result in investment placements not being counted as Permissible Assets.
Letter a
The term "financial services institution" refers to:
1. financial services institutions in accordance with the Law on the Financial Services Authority; or
2. institutions that:
a. based on provisions or statements from the competent authority are financial services institutions; and b. their business activities can be equated with the business activities of financial services institutions in accordance with the Law on the Financial Services Authority, for companies located outside the territory of Indonesia. Letter b The use of information technology is carried out to produce financial products only or accompanied by financial transaction facilities. Example: payment system organizer service companies. Letter c Companies supporting the main business activities of insurance companies include companies providing services to support:
a. insurance product development; b. risk selection process (underwriting);
c. insurance product marketing; and
d. claim handling.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Article 10
Clearly stated.
Article 11
Clearly stated.
Article 12
Clearly stated.
Article 13
Clearly stated.
Article 14
Clearly stated.
Article 15
Paragraph (1)
Permissible Assets in the form of securities issued by the Republic of Indonesia or Bank Indonesia are not subject to investment limits, so they can all be counted as Permissible Assets.

Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Example of applying the investment limit for deposit certificates:
An Insurance Company has a time deposit at Bank A amounting to Rp 10,000,000,000.00 and at Bank B amounting to Rp 30,000,000,000.00, then the Insurance Company can only hold investments in the form of deposit certificates as follows:
a. at most Rp 5,000,000,000.00 (50% x Rp 10,000,000,000.00) at Bank A b. at most Rp 15,000,000,000.00 (50% x Rp 30,000,000,000.00) at Bank B.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
Clearly stated.
Letter g
Clearly stated.
Letter h
Clearly stated.
Letter i
Clearly stated.
Letter j
Clearly stated.
Letter k
Clearly stated.
Letter l
Clearly stated.
Letter m
Clearly stated.
Letter n
Clearly stated.
Letter o
Clearly stated.
Letter p
Clearly stated.
Letter q
Clearly stated.
Paragraph (2)
The term "mutual funds having underlying assets entirely consisting of securities issued by the Republic of Indonesia and/or securities issued by Bank Indonesia" refers to mutual funds whose underlying assets consist of securities issued by the Republic of Indonesia and/or securities issued by Bank Indonesia amounting to at least 80% (eighty percent) of the net asset value, referring to applicable capital market legislation. Paragraph (3) Clearly stated.

Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Paragraph (6)
Clearly stated.
Article 16
Paragraph (1)
Letter a
Clearly stated.
Letter b
Example:
PT Insurance Y has total investments amounting to Rp150,000,000,000.00 (one hundred fifty billion rupiah). The company has investments in one Investment Recipient Group that is not a Related Party in the form of PT Financing Y1 bonds amounting to Rp20,000,000,000.00 (twenty billion rupiah), deposits at PT Bank Y2 amounting to Rp20,000,000,000.00 (twenty billion rupiah), and shares of PT Bank Y2 amounting to Rp5,000,000,000.00 (five billion rupiah). Thus:

Total investment in one Party or Investment Recipient Group that is not a Related Party = Rp20,000,000,000.00 (twenty billion rupiah) + Rp20,000,000,000.00 (twenty billion rupiah) + Rp5,000,000,000.00 (five billion rupiah) = Rp45,000,000,000.00 (forty-five billion rupiah).
While the percentage of investment in one Investment Recipient Group that is not a Related Party against total investment: (Rp45,000,000,000.00 ÷ Rp150,000,000,000.00) × 100% = 30% (thirty percent).
The maximum investment limit in one Investment Recipient Group that is not a Related Party is 25% (twenty-five percent) of total investment. The maximum investment limit in one Investment Recipient Group that is not a Related Party in nominal terms: 25% × Rp150,000,000,000.00 = Rp37,500,000,000.00 (thirty-seven billion five hundred million rupiah).
There is an excess investment in one Investment Recipient Group that is not a Related Party, in percentage terms: 30% - 25% = 5% (five percent). In nominal terms: 5% × Rp150,000,000,000.00 = Rp7,500,000,000.00 (seven billion five hundred million rupiah).
Paragraph (2)
Clearly stated.
Article 17
Paragraph (1)
Letter a
Clearly stated.

Letter b
Clearly stated.
Letter c
Example:
PT A is controlled by the same controller as PT Insurance B, so PT A is referred to as a Related Party.
Letter d
The term "executive officials of the Company" refers to division heads, regional office heads, branch office heads, functional office heads with a position no lower than equivalent to a branch office head, head of the risk management work unit, head of the compliance work unit, head of the internal audit work unit, and/or other equivalent officials. Letter e Family relationships, whether horizontal or vertical, are:
1. biological/step/adopted parents;
2. biological/step/adopted siblings;
3. biological/step/adopted children;
4. biological/step/adopted grandparents;
5. biological/step/adopted grandchildren;
6. biological/step/adopted siblings of parents;
7. husband or wife;
8. parents-in-law or in-laws;
9. husband or wife of biological/step/adopted children;
10. grandparents of husband or wife;
11. husband or wife of biological/step/adopted grandchildren;
12. biological/step/adopted siblings of husband or wife, including the husband or wife of the sibling in question.
Letter f
Clearly stated.
Letter g
Clearly stated.
Letter h
The amount of 50% (fifty percent) or more is calculated from the cumulative total of directors and/or commissioners.
Letter i
Clearly stated.
Letter j
Financial relationships are analyzed from several factors, namely:
1. there is financial assistance from the Company and/or Related Party or financial assistance to the Company and/or other Related Party with terms that cause the party providing the financial assistance to have the ability to determine (controlling influence) the strategic policies of the recipient of the financial assistance.
2. there is a significant business chain linkage in the operational business of the Company or Related Party with other companies, resulting in dependency between one party and another party that causes:

a. one party is unable to easily transfer business transactions to another party; and b. the inability to easily transfer business transactions causes the cash flow of one party to experience significant disruption, resulting in difficulty in meeting obligations.
3. there is credit risk transfer through guarantees, where the guarantor party will take over part or all of the financial risks of the guaranteed party, excluding guarantees in the reinsurance and co-insurance mechanisms.
Letter k
The term "guarantee" refers to a promise given by one party to take over and/or settle part or all of the obligations of the debtor party in the event the debtor party fails to meet obligations (default). Letter l Clearly stated. Letter m Clearly stated. Paragraph (2) Example:

Insurance Company A and Company B are Related Parties.
Insurance Company A makes investment placements in mutual funds where one of its underlying assets is Company B's bonds.
The value of Company B's bonds in the mutual fund is 10% (ten percent) of the net asset value of the mutual fund.
If the net asset value of the mutual fund is assumed to be Rp1,000,000,000,000.00 (one trillion rupiah) and Insurance Company A holds 100 (one hundred) units out of a total of 2000 (two thousand) participation units, then the investment in the Related Party for the purchase of the mutual fund = (100/2000) x 10% x Rp1,000,000,000,000.00 (one trillion rupiah) = Rp5,000,000,000.00 (five billion rupiah).

Paragraph (3)
The term "joint control" refers to joint control by owners over a subsidiary based on a contractual agreement.
Joint control must be proven by the existence of a written agreement or commitment from the owners to provide financial and non-financial support according to their respective ownership. Indirectly holding shares means controlling or holding shares jointly or through other parties, including:

shares of the Company or other companies owned by other parties whose voting rights can be used or controlled by the controller.
shares of the Company or other companies owned by parties controlled by the controller.
shares of the Company or other companies owned by parties affiliated with the controller, namely:
a. members of the board of commissioners, members of the board of directors, or equivalents or their proxies, officials, or employees of the controlling company; b. managers, supervisors, managers, or their proxies, officials, or employees of the controlling company, specifically for companies with legal status as cooperatives;
c. parties providing services to the controlling company, such as public accountants, appraisers, legal consultants, and other consultants proven to be controlled by the controller;
d. parties having family relationships with the controller due to marriage and/or descent; and e. parties who, in the opinion of the Financial Services Authority, participate in influencing the management of the controller, such as shareholders and their families, families of board of commissioners members, families of supervisors, families of board of directors members, and families of managers.
shares of the Company or other companies owned by subsidiaries of companies controlled by the controller.
shares of the Company or other companies owned by parties acting on behalf of and for the controller (nominee shares) based on or not based on specific agreements.
shares of the Company or other companies owned by other parties whose transfer requires approval from the controller.
shares of other companies owned by the Company through companies controlled by the Company in a hierarchical manner up to the last company (ultimate subsidiary).
shares of the Company or other companies other than shares as referred to in numbers 1 to 7 that are controlled by the Company or controller.
Shares refer to all types of shares that have voting rights.
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
Strategic policies refer to policies concerning the determination of direction and goals of business implementation that have a significant impact.
Letter g
Clearly stated.
Letter h
Clearly stated.
Paragraph (4)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
See explanation of paragraph (3) letter f.
Letter g
Clearly stated.
Letter h
Clearly stated.
Paragraph (5)
Clearly stated.
Paragraph (6)
Letter a
Clearly stated.
Letter b
The provision of guarantees by Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, Sharia Reinsurance Companies, Guarantee Companies, and Sharia Guarantee Companies in accordance with Financial Services Authority Regulations regarding the conduct of business of each respective company. Letter c Clearly stated. Paragraph (7) Clearly stated.

Paragraph (8)
Clearly stated.
Article 18
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Financial relationships between investment recipients are analyzed based on several factors, namely:
1. there is financial assistance from one investment recipient to another investment recipient with terms that cause the investment recipient providing the financial assistance to have the ability to determine (controlling influence) the strategic policies of the investment recipient receiving the financial assistance.
2. there is a significant business chain linkage in the operational business of investment recipients with other investment recipients, resulting in dependency between investment recipients that causes:
a. one investment recipient is unable to easily transfer business transactions to other parties; and/or b. the inability to easily transfer business transactions causes the cash flow of one investment recipient to experience significant disruption, resulting in difficulty in meeting obligations.
3. there is credit risk transfer through guarantees, where one investment recipient acting as guarantor will take over part or all of the financial risks of the guaranteed investment recipient, excluding guarantees in the reinsurance and co-insurance mechanisms.
Letter e
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Article 19
Paragraph (1)
Example of Related Parties that are exempted due to control caused by direct ownership by the Republic of Indonesia:
1. The Insurance Company is a state-owned enterprise and the Other Party is a state-owned enterprise; and

2. The Insurance Company is a company owned by the Republic of Indonesia through dual-class shares and the Other Party is a state-owned enterprise.
Paragraph (2)
Example of Investment Recipient Groups that are exempted due to control caused by direct ownership by the Republic of Indonesia:
Financial Services Institution A, which is a state-owned enterprise, is not the same Investment Recipient Group as Company B, which is a state-owned enterprise.
Paragraph (3)
Clearly stated.
Paragraph (4)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
See explanation of Article 15 paragraph (2).
Paragraph (5)
Clearly stated.
Article 20
Paragraph (1)
Clearly stated.
Paragraph (2)
Letter a
Based on the financial report for January 2022, PT Insurance X has Equity amounting to Rp300,000,000,000.00 (three hundred billion rupiah). On February 15, 2022, PT Insurance X conducted an investment placement transaction with a Related Party amounting to Rp40,000,000,000.00 (forty billion rupiah). Thus:

Percentage of investment placement in Related Parties against the sum of Equity = (Rp40,000,000,000.00 ÷ Rp300,000,000,000.00) × 100% = 13.33% (thirteen point three three percent).
Violation of the maximum investment limit = 13.33% - 10% = 3.33% (three point three three percent). The nominal value of the violation of the maximum investment limit in Related Parties is 3.33% × Rp300,000,000,000.00 = Rp9,990,000,000.00 (nine billion nine hundred ninety million rupiah).
Letter b
Based on the financial report for January 2022, PT Insurance Y has total investments amounting to Rp300,000,000,000.00 (three hundred billion rupiah). Furthermore, PT Insurance Y only has investments in one Party or Related Investment Recipient Group amounting to Rp100,000,000,000.00 (one hundred billion rupiah). On February 15, 2022, PT Insurance Y conducted an investment placement transaction with one Party or Investment Recipient Group amounting to Rp50,000,000,000.00 (fifty billion rupiah). Thus:
Percentage of investment placement in one Party or Investment Recipient Group against total investment = (Rp150,000,000,000.00 [one hundred fifty billion rupiah] ÷ Rp300,000,000,000.00 [three hundred billion rupiah]) x 100% (one hundred percent) = 50% (fifty percent).
Violation of the maximum investment limit = 50% (fifty percent) - 25% (twenty-five percent) = 25% (twenty-five percent). The nominal value of the violation of the maximum investment limit in one Party or Investment Recipient Group is 25% (twenty-five percent) x Rp300,000,000,000.00 (three hundred billion rupiah) = Rp75,000,000,000 (seventy-five billion rupiah).
Paragraph (3)
Letter a
Clearly stated.
Letter b
Exchange rate changes can result in an increase in the carrying value of investments in foreign currency form, which can cause exceeding the maximum investment limit. In accordance with financial accounting standards, adjustments for exchange rates are only made for financial instrument accounts. Letter c The term "change in fair value of assets" includes changes in value in the recording of participations using the Equity method that have been more than 1 (one) year or the recording of securities measured at fair value through profit or loss or through Equity (mark to market). Letter d Business combinations, whether in the form of acquisition, merger, or other ownership structure changes, and/or changes in management structure carried out by the Company and/or the Investment Recipient Party can result in changes in the party designated as a Related Party or Investment Recipient Group. Thus, as a result of business combinations and/or changes in management structure, the Company must re-evaluate the amount of exposure held regarding investment placements concerning the limits established for Related Parties and/or Investment Recipient Groups. Letter e Clearly stated. Paragraph (4) The term "monthly report" refers to reports submitted by the Company to the Financial Services Authority on a monthly basis in accordance with legislation regarding periodic company reports. Based on the reports for January 2022 and February 2022, the data for PT Insurance X is as follows (figures in billion rupiah):
During February 2022, PT Insurance X did not conduct additional investments in Related Parties or non-Related Parties, so changes in investment value were only caused by price changes of each investment. Thus, there is an exceedance of the maximum investment limit as follows:
1. Exceedance of maximum investment limit = (Rp35,000,000,000.00÷Rp305,000,000,000.00)×100(Rp 35,000,000,000.00 ÷ Rp305,000,000,000.00) × 100%(Rp35,000,000,000.00÷Rp305,000,000,000.00)×10 0 – 10% = 1.48% (one point four eight percent), or in nominal terms 1.48% × Rp305,000,000,000.00 = Rp4,514,000,000.00 (four billion five hundred fourteen million rupiah).
2. Investment in non-Related Parties
Investment in PT C shares = (Rp180,000,000,000.00÷Rp705,000,000,000.00)×100(Rp 180,000,000,000.00 ÷ Rp705,000,000,000.00) × 100%(Rp180,000,000,000.00÷Rp705,000,000,000.00)×1 00 – 25% = 0.53% (zero point five three percent), or in nominal terms 0.53% × Rp705,000,000,000.00 = Rp3,750,000,000.00 (three billion seven hundred fifty million rupiah).
3. Investment in Investment Recipient Group D
=(Rp180,000,000,000.00÷Rp705,000,000,000.00)×100(R p180,000,000,000.00 ÷ Rp705,000,000,000.00) × 100%(Rp180,000,000,000.00÷Rp705,000,000,000.00)×1 00 – 25% = 0.53% (zero point five three percent), or in nominal terms 0.53% × Rp705,000,000,000.00 = Rp3,750,000,000.00 (three billion seven hundred fifty million rupiah). Paragraph (5) Clearly stated.
Article 21
Paragraph (1)
The action plan submitted by the Company is the Company's commitment to the Financial Services Authority.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Paragraph (6)
Clearly stated.
Article 22
Paragraph (1)
Examples of transactions that are considered normal include sales and purchases with the Company, shareholders, and/or Related Parties at fair market prices.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Article 23
Clearly stated.
Article 24
Clearly stated.
Article 25
Paragraph (1)
Letter a
Clearly stated.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
Clearly stated.
Letter e
Clearly stated.
Letter f
Clearly stated.
Letter g
Clearly stated.
Letter h
Clearly stated.

Letter i
Clearly stated.
Letter j
The term "acquisition costs" refers to commission costs, policy costs, and overriding commission costs.
Letter k
The term "right-to-use assets" refers to assets recognized by the Company based on lease contracts.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Article 26
Clearly stated.
Article 27
Paragraph (1)
Letter a
Clearly stated.
Letter b
The term "applicable standards" refers to applicable financial accounting standards, applicable actuarial practice standards, and applicable actuarial technical guidelines.
Paragraph (2)
Clearly stated.
Article 28
Paragraph (1)
Letter a
Number 1
Clearly stated.
Number 2
The term "other benefits" includes, for example, return of premium and no claim bonus.
Number 3
Reserves for PAYDI include, for example, reserves for unit-link and universal life products.
Letter b
Clearly stated.
Letter c
Clearly stated.
Letter d
The term "catastrophe risk" refers to the risk of loss arising from natural phenomena or pure accident risks that cause significant losses to the Company.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.

Paragraph (4)
Clearly stated.
Paragraph (5)
Clearly stated.
Paragraph (6)
Clearly stated.
Paragraph (7)
Clearly stated.
Article 29
Clearly stated.
Article 30
Clearly stated.
Article 31
What is determined by the Financial Services Authority includes, among others, the formation methods for each type of technical reserve and the assumptions used.
Article 32
Clearly stated.
Article 33
Clearly stated.
Article 34
Paragraph (1)
What is meant by “Other liabilities to policyholders or insured parties” includes, among others, premium deposits.
Paragraph (2)
Clearly stated.
Article 35
The provisions of letters a, b, and c refer to the Financial Services Authority Regulation regarding the management of assets and liabilities of Sharia Insurance Companies.
Article 36
Paragraph (1)
Clearly stated.
Paragraph (2)
Example:
Company A committed a violation of the provisions in this Financial Services Authority Regulation on January 31, 2026, but was corrected on February 10, 2026, and was known to the Financial Services Authority on March 1, 2026. Regarding this condition, the Financial Services Authority imposes a written warning sanction that ends by itself. Paragraph (3) Example:
Company A committed a violation of the provisions in this Financial Services Authority Regulation on January 31, 2026, and was known to the Financial Services Authority on March 1, 2026. Regarding this condition, the Financial Services Authority imposes an administrative sanction in the form of a written warning. Company A resolved the cause of the problem subject to the administrative sanction in the form of a written warning on March 31, 2026, so that the Financial Services Authority revoked the administrative sanction in the form of a written warning.
Article 37
Clearly stated.
Article 38
Clearly stated.
Article 39
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
What is meant by “adjustment of Sub-fund investment portfolio” includes, among others, a reduction in investments in 1 (one) Party that is not a Related Party from 1 (one) Sub-fund that has exceeded investment limits in 1 (one) Party that is not a Related Party to another Sub-fund that has not yet exceeded investment limits in 1 (one) Party that is not a Related Party. What is meant by “not harming policyholders or insured parties” is that the transfer of assets from 1 (one) Sub-fund to another Sub-fund is carried out at fair value, followed by the transfer of assets from the other Sub-fund to the relevant Sub-fund at the same fair value, and is based on the company’s analysis that the transferred assets are not subject to legal issues and/or a decline in investment performance. Example 1:
Sub-fund 1 has investments in Stock A that exceed the maximum investment limit on one Party, while Sub-fund 2 does not yet have investments in Stock A.
The Company transfers part of the investment in Stock A from Sub-fund 1 to Sub-fund 2 at fair value at the same time, followed by the transfer of assets in the form of Sharia deposits from Sub-fund 2 to Sub-fund 1 with the same value. Before the asset transfer, the Company has conducted an analysis of the investment performance of Stock A and there are no indications of deteriorating investment performance in Stock A. Example 2:
Sub-fund 1 needs liquidity, while Sub-fund 2 has sufficient liquidity. Therefore, the Company transfers part of the cash/bank assets from Sub-fund 2 to Sub-fund 1, followed by the transfer of Sukuk or Bond A from Sub-fund 1 to Sub-fund 2 using fair value. The Company has conducted an analysis of the investment performance of Bond A and there are no indications of deteriorating investment performance in Bond A.
Article 40
Clearly stated.
Article 41
Clearly stated.
Article 42
Clearly stated.
Article 43
Example:
Sub-fund A Stocks (Rp) Rp100,000,000.00
Sub-fund B Bonds ($) ≈Rp75,000,000.00
Sub-fund C Bonds (Rp) Rp150,000,000.00
Sub-fund D Stocks ($) ≈Rp75,000,000.00

Total Sub-fund investments = Rp100,000,000.00 +
Rp75,000,000.00 + Rp150,000,000.00 +
Rp75,000,000.00 = Rp400,000,000.00
Investment limit outside the country = 30% of
Rp400,000,000.00 = Rp120,000,000.00
Total investments outside the country = Rp75,000,000.00 +
Rp75,000,000.00 = Rp150,000,000.00
Adjustment of the total Sub-fund investment limit outside the country to Rp120,000,000.00 (30% of total
investments).
The Company violates the Sub-fund investment limit regulations because it exceeds 30% (thirty percent) of total investments.
Adjustments must adjust the Sub-fund investment limit outside the country by
Rp120,000,000.00.
Article 44
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
What is meant by “trading day” is the day on which trading of securities is held at the stock exchange, namely Monday to Friday, except if it is a national holiday or declared as a stock exchange holiday by the stock exchange.
Article 45
Clearly stated.

Article 46
Paragraph (1)
Clearly stated.
Paragraph (2)
See the explanation of Article 36 paragraph (2).
Paragraph (3)
See the explanation of Article 36 paragraph (3).
Article 47
Clearly stated.
Article 48
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Paragraph (5)
Example:

The Company buys US$1,000 through a forward contract with an exchange rate of Rp15,000.00 (T0 = 1,000 x Rp15,000.00 =
Rp15,000,000.00
After 3 (three) months, the market price rises so that the exchange rate
becomes Rp15,500.00 (T1 = 1,000 x Rp15,500.00 = Rp15,500,000.00.
So the assets arising from the transaction in question (profit) are = Rp15,500,000.00 –
Rp15,000,000.00 = Rp500,000.00.
Article 49
Clearly stated.
Article 50
Paragraph (1)
Clearly stated.
Paragraph (2)
See the explanation of Article 36 paragraph (2).
Paragraph (3)
See the explanation of Article 36 paragraph (3).
Article 51
Clearly stated.
Article 52
Clearly stated.
Article 53
Paragraph (1)
Clearly stated.
Paragraph (2)
See the explanation of Article 36 paragraph (2).
Paragraph (3)
See the explanation of Article 36 paragraph (3).

Article 54
Clearly stated.
Article 55
Clearly stated.
Article 56
Clearly stated.
Article 57
Clearly stated.
Article 58
Clearly stated.
Article 59
Clearly stated.
Article 60
Clearly stated.
Article 61
Clearly stated.
Article 62
Paragraph (1)
Clearly stated.
Paragraph (2)
See the explanation of Article 36 paragraph (2).
Paragraph (3)
See the explanation of Article 36 paragraph (3).
Article 63
Clearly stated.
Article 64
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Disclosure of asset and Liability separation in the Company’s financial statements based on provisions of legislation in the field of insurance.
Paragraph (4)
Clearly stated.
Article 65
Clearly stated.
Article 66
Paragraph (1)
Clearly stated.
Paragraph (2)
See the explanation of Article 36 paragraph (2).

Paragraph (3)
See the explanation of Article 36 paragraph (3).
Article 67
Clearly stated.
Article 68
Clearly stated.
Article 69
Clearly stated.
Article 70
Clearly stated.
Article 71
What is meant by the middle exchange rate is the sell rate plus the buy rate divided by two.
Article 72
Clearly stated.
Article 73
Paragraph (1)
What is meant by provisions of legislation in the field of insurance is the Financial Services Authority Regulation regarding periodic reports of insurance companies.
Paragraph (2)
Clearly stated.
Paragraph (3)
Clearly stated.
Paragraph (4)
Clearly stated.
Article 74
Clearly stated.
Article 75
Paragraph (1)
Clearly stated.
Paragraph (2)
See the explanation of Article 36 paragraph (2).
Paragraph (3)
See the explanation of Article 36 paragraph (3).
Article 76
Clearly stated.
Article 77
Clearly stated.
Article 78
Clearly stated.

Article 79
The granting of different approvals or policies is intended, among others, to:
a. support national policies; b. maintain public interests;
c. maintain industry growth;
d. maintain healthy business competition; and/or e. provide relaxation to insurance industry actors affected by disasters.
Examples of conditions requiring particular consideration, including extraordinary events that can cause a large increase in morbidity and mortality and also impact the economy and society, thus requiring attention and handling by all Related Parties and regulated in other provisions regarding consideration in facing possible extraordinary events. What is meant by “disaster” is an event or series of events that threaten and disrupt the life and livelihood of the community caused by natural and/or non-natural factors or human factors so as to result in human casualties, environmental damage, property losses, psychological impacts, disruption of performance of actors in the financial services sector, and/or affecting the economic conditions of the community.
Article 80
Paragraph (1)
Clearly stated.
Paragraph (2)
Clearly stated.
Paragraph (3)
Letter a
Example:
In December 2025, the Company had investment placements in the form of direct participation in non-financial service institutions. This Financial Services Authority Regulation applies in January 2026. The Company is given a period of 2 (two) years to make adjustments and investment placements in the form of direct participation in non-financial service institutions are still recognized as Permitted Assets, until January 2028. In the event that in February 2028, the Company has not made adjustments to these investments, all investments in the form of direct participation in non-financial service institutions are not recognized as Permitted Assets and no administrative sanctions are imposed. Letter b Example:
In December 2025, the Company had investment placements in the form of direct participation in financial service institutions and exceeded the 50% (fifty percent) limit of Company Equity. This Financial Services Authority Regulation applies in January 2026. The Company is given a period of 2 (two) years to make adjustments and investment placements in the form of direct participation in financial service institutions are still recognized as Permitted Assets, until January 2028. In the event that in February 2028, the Company has not made adjustments to these investments, the excess investments in the form of direct participation in non-financial service institutions are not recognized as Permitted Assets and no administrative sanctions are imposed.
Article 81
Clearly stated.
Article 82
Clearly stated.
Article 83
Clearly stated.
Article 84
Clearly stated.
Article 85
Clearly stated.
Article 86
Clearly stated.
Article 87
Clearly stated.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER ⸙

OJK Regulation No. 26 of 2025 on Asset and Liability Management of Insurance and Reinsurance Companies

OJK REGULATION NO. 26 OF 2025

ON

ASSET AND LIABILITY MANAGEMENT OF INSURANCE AND REINSURANCE COMPANIES

DECIDES:

CHAPTER I

GENERAL PROVISIONS

Article 1

CHAPTER II

FINANCIAL HEALTH

First Section

Scope of Financial Health

Article 2

Second Section

Solvency Ratio

Article 3

Article 4

Third Section

Permitted Assets in the Form of Investment

Article 5

Article 6

Article 7

Article 8

Article 9

Lineage: No known changes

Timeline

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