OJK Regulation No. 37 of 2025 on Determination of Supervisory Status and Follow-up for Insurance Companies, Guarantee Institutions, and Pension Funds

FINANCIAL SERVICES AUTHORITY REGULATION OF THE REPUBLIC OF INDONESIA NUMBER 37 OF 2025 ON THE DETERMINATION OF SUPERVISORY STATUS AND FOLLOW-UP FOR INSURANCE COMPANIES, GUARANTEE INSTITUTIONS, AND PENSION FUNDS BY THE GRACE OF GOD THE MOST HIGH

THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering: a. that to support a financial system that grows sustainably and stably, it is necessary to have healthy insurance companies, guarantee institutions, and pension funds; b. that as part of risk-based supervision, problems arising in the insurance, guarantee, and pension sectors need to be addressed early by increasing supervisory steps against insurance companies, guarantee institutions, and pension funds starting from normal supervision, which may then potentially worsen in health; c. that to support the implementation of risk-based supervision for guarantee institutions, it is necessary to establish provisions regarding the determination of supervisory status and follow-up for guarantee institutions; d. that based on the considerations as referred to in letters a, b, and c, it is necessary to establish a Financial Services Authority Regulation on the Determination of Supervisory Status and Follow-up for Insurance Companies, Guarantee Institutions, and Pension Funds;

Recalling:

1. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253) as amended by Law Number 4 of 2023 concerning 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);

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2. Law Number 40 of 2014 concerning Insurance (State Gazette of the Republic of Indonesia Year 2014 Number 337, Supplement to the State Gazette of the Republic of Indonesia Number 5618) as amended by Law Number 4 of 2023 concerning 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);
3. Law Number 1 of 2016 concerning Guarantees (State Gazette of the Republic of Indonesia Year 2016 Number 9, Supplement to the State Gazette of the Republic of Indonesia Number 5835) as amended by Law Number 4 of 2023 concerning 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);
4. Law Number 4 of 2023 concerning 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: To establish a FINANCIAL SERVICES AUTHORITY REGULATION ON THE DETERMINATION OF SUPERVISORY STATUS AND FOLLOW-UP FOR INSURANCE COMPANIES, GUARANTEE INSTITUTIONS, AND PENSION FUNDS.

CHAPTER I GENERAL PROVISIONS

Article 1 In this Financial Services Authority Regulation, the following terms are defined:

1. Insurance Companies, Guarantee Institutions, and Pension Funds, hereinafter referred to as PPDP, are financial service institutions that carry out activities in the insurance, guarantee, and pension sectors.
2. Board of Directors is the company organ authorized and fully responsible for managing the company for the benefit of the company, in accordance with the purpose and objectives of the company and representing the company, both in and out of court, in accordance with the articles of association for PPDP in the form of a limited liability company, or equivalent to the Board of Directors for PPDP in the form of a cooperative, joint venture, pension fund, and state-owned enterprise legal entity.
3. Board of Commissioners is the company organ tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors for PPDP in the form of a limited liability company, or equivalent to the Board of Commissioners for PPDP in the form of a cooperative, joint venture, pension fund, and state-owned enterprise legal entity.

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4. Controlling Shareholders, hereinafter abbreviated as PSP, are individuals or business entities, whether in the form of a legal entity or not, that directly hold 25% (twenty-five percent) or more of the issued shares or capital of an insurance company or guarantee institution and have voting rights, or directly hold less than 25% (twenty-five percent) of the issued shares or capital of an insurance company or guarantee institution and have voting rights but can be proven to have controlled the insurance company or guarantee institution, either directly or indirectly.
5. PPDP Health Level is the result of an assessment of the PPDP's condition conducted against good corporate governance, risk profile, profitability, and capital or funding.
6. Composite Ranking is the final ranking of the PPDP Health Level assessment results.
7. Insurance Company Controller is an individual or business entity, whether in the form of a legal entity or not, that directly or indirectly has the ability to influence actions and/or determine the Board of Directors, Board of Commissioners, or equivalents thereof at an insurance company.

Article 2 (1) This Financial Services Authority Regulation governs the determination of supervisory status and follow-up for PPDP. (2) PPDP as referred to in paragraph (1) includes: a. insurance companies, consisting of:

1. insurance companies;
2. reinsurance companies;
3. Sharia insurance companies; and
4. Sharia reinsurance companies, as referred to in statutory regulations concerning insurance; b. guarantee institutions, consisting of:
5. guarantee companies;
6. re-guarantee companies;
7. Sharia guarantee companies; and
8. Sharia re-guarantee companies, as referred to in statutory regulations concerning guarantees; and c. pension funds as referred to in statutory regulations concerning pension funds.

CHAPTER II SUPERVISORY STATUS OF PPDP

First Section General

Article 3 (1) The Financial Services Authority is authorized to determine the supervisory status of PPDP. (2) The supervisory status as referred to in paragraph (1) consists of: a. normal supervision; b. intensive supervision; or c. special supervision. (3) The determination of supervisory status as referred to in paragraph (2) is based on factors: a. Composite Ranking; b. corporate governance factor ranking; and/or c. quantitative parameters.

• 4 - (4) The Composite Ranking as referred to in paragraph (3) letter a and the corporate governance factor ranking as referred to in paragraph (3) letter b are conducted in accordance with the Financial Services Authority Regulation concerning the assessment of PPDP Health Level. (5) The determination of PPDP supervisory status as referred to in paragraph (1) is conducted at any time in accordance with the Financial Services Authority's assessment, taking into account the PPDP's condition based on the factors as referred to in paragraph (3).

Second Section Criteria and Duration of Intensive Supervisory Status

Article 4 (1) The Financial Services Authority establishes PPDP with intensive supervisory status as referred to in Article 3 paragraph (2) letter b, if it meets the criteria: a. PPDP Health Level is established at Composite Ranking 4 (four); b. PPDP Health Level is established at Composite Ranking 3 (three) with a corporate governance factor ranking at ranking 4 (four) or ranking 5 (five); and/or c. meets quantitative parameters. (2) The fulfillment of quantitative parameters as referred to in paragraph (1) letter c is determined as follows: a. for insurance companies, meeting quantitative parameters:

1. solvency level greater than or equal to 80% (eighty percent) and less than 120% (one hundred twenty percent) of risk-based minimum capital or risk-based minimum tabarru’ and tanahud funds;
2. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or
3. investment adequacy ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); b. for employer pension funds running defined benefit pension programs, meeting quantitative parameters:
4. funding quality at level 3 (three) with a solvency ratio greater than or equal to 50% (fifty percent) and less than 80% (eighty percent);
5. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or
6. contribution receivables age greater than or equal to 6 (six) months and accumulated contribution deficiency greater than or equal to 6 (six) times the average due contribution per month; c. for employer pension funds running defined contribution pension programs, meeting quantitative parameters:
7. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or
8. contribution receivables age greater than or equal to 6 (six) months and accumulated contribution deficiency greater than or equal to 6 (six) times the average due contribution per month; d. for financial institution pension funds, meeting quantitative parameters:
9. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or
10. profitability factor ranking 4 (four); and e. for guarantee institutions, meeting quantitative parameters:
11. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or
12. gearing ratio greater than 40 (forty) times and less than or equal to 50 (fifty) times.

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Article 5 (1) The Financial Services Authority establishes PPDP with intensive supervisory status as referred to in Article 4 paragraph (1) for a maximum period of 1 (one) year calculated from the date of the Financial Services Authority's notification letter. (2) The Financial Services Authority may establish an extension of the intensive supervisory status period as referred to in paragraph (1) if: a. the intensive supervisory status period has ended; and b. based on the Financial Services Authority's assessment, the PPDP still meets the criteria as referred to in Article 4, for a maximum of 1 (one) time with a maximum period of 1 (one) year. (3) The establishment of the extension of the intensive supervisory status period as referred to in paragraph (2) is based on the Financial Services Authority's assessment, considering the resolution of action plans that have received a statement of no objection. (4) The establishment of the extension of the intensive supervisory status period as referred to in paragraph (2) is accompanied by an increase in supervisory actions that must be carried out by the PPDP. (5) If the extension period as referred to in paragraph (2) has ended, the Financial Services Authority establishes an upgrade of the supervisory status.

Article 6 (1) PPDP that meets the criteria as referred to in Article 4 may not be established in intensive supervisory status for a certain period by the Financial Services Authority, if the PPDP: a. is in the process of merger, consolidation, or takeover; b. is in the process of increasing paid-up capital; and/or c. meets certain conditions based on the Financial Services Authority's assessment, to meet the criteria for normal supervisory status. (2) In addition to the provisions as referred to in paragraph (1), PPDP may not be established in intensive supervisory status for a certain period by the Financial Services Authority, if the PPDP is in the process of returning the business license. (3) PPDP that meets the criteria as referred to in paragraph (1) and paragraph (2), and has not yet met the criteria for normal supervisory status, and it is known that: a. it does not follow up on the process of merger, consolidation, or takeover; b. it does not follow up on the process of increasing paid-up capital;

• 6 - c. it experiences a deterioration in financial condition; and/or d. it does not follow up on the process of returning the business license, the Financial Services Authority establishes it as PPDP with intensive supervisory status.

Article 7 (1) The Financial Services Authority may establish a change of supervisory status from intensive supervisory status to normal supervisory status if the PPDP's condition improves and no longer meets the criteria as referred to in Article 4. (2) The establishment of the change of PPDP supervisory status as referred to in paragraph (1) is notified in writing by the Financial Services Authority to the Board of Directors and Board of Commissioners of the PPDP.

Third Section Criteria and Duration of Special Supervisory Status

Article 8 (1) The Financial Services Authority establishes PPDP with special supervisory status as referred to in Article 3 paragraph (2) letter c, if it meets the criteria: a. the intensive supervisory status period has ended; b. PPDP Health Level is established at Composite Ranking 5 (five); and/or c. meets quantitative parameters. (2) The fulfillment of quantitative parameters as referred to in paragraph (1) letter c is determined as follows: a. for insurance companies, meeting quantitative parameters:

1. solvency level less than 80% (eighty percent) of risk-based minimum capital or risk-based minimum tabarru’ and tanahud funds;
2. liquidity ratio less than 80% (eighty percent); and/or
3. investment adequacy ratio less than 80% (eighty percent); b. for employer pension funds running defined benefit pension programs, meeting quantitative parameters:
4. funding quality at level 3 (three) with a solvency ratio less than 50% (fifty percent);
5. liquidity ratio less than 80% (eighty percent); and/or
6. contribution receivables age greater than or equal to 24 (twenty-four) months and accumulated contribution deficiency greater than or equal to 24 (twenty-four) times the average due contribution per month; c. for employer pension funds running defined contribution pension programs, meeting quantitative parameters:
7. liquidity ratio less than 80% (eighty percent); and/or
8. contribution receivables age greater than or equal to 24 (twenty-four) months and accumulated contribution deficiency greater than or equal to 24 (twenty-four) times the average due contribution per month; d. for financial institution pension funds, meeting quantitative parameters:
9. liquidity ratio less than 80% (eighty percent); and/or
10. profitability factor ranking 5 (five); and e. for guarantee institutions, meeting quantitative parameters:
11. liquidity ratio less than 80% (eighty percent); and/or
12. gearing ratio greater than 50 (fifty) times.

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Article 9 (1) The Financial Services Authority establishes PPDP with special supervisory status as referred to in Article 8 paragraph (1) for a maximum period of 1 (one) year calculated from the date of the Financial Services Authority's notification letter. (2) If the period for PPDP with special supervisory status as referred to in paragraph (1) has ended, the Financial Services Authority may establish an extension of the special supervisory status period. (3) The establishment of the extension of the special supervisory status period as referred to in paragraph (2) is based on the Financial Services Authority's assessment, considering the resolution of action plans that have received a statement of no objection. (4) The establishment of the extension of the special supervisory status period as referred to in paragraph (2) may be accompanied by an increase in supervisory actions that must be carried out by the PPDP. (5) In the event of a change in the action plan for the improvement of problems faced by the PPDP, the period for PPDP with special supervisory status follows the period in the changed action plan that has received a statement of no objection.

Article 10 (1) PPDP that meets the criteria as referred to in Article 8 may not be established in special supervisory status for a certain period by the Financial Services Authority, if the PPDP: a. is in the process of merger, consolidation, or takeover; or b. is in the process of increasing paid-up capital; and/or c. meets certain conditions based on the Financial Services Authority's assessment, to meet the criteria for normal supervisory status. (2) In addition to the provisions as referred to in paragraph (1), PPDP may not be established in special supervisory status for a certain period by the Financial Services Authority, if the PPDP is in the process of returning the business license. (3) PPDP that meets the criteria as referred to in paragraph (1) and paragraph (2), and has not yet met the criteria for normal supervisory status or intensive supervisory status, and it is known that: a. it does not follow up on the process of merger, consolidation, or takeover; b. it does not follow up on the process of increasing paid-up capital; c. it experiences a deterioration in financial condition; and/or d. it does not follow up on the process of returning the business license, the Financial Services Authority establishes it as PPDP in special supervisory status.

Article 11 (1) The Financial Services Authority may establish a change of supervisory status from special supervisory status to normal supervisory status or intensive supervisory status if the PPDP's condition improves and no longer meets the criteria as referred to in Article 8. (2) The establishment of the change of PPDP supervisory status as referred to in paragraph (1) is notified in writing by the Financial Services Authority to the Board of Directors and Board of Commissioners of the PPDP.

CHAPTER III FOLLOW-UP OF SUPERVISORY STATUS

First Section General

Article 12 (1) In the event that PPDP with normal supervisory status as referred to in Article 3 paragraph (2) letter a is assessed to have significant problems that potentially endanger its business continuity, the Financial Services Authority may carry out supervisory actions. (2) PPDP with normal supervisory status as referred to in paragraph (1) is required to carry out supervisory actions ordered by the Financial Services Authority.

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Article 13 (1) The Financial Services Authority sends a notification letter establishing the supervisory status of PPDP as referred to in Article 3 paragraph (2) letters b and c to the Board of Directors and Board of Commissioners, accompanied by: a. reasons for establishing the supervisory status; and b. supervisory actions. (2) PPDP with intensive and special supervisory status is required to carry out the supervisory actions as referred to in paragraph (1) letter b ordered by the Financial Services Authority. (3) The supervisory actions provided by the Financial Services Authority to PPDP as referred to in paragraph (2) are based on the Financial Services Authority's assessment of the problems faced by the PPDP.

Second Section Action Plan

Article 14 (1) PPDP with normal supervisory status as referred to in Article 12 paragraph (1), intensive supervisory status as referred to in Article 4 paragraph (1), or special supervisory status as referred to in Article 8 paragraph (1) is required to submit an action plan to the Financial Services Authority at the latest 15 (fifteen) working days calculated from the date of the Financial Services Authority's notification of supervisory status. (2) The action plan as referred to in paragraph (1) must at least contain a plan for improvement to be carried out by the PPDP regarding the problems faced, accompanied by a completion timeline. (3) The improvement plan as referred to in paragraph (2) includes: a. improving the business plan; b. not conducting certain transactions with related parties and/or unrelated parties; c. not conducting certain activities; d. limiting the implementation of product issuance plans and/or new activities; e. not expanding the office network; f. not distributing underwriting surplus, tabarru’ funds, to the company and/or participants; g. providing qardh and/or grants to tabarru’ funds and/or tanahud funds; h. limiting or not conducting asset growth, investments, and/or provision of new funds; i. limiting the receipt of loans and/or issuance of debt securities; j. selling part or all of the assets and/or transferring PPDP liabilities to other PPDP and/or related parties; k. transferring assets and/or liabilities to other parties; l. limiting remuneration payments or other equivalent forms, to members of the Board of Directors, members of the Board of Commissioners, and/or members of the Sharia supervisory board, or remuneration to related parties; m. replacing members of the Board of Directors and/or members of the Board of Commissioners; n. delaying or not distributing profits; o. strengthening capital through capital contributions; p. requesting commitment from pension fund founders to make contributions to the pension fund to improve funding; q. conducting merger or consolidation; and/or r. supervisory actions ordered by the Financial Services Authority. (4) For PPDP that carries out all or part of its business activities based on Sharia principles, the action plan as referred to in paragraph (1) must first obtain an opinion from the Sharia supervisory board. (5) The action plan as referred to in paragraph (1) must be signed by all members of the Board of Directors and members of the Board of Commissioners. (6) The action plan as referred to in paragraph (1) must first be approved by the General Meeting of Shareholders, General Meeting of Members, or Founders' Meeting in the event that the actions in the plan are within the authority of the General Meeting of Shareholders, General Meeting of Members, or Founders' Meeting.

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Article 15 (1) The action plan as referred to in Article 14 paragraph (1) must obtain a statement of no objection from the Financial Services Authority. (2) The Financial Services Authority provides a statement of no objection as referred to in paragraph (1) at the latest 15 (fifteen) working days calculated from the date the action plan is received in complete form and assessed as capable of resolving the problems causing the PPDP to meet the criteria for intensive or special supervisory status. (3) In the event that the action plan as referred to in paragraph (1) is assessed to still require improvement, the Financial Services Authority, within a period of 15 (fifteen) working days calculated from the date the action plan is received in complete form, may request the PPDP to improve the action plan. (4) The request for action plan improvement as referred to in paragraph (3) refers to supervisory actions based on the Financial Services Authority's assessment of the problems faced by the PPDP. (5) PPDP is required to submit the improved action plan in accordance with the request of the Financial Services Authority as referred to in paragraph (3) at the latest 15 (fifteen) working days calculated from the date of the letter requesting improvement of the action plan from the Financial Services Authority. (6) In the event that the PPDP has submitted the improved action plan in accordance with the request of the Financial Services Authority, the Financial Services Authority provides a statement of no objection at the latest 15 (fifteen) working days calculated from the date the action plan is received in complete form.

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