POJK on Dissolution, Liquidation, and Bankruptcy of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 28 /POJK.05/2015
CONCERNING
DISSOLUTION, LIQUIDATION, AND BANKRUPTCY OF INSURANCE COMPANIES, SHARIA INSURANCE COMPANIES, REINSURANCE COMPANIES, AND SHARIA REINSURANCE COMPANIES BY THE GRACE OF GOD THE MOST HIGH, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to implement the provisions of Article 42 paragraph (4),
Article 44 paragraph (3), Article 45 paragraph (3), and Article 51 paragraph (4)
of Law Number 40 of 2014 concerning Insurance, it is necessary to establish a Financial Services Authority Regulation concerning Dissolution, Liquidation, and Bankruptcy of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies; 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);
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);

COPY

DECIDES:
To establish:
FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING DISSOLUTION, LIQUIDATION, AND BANKRUPTCY OF INSURANCE COMPANIES, SHARIA INSURANCE COMPANIES, REINSURANCE COMPANIES, AND SHARIA REINSURANCE COMPANIES.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Company means insurance company, Sharia insurance company, reinsurance company, and Sharia reinsurance company.
2. Insurance Company means general insurance company and life insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
3. Sharia Insurance Company means Sharia general insurance company and Sharia life insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
4. Reinsurance Company means a company that provides reinsurance services for risks faced by Insurance Companies, guarantee companies, or other Reinsurance Companies.
5. Sharia Reinsurance Company means a company that manages risks based on Sharia principles for risks faced by Sharia Insurance Companies, Sharia guarantee companies, or other Sharia Reinsurance Companies.
6. General Meeting of Shareholders, hereinafter abbreviated as GMS, is the GMS as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for Companies in the form of a limited liability company legal entity or equivalent to the GMS in a cooperative legal entity.
7. Board of Directors means the Board of Directors as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for Companies in the form of a limited liability company legal entity or equivalent to the Board of Directors in a cooperative legal entity.
8. Board of Commissioners means the Board of Commissioners as referred to in Law Number 40 of 2007 concerning Limited Liability Companies for Companies in the form of a limited liability company legal entity or equivalent to the Board of Commissioners in a cooperative legal entity.
9. Sharia Supervisory Board is a part of the Company's organ that conducts business activities based on Sharia principles, which performs supervisory functions over the implementation of insurance or reinsurance business to ensure compliance with Sharia principles.
10. Revocation of Company Business License is the revocation of the Company's business license by the Financial Services Authority because the Company does not meet regulations in the field of insurance or is declared bankrupt by the court.
11. Company Dissolution, hereinafter referred to as Dissolution, is the process of terminating the Company's legal entity status after the Revocation of the Company Business License.
12. Company Liquidation, hereinafter referred to as Liquidation, is the action of settling all assets and liabilities of the Company as a result of the Revocation of the Company Business License and Dissolution.
13. Liquidation Team is a team tasked with conducting Liquidation, formed by the GMS or the Financial Services Authority.
14. Policyholder is a party that binds itself through an agreement with the Company to obtain protection or risk management for itself, the insured, or other participants as referred to in Law Number 40 of 2014 concerning Insurance.
15. Insured is a party facing risks as regulated in the insurance agreement or reinsurance agreement as referred to in Law Number 40 of 2014 concerning Insurance.
16. Participant is a party facing risks as regulated in the Sharia insurance agreement or Sharia reinsurance agreement as referred to in Law Number 40 of 2014 concerning Insurance.
17. Creditor is any party that has a claim or debt against the Company, including Policyholders, Insured, Participants, or other parties entitled to insurance/Sharia insurance benefits and Company employees.
18. Insurance Fund is a collection of funds originating from premiums formed to meet obligations arising from issued policies or insurance claims as referred to in Law Number 40 of 2014 concerning Insurance.
19. Tabarru' Fund is a collection of funds originating from contributions from Participants, the mechanism of which is used in accordance with the Sharia insurance agreement or Sharia reinsurance agreement as referred to in Law Number 40 of 2014 concerning Insurance.
20. Closing Balance Sheet is the Company's balance sheet as of the date of the Revocation of the Company Business License, prepared in accordance with applicable financial accounting standards.
21. Interim Liquidation Balance Sheet is the Company's balance sheet as of the date of the Revocation of the Company Business License, prepared by the Liquidation Team based on the audited Closing Balance Sheet, taking into account:
    a. asset positions based on estimated realizable values; and b. liability positions after the expiration of the period for submission of claims or debts by Creditors.
22. Final Liquidation Balance Sheet is the balance sheet submitted by the Liquidation Team after the Liquidation process is completed or the execution period of the Liquidation ends.
23. Bankruptcy is a general seizure of all assets of a bankrupt debtor, the administration and settlement of which are carried out by a curator under the supervision of a supervising judge as referred to in Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations.
24. Insurance Products Linked to Investment, hereinafter referred to as PAYDI, are insurance products that provide at least death risk protection and provide benefits referring to the investment results of a special fund formed for the insurance product, whether stated in unit form or not.
25. Conflict of Interest is a situation where there is a conflict between the economic interests of the Company and the personal economic interests of shareholders or equivalents to shareholders in a cooperative legal entity, members of the Board of Directors, members of the Board of Commissioners, and/or members of the Sharia Supervisory Board.
26. Newspaper means a daily newspaper in Indonesian language distributed nationally.
27. Day means calendar day.
28. Financial Services Authority, hereinafter abbreviated as OJK, is an independent institution that has the function, duties, and authority for regulation, supervision, examination, and investigation as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.

CHAPTER II
DISSOLUTION AND LIQUIDATION OF COMPANIES WHOSE BUSINESS LICENSES ARE REVOKED DUE TO NON-COMPLIANCE WITH REGULATIONS IN THE FIELD OF INSURANCE First Section Obligations and Prohibitions for Companies After Revocation of Business License
Article 2
(1) The Company is obliged to cease business activities and immediately convene a GMS to decide on Dissolution and form a Liquidation Team since the Revocation of the Company Business License. (2) Since the Revocation of the Company Business License, shareholders or equivalents to shareholders in a cooperative legal entity, the Board of Directors, Board of Commissioners, and Company employees are prohibited from transferring, mortgaging, pledging, or using assets, or taking other actions that can reduce assets or lower the value of the Company's assets.
Article 3
(1) The Board of Directors is obliged to prepare and submit the Closing Balance Sheet to the OJK no later than 15 (fifteen) Days from the date of the Revocation of the Company Business License. (2) If the Closing Balance Sheet is not submitted to the OJK within the period referred to in paragraph (1), the OJK appoints a public accountant to prepare the Closing Balance Sheet. (3) In the event that the Closing Balance Sheet is prepared by a public accountant as referred to in paragraph (2), the responsibility for the Closing Balance Sheet remains with the Board of Directors. (4) The deadline for submitting the Closing Balance Sheet prepared by a public accountant as referred to in paragraph (2) must consider the office location, asset conditions, and complexity of the Company's problems, with a maximum limit of 60 (sixty) Days from the date of appointment of the public accountant. (5) The cost of preparing the Closing Balance Sheet by a public accountant as referred to in paragraph (2) becomes the Company's expense. (6) The OJK submits the Closing Balance Sheet to the Liquidation Team after receiving the Closing Balance Sheet prepared and submitted by the Board of Directors as referred to in paragraph (1) or prepared and submitted by a public accountant as referred to in paragraph (2). Second Section Dissolution
Article 4
(1) Within a maximum of 30 (thirty) Days from the date of revocation of the business license, the Company whose business license is revoked is obliged to convene a GMS to decide on the relevant Dissolution and form a Liquidation Team. (2) Members of the Liquidation Team as referred to in paragraph (1) must first obtain approval from the OJK. (3) To obtain OJK approval as referred to in paragraph (2), the Board of Directors must submit the following documents:
a. photocopies of identity documents of candidate members of the Liquidation Team; b. curriculum vitae of candidate members of the Liquidation Team; and
c. statement of candidate members of the Liquidation Team that they are willing to carry out Liquidation in accordance with the provisions of Law Number 40 of 2014 concerning Insurance and this OJK Regulation.
(4) The documents as referred to in paragraph (3) must be submitted to the OJK no later than 15 (fifteen) Days before the date of the GMS implementation.
(5) The OJK provides approval or rejection of the proposal for candidate members of the Liquidation Team as referred to in paragraph (2) no later than 5 (five) Days after receiving the complete documents. (6) If the period as referred to in paragraph (5) has passed and the OJK has not provided approval or rejection of the proposal for candidate members of the Liquidation Team, the OJK is deemed to have approved the proposed composition of candidate members of the Liquidation Team. (7) In the event that the OJK rejects the proposal for candidate members of the Liquidation Team, the Board of Directors is obliged to submit a new proposal for candidate members of the Liquidation Team and submit the documents as referred to in paragraph (3) no later than 5 (five) Days after receiving the notification from the OJK.
Article 5
(1) In the context of Dissolution, the Liquidation Team formed by the GMS as referred to in Article 4 paragraph (1) registers and notifies the Dissolution to the competent authority, and announces it in the State Gazette of the Republic of Indonesia and 2 (two) daily newspapers with wide circulation. (2) The action as referred to in paragraph (1) is carried out no later than 30 (thirty) Days from the date of the Dissolution decision by the GMS. (3) The notification and announcement as referred to in paragraph (1) contain:
a. Dissolution and its legal basis; b. name and address of the Liquidation Team;
c. procedure for submitting claims; and
d. period for submitting claims.
(4) The period for submitting claims as referred to in paragraph (3) letter d for Companies in the form of a limited liability company legal entity is no longer than 60 (sixty) Days calculated from the date of announcement as referred to in paragraph (1). (5) The period for submitting claims as referred to in paragraph (3) letter d for Companies in the form of a cooperative legal entity is no longer than 3 (three) months calculated from the date of announcement as referred to in paragraph (1).
Article 6
(1) If within the period as referred to in Article 4 paragraph (1) the GMS cannot be convened or the GMS can be convened but fails to decide on Dissolution and fails to form a Liquidation Team, the OJK:
a. decides on Dissolution and forms a Liquidation Team; b. registers and notifies the Dissolution to the competent authority, and announces it in the State Gazette of the Republic of Indonesia and 2 (two) daily newspapers with wide circulation;
c. orders the Liquidation Team to carry out Liquidation in accordance with the provisions of Law Number 40 of 2014 concerning Insurance and this OJK Regulation; and
d. orders the Liquidation Team to report the results of Liquidation implementation to the OJK.
(2) The action as referred to in paragraph (1) letter b is carried out by the OJK no later than 15 (fifteen) Days from the date of the Dissolution decision by the OJK as referred to in paragraph (1) letter a. (3) The notification and announcement as referred to in paragraph (1) letter b contain:
a. Dissolution and its legal basis; b. name and address of the Liquidation Team;
c. procedure for submitting claims; and
d. period for submitting claims.
(4) The period for submitting claims as referred to in paragraph (3) letter d for Companies in the form of a limited liability company legal entity is no longer than 60 (sixty) Days calculated from the date of announcement as referred to in paragraph (1) letter b. (5) The period for submitting claims as referred to in paragraph (3) letter d for Companies in the form of a cooperative legal entity is no longer than 3 (three) months calculated from the date of announcement as referred to in paragraph (1) letter b.
Article 7
(1) Since the GMS decision as referred to in Article 4 paragraph (1) or the OJK decision as referred to in Article 6 paragraph (1), a Company in the form of a limited liability company legal entity is called a Company in Liquidation and is obliged to append the word "(in liquidation)" abbreviated as "(DL)" behind the Company name. (2) Since the GMS decision as referred to in Article 4 paragraph (1) or the OJK decision as referred to in Article 6 paragraph (1), a Company in the form of a cooperative legal entity is called a Company in Settlement and is obliged to append the word "(in settlement)" abbreviated as "(DP)" behind the Company name. Third Section Liquidation Team Paragraph 1 General
Article 8
(1) Since the formation of the Liquidation Team as referred to in Article 4 and Article 6:
a. responsibility and management of the Company in Liquidation is carried out by the Liquidation Team; b. the Board of Directors, Board of Commissioners, and Sharia Supervisory Board:

1. no longer have authority as Board of Directors, Board of Commissioners, and Sharia Supervisory Board and become inactive;
2. are not permitted to resign before Liquidation is completed, except with OJK approval; and
3. are not entitled to receive salaries and other income as Board of Directors, Board of Commissioners, and Sharia Supervisory Board of the Company in Liquidation.
   (2) Shareholders or equivalents to shareholders in a cooperative legal entity, the Board of Directors, Board of Commissioners, Sharia Supervisory Board, and employees of the Company in Liquidation are obliged to provide data, information, and documents required by the Liquidation Team. (3) Shareholders or equivalents to shareholders in a cooperative legal entity, the Board of Directors, Board of Commissioners, Sharia Supervisory Board, and employees of the Company in Liquidation are prohibited from hindering the Liquidation process. Paragraph 2 Duties and Authority of the Liquidation Team
   Article 9
   The Liquidation Team has the following duties:
   a. settling matters related to Dissolution; b. settling matters related to Company employees;
   c. settling Company assets and liabilities;
   d. submitting periodic reports and incidental reports when necessary to the OJK; e. accounting for the implementation of Liquidation to:
4. GMS, for Liquidation Teams formed by the GMS; or
5. OJK, for Liquidation Teams formed by the OJK; and
   f. carrying out other tasks deemed necessary to carry out the Liquidation process.
   Article 10
   In order to carry out duties as referred to in Article 9, the Liquidation Team has the authority to:
   a. represent the Company in Liquidation in all matters related to the settlement of rights and obligations of the Company both inside and outside the court; b. conduct negotiations and other actions for the sale of assets and collection of debts from debtors;
   c. summon, negotiate, and pay obligations to Creditors;
   d. employ support personnel for the Liquidation Team, both from within and outside the Company in Liquidation; e. appoint other parties to assist in the implementation of Liquidation, including actuarial consultants, appraisers, and advocates/lawyers/legal consultants; f. summon Creditors; g. request the court to cancel all legal acts of the Company that are suspected of harming the Company and were done in bad faith; and h. take other actions necessary in the context of Liquidation implementation.
   Article 11
   In order to represent the Company in Liquidation outside and inside the Court as referred to in Article 10 letter a, the Liquidation Team may use the services of advocates/lawyers/legal consultants in accordance with applicable regulations.
   Article 12
   (1) In order to employ support personnel for the Liquidation Team and appoint other parties as referred to in Article 10 letter d and letter e, the Liquidation Team must consider:
   a. efficiency in the implementation of Liquidation; b. expertise of the Liquidation Team's support personnel or the other parties referred to; and
   c. the financial capacity of the Company in Liquidation to pay remuneration to the Liquidation Team's support personnel or the other parties referred to.
   (2) Remuneration for the Liquidation Team's support personnel or other parties as referred to in paragraph (1) letter c includes honorariums, holiday allowances, and participation in national social security programs in accordance with applicable regulations.
   Article 13
   In order to request cancellation from the court as referred to in Article 10 letter g, the Liquidation Team first takes actions such as identifying ongoing agreements as of the date of the Revocation of the Company Business License that are suspected of harming the Company, by examining:
   a. the validity of the agreements based on applicable regulations; and b. the fairness of transaction prices.
   Article 14
   The Liquidation Team must act fairly and objectively in carrying out its duties and authorities.

Paragraph 3
Period of Liquidation Implementation
Article 15
(1) The implementation of Liquidation by the Liquidation Team must be completed within a maximum period of 2 (two) years calculated from the date of formation of the Liquidation Team. (2) In the event that the implementation of Liquidation cannot be completed within the period as referred to in paragraph (1), then:
a. the GMS has the authority to extend the implementation period of Liquidation at most 2 (two) times, each for a maximum of 1 (one) year, for Liquidation Teams formed by the GMS after first obtaining approval from the OJK; b. the OJK can extend the implementation period of Liquidation at most 2 (two) times, each for a maximum of 1 (one) year, for Liquidation Teams formed by the OJK. (3) The application for extension of the implementation period of Liquidation as referred to in paragraph (2) must at least be accompanied by:
a. reasons for the extension of the implementation period of Liquidation; b. progress reports of the Liquidation process up to the date of the application along with supporting evidence; and
c. work plan and budget during the extension of the implementation period of Liquidation.
(4) The application for extension of the implementation period of Liquidation as referred to in paragraph (2) is submitted no later than 4 (four) months before the expiration of the implementation period of Liquidation as referred to in paragraph (1) or the expiration of the first extension period. (5) In the event that the implementation of Liquidation cannot be completed within the period as referred to in paragraph (2), the OJK can:
a. wait until there is a final court decision, in the event that the implementation of Liquidation is not completed until the period as referred to in paragraph (2) is due to lawsuits or disputes over the Company's problematic assets in Liquidation; or b. determine other settlement steps in accordance with applicable regulations. Paragraph 4 Members of the Liquidation Team
Article 16
(1) Members of the Liquidation Team for each Company in Liquidation are at least 2 (two) people and at most 5 (five) people.
(2) The determination of the number of Liquidation Team members is done by considering the effectiveness and efficiency of Liquidation implementation.
(3) If necessary, one member from shareholders or equivalents to shareholders in a cooperative legal entity, the Board of Directors, or the Board of Commissioners can be appointed as a member of the Liquidation Team by considering understanding of the problems occurring in the Company, being cooperative, and not having Conflicts of Interest that can harm the Company. (4) One member of the Liquidation Team is appointed as the Chairman of the Liquidation Team.
Article 17
(1) The appointment of the Liquidation Team is done by considering the integrity, competence, and financial reputation of candidate members of the Liquidation Team.
(2) Liquidation Team membership must consist of at least:
a. 1 (one) person who has knowledge and experience of at least 10 (ten) years in the field of insurance; and b. 1 (one) person who has knowledge and experience of at least 10 (ten) years in the field of law, audit, finance, and/or accounting. (3) Fellow members of the Liquidation Team and between members of the Liquidation Team and support personnel of the Liquidation Team or other appointed parties must not have marriage relationships, in-law relationships, or blood relationships upwards, downwards, and sideways up to the first degree.
Article 18
In the event of a conflict of interest between the interests of shareholders or equivalents to shareholders in a cooperative legal entity and the interests of Policyholders, Insured, or Participants, the Liquidation Team must prioritize the interests of Policyholders, Insured, or Participants.
Article 19
(1) In the event that members of the Liquidation Team are formed by the GMS, the OJK can order the GMS to dismiss and/or appoint replacements for members of the Liquidation Team who resign before the end of the Liquidation Team's assignment period with the consideration if the member of the Liquidation Team:
a. does not perform duties well; b. violates applicable regulations;
c. resigns;
d. is permanently unable to perform duties; or e. dies.
(2) In the event that the OJK orders the GMS as referred to in

meant in paragraph (1), but the General Meeting of Shareholders (GMS) does not dismiss and/or appoint a replacement for the Liquidation Team member, then OJK may dismiss and/or appoint a replacement for the Liquidation Team member who has left.

(3) In the event that members of the Liquidation Team are formed by OJK, OJK may dismiss members of the Liquidation Team before the end of the Liquidation Team's assignment period based on considerations as referred to in paragraph (1).

(4) OJK may appoint a replacement for the Liquidation Team member who has been dismissed as referred to in paragraph (3) for the remainder of their term.

Paragraph 5
Remuneration of the Liquidation Team

Article 20
(1) Members of the Liquidation Team are given remuneration determined by:
a. GMS for the Liquidation Team formed by GMS; or b. OJK for the Liquidation Team formed by OJK.

(2) Remuneration as referred to in paragraph (1) consists of:
a. honorarium; and b. other income/facilities.

(3) The amount of remuneration for the Liquidation Team as referred to in paragraph (1) is determined by considering factors including:
a. the amount of assets and liabilities; b. the condition and level of difficulty in liquidating assets and/or collecting receivables and settling the Company's liabilities;
c. the Company's office network in Liquidation; and
d. the qualifications of the Liquidation Team members.

(4) Other income/facilities as referred to in Article 20 paragraph (2) letter b only include holiday allowances, reasonable incentives, and participation in national social security programs in accordance with applicable legislation.

(5) Remuneration of the Liquidation Team is a component of Liquidation costs that becomes the burden of the Company in Liquidation.

(6) Provisions regarding the granting of reasonable incentives as referred to in paragraph (4) are regulated in an OJK Circular.

Paragraph 6
Work Plan and Budget of the Liquidation Team

Article 21
(1) The Liquidation Team prepares a work plan and budget in the implementation of Liquidation referring to the work plan and budget guidelines.

(2) The Liquidation Team prepares a work plan and budget in the implementation of Liquidation which at least contains:
a. types of activities to be carried out; b. schedule for the completion of each activity;
c. plans and methods for liquidating assets and/or collecting receivables;
d. plans and methods for paying liabilities to Creditors; e. the number of support personnel required for the Liquidation Team; and f. Liquidation costs.

(3) The work plan and budget as referred to in paragraph (1) is prepared for the period during the Liquidation Team's assignment term, detailed monthly.

(4) In the event of an amendment to the work plan and budget for the current year, the Liquidation Team must submit the amendment to the OJK to obtain approval.

(5) Amendments to the work plan and budget as referred to in paragraph (4) are approved by OJK within a maximum of 20 (twenty) Days after OJK receives the amendment to the work plan and budget.

(6) In the event that OJK has not or does not provide approval for the amendment to the work plan and budget as referred to in paragraph (4), the Liquidation Team continues to use the last work plan and budget that was approved by OJK.

(7) In the event that OJK extends the implementation period of Liquidation and/or the term of the Liquidation Team, the Liquidation Team submits a work plan and budget for the extension period to OJK.

(8) Further provisions regarding the work plan and budget guidelines as referred to in paragraph (1) are regulated in an OJK Circular.

Article 22
(1) The work plan and budget as referred to in Article 21 is submitted to OJK within a maximum of 30 (thirty) Days since the Liquidation Team was formed or since the start of the Liquidation Team's term extension.

(2) OJK may request amendments to the work plan and budget within a maximum of 10 (ten) Days since the receipt of the work plan and budget.

(3) In the event that OJK requests amendments to the work plan and budget, the Liquidation Team is required to submit amendments to the work plan and budget in accordance with OJK's request within a maximum of 10 (ten) Days since the receipt of the amendment request letter from OJK.

(4) OJK provides approval for the work plan and budget within a maximum of 20 (twenty) Days after OJK receives the work plan and budget as referred to in paragraph (1) or amendments to the work plan and budget as referred to in paragraph (3).

Part Four
Settlement of the Company's Liabilities to Employees

Article 23
(1) In order to carry out the task of settling matters related to the Company's employees as referred to in Article 9 letter b, the Liquidation Team calculates the owed salaries and severance pay of employees which are the Company's liabilities to employees who have had their employment terminated.

(2) Payment of owed salaries as referred to in paragraph (1) is carried out by taking into account the employees' liabilities that have become due.

(3) Payment of severance pay as referred to in paragraph (1) is carried out by taking into account all employee liabilities.

(4) The Liquidation Team may postpone the payment of severance pay to members of the Board of Directors and Company employees who are indicated to have committed insurance crimes and/or other criminal acts that can harm the Company.

(5) The Liquidation Team is required to terminate the employment of employees within a maximum of 3 (three) months since the formation of the Liquidation Team.

(6) The Liquidation Team is required to make calculations of other employee rights arising as a result of the termination of employment as regulated in legislation in the field of labor to be recorded as the Company's liabilities in Liquidation in the group of liabilities to other Creditors.

(7) In the event that the Liquidation Team has not yet been formed and employee salaries have become due, then with OJK's approval, the Board of Directors may make the salary payments provided that funds for such salary payments are available.

Part Five
Payment of the Company's Liabilities to Policyholders, Insured Parties, or Participants

Article 24
(1) The rights of Policyholders, Insured Parties, or Participants to the distribution of the assets of the Company in Liquidation have a higher position than the rights of other parties.

(2) The Insurance Funds of Insurance Companies and Reinsurance Companies in Liquidation must be used first to fulfill liabilities to Policyholders, Insured Parties, or other parties entitled to insurance benefits.

(3) In the event that Insurance Funds are insufficient to pay all liabilities to Policyholders, Insured Parties, or other parties entitled to insurance benefits, the payment of such liabilities is carried out proportionally.

(4) In the event that after all liabilities to Policyholders, Insured Parties, and other parties entitled to insurance benefits have been fulfilled there is an excess of Insurance Funds, such Insurance Funds may be used to fulfill liabilities to third parties other than Policyholders, Insured Parties, or other parties entitled to insurance benefits.

(5) Investment funds of PAYDI insurance Policyholders can only be used to pay liabilities to the respective Policyholders.

(6) Tabarru' funds and investment funds of Participants of Sharia Insurance Companies or Sharia Reinsurance Companies in Liquidation cannot be used to pay liabilities other than to Participants.

Article 25
(1) In order to pay the rights of Policyholders, Insured Parties, or Participants as referred to in Article 24 paragraph (1), the Liquidation Team of life insurance companies or Sharia life insurance companies in Liquidation must strive to ensure that valid life insurance or Sharia life insurance policies (in force) can continue to be valid by transferring the insurance portfolio to other life insurance or Sharia life insurance companies.

(2) In order to carry out the transfer of the insurance portfolio to other life insurance or Sharia life insurance companies as referred to in paragraph (1), the Liquidation Team must first notify the plan of such transfer to Policyholders, Insured Parties, or Participants.

(3) The transfer of the insurance portfolio as referred to in paragraph (1) must meet the following requirements:
a. carried out at a life insurance or Sharia life insurance company that has the same line of business; and b. does not cause the life insurance or Sharia life insurance company receiving the transfer of the insurance portfolio to violate applicable financial health regulations in the insurance field.

(4) In the event that Policyholders, Insured Parties, or Participants refuse to have their coverage transferred to other life insurance or Sharia life insurance companies, the Liquidation Team returns premiums or contributions in accordance with the remaining coverage period.

Article 26
(1) Payment of policy benefit claims is carried out in full, unless the Company's assets are smaller than the Company's liabilities, in which case payment is carried out proportionally.

(2) In the event that insurance or Sharia insurance coverage that is still valid (in force) at the time of the Revocation of the Business License of the Company is not transferred to another Company, the payment of rights to Policyholders, Insured Parties, or Participants is carried out as follows:
a. for insurance or Sharia insurance policies that do not have a savings element, the amount is calculated proportionally based on the remaining coverage period on the date of the Revocation of the Business License of the Company (unearned premium), after deducting the portion of premiums or contributions that have been paid to insurance broker companies and/or insurance agent commissions; b. for insurance policies that have a savings element, the amount is the cash value at the time of the Revocation of the Business License of the Company;
c. for PAYDI insurance policies:

1. for risk premiums or contributions, the provisions as regulated in letter a apply; and
2. for Participant investment funds, the amount is the net cash value on the date of the Revocation of the Business License of the Company,
   except if the Company's assets are smaller than the Company's liabilities, in which case payment is carried out proportionally.

Article 27
(1) The proceeds from the liquidation of assets other than Insurance Funds or Tabarru’ Funds are used to pay the Company's liabilities to Policyholders, Insured Parties, Participants, or other parties entitled to insurance/Sharia insurance benefits, after deducting owed salaries and Liquidation implementation costs.

(2) Payment of the Company's liabilities to Policyholders, Insured Parties, Participants, or other parties entitled to insurance/Sharia insurance benefits as referred to in paragraph (1) is carried out if Insurance Funds or Tabarru’ Funds are insufficient to pay all liabilities to Policyholders, Insured Parties, Participants, or other parties entitled to insurance/Sharia insurance benefits.

(3) Payment of liabilities to Creditors as referred to in paragraph (1) from the proceeds of asset liquidation can be carried out in stages or at once at the end of the Liquidation period as long as it does not violate other applicable legislation.

(4) Payment of liabilities to Creditors as referred to in paragraph (3) must first obtain OJK's approval.

Article 28
(1) In the event that there is a surplus of Liquidation results after payment of all liabilities of the Company in Liquidation, the surplus of Liquidation results is the right of shareholders or those equivalent to shareholders in legal entities in the form of cooperatives.

(2) The surplus of Liquidation results as referred to in paragraph (1) can only be distributed to shareholders or those equivalent to shareholders in legal entities in the form of cooperatives after the expiration of a 2 (two) year period since the Liquidation process is completed.

(3) Creditors who have not filed claims with the Liquidation Team as referred to in Article 5 paragraph (4) or paragraph (5) may file claims within a period of 2 (two) years since the Liquidation process is completed as referred to in paragraph (2).

(4) Claims as referred to in paragraph (3) are submitted through OJK to shareholders or those equivalent to shareholders in legal entities in the form of cooperatives.

(5) OJK may request the competent agency to block the surplus of Liquidation results that are the rights of shareholders or those equivalent to shareholders in legal entities in the form of cooperatives for the period as referred to in paragraph (2).

(6) Claims as referred to in paragraph (3) are charged against the surplus of Liquidation results which are the rights of shareholders or those equivalent to shareholders in legal entities in the form of cooperatives.

(7) Based on the request of shareholders or those equivalent to shareholders in legal entities in the form of cooperatives, OJK may request the competent agency to lift the blockage of the surplus of Liquidation results by the amount of the claim to pay the verified claims.

(8) If after the period as referred to in paragraph (2) has expired no claims have been submitted through OJK to shareholders or those equivalent to shareholders in legal entities in the form of cooperatives or there are claims but there is still a surplus of Liquidation results, OJK requests the lifting of the blockage from the competent agency over the surplus of Liquidation results to be taken by shareholders or those equivalent to shareholders in legal entities in the form of cooperatives.

Part Six
Settlement of the Company's Assets and Liabilities

Article 29
In order to settle the Company's assets and liabilities as referred to in Article 9 letter c, the Liquidation Team carries out the following actions:
a. appointing a public accountant registered with OJK to audit the Closing Balance Sheet; b. conducting an inventory of assets and liabilities;
c. preparing the Interim Liquidation Balance Sheet;
d. carrying out the liquidation of assets and/or collection of receivables; e. carrying out payment of liabilities to Creditors; and f. depositing the portion not yet taken by Creditors with the court.

Article 30
(1) After receiving the Closing Balance Sheet from OJK, the Liquidation Team appoints a public accountant registered with OJK to audit the Closing Balance Sheet.

(2) The implementation of the audit of the Closing Balance Sheet as referred to in paragraph (1) is carried out referring to the terms of reference prepared by the Liquidation Team.

(3) The terms of reference as referred to in paragraph (2) at least contains the objectives and scope of the audit.

(4) The appointment of a public accountant as referred to in paragraph (1) is carried out within a maximum of 30 (thirty) Days since the Closing Balance Sheet was received by the Liquidation Team.

(5) The Liquidation Team submits the Closing Balance Sheet that has been audited by a public accountant as referred to in paragraph (1) to OJK within a maximum of 90 (ninety) Days since the date of appointment of the public accountant.

Article 31
(1) The Liquidation Team conducts an inventory of assets and liabilities as of the date of the Revocation of the Business License of the Company.

(2) Assets are grouped into non-performing assets and performing assets.

(3) Assets are designated in the performing group if they have legal obstacles in their liquidation caused by, among others:
a. incomplete documents; b. complete documents but the physical existence of the asset is unknown;
c. imperfect encumbrance;
d. assets and/or collateral are not marketable; and/or e. become objects of disputes outside or inside the court.

(4) In order to carry out the inventory of the Company's liabilities to Policyholders, Insured Parties, Participants, or other parties entitled to insurance benefits, the Liquidation Team may appoint an independent actuary.

(5) The results of the inventory of assets and liabilities as referred to in paragraph (1) are used as the basis for the preparation of and are an attachment to the Interim Liquidation Balance Sheet.

Article 32
(1) The Liquidation Team prepares the Interim Liquidation Balance Sheet referring to the guidelines for the preparation of the Interim Liquidation Balance Sheet.

(2) The Liquidation Team submits the Interim Liquidation Balance Sheet to OJK within a maximum of 60 (sixty) Days after the Liquidation Team receives the audited Closing Balance Sheet.

(3) OJK may approve or request amendments to the Interim Liquidation Balance Sheet if it is prepared not in accordance with the guidelines as referred to in paragraph (1) within a maximum of 7 (seven) Days since the Interim Liquidation Balance Sheet was received by OJK.

(4) The Liquidation Team is required to fulfill OJK's request as referred to in paragraph (3) within a maximum of 15 (fifteen) Days since the date of the request for amendment to the Interim Liquidation Balance Sheet by OJK.

(5) The Liquidation Team is required to announce the Interim Liquidation Balance Sheet that has been approved by OJK in 2 (two) Newspapers within a maximum of 7 (seven) Days since the Interim Liquidation Balance Sheet in question was approved by OJK.

(6) Further provisions regarding the guidelines for the preparation of the Interim Liquidation Balance Sheet as referred to in paragraph (1) are regulated in an OJK Circular.

Article 33
(1) The liquidation of non-performing assets as referred to in Article 31 paragraph (2) is carried out after the Interim Liquidation Balance Sheet is approved by OJK.

(2) In the event that the Interim Liquidation Balance Sheet has not been approved by OJK, the liquidation of non-performing assets as referred to in paragraph (1) may be carried out after obtaining approval from OJK.

(3) The liquidation of non-performing assets as referred to in paragraph (1) and paragraph (2) must use fair market prices.

(4) The liquidation of assets and/or collection of receivables is carried out by the Liquidation Team in accordance with the plans and methods contained in the work plan and budget as referred to in Article 21 paragraph (2) letter c.

Article 34
All Liquidation implementation costs listed in the Liquidation cost list become the burden of the assets of the Company in Liquidation and are deducted first from every liquidation result.

Part Seven
Supervision and Reporting of Liquidation Implementation

Article 35
(1) OJK conducts supervision over the implementation of Liquidation.

(2) Supervision of Liquidation implementation as referred to in paragraph (1) is carried out indirectly by analyzing reports submitted by the Liquidation Team to OJK.

(3) In the event deemed necessary, OJK may conduct direct supervision at the Company in Liquidation.

(4) OJK may appoint a public accountant or other party to and on behalf of OJK to conduct direct supervision as referred to in paragraph (3).

Article 36
(1) The Liquidation Team submits a report on the realization of the work plan and budget to OJK every month within a maximum of the 10th (tenth) day of the following month.

(2) If the deadline for submitting the report on the realization of the work plan and budget as referred to in paragraph (1) falls on a holiday, the deadline for submitting the report is the next working day.

(3) The report on the realization of the work plan and budget as referred to in paragraph (1) at least contains:
a. progress of Liquidation activities; b. obstacles to the failure to achieve targets;
c. cash flow report;
d. position of assets that have been liquidated and liabilities that have been settled; e. details of budget realization; and f. obstacles faced and follow-up plans.

Part Eight
Termination of Liquidation

Article 37
Liquidation implementation is completed in the event:
a. all liabilities of the Company in Liquidation have been paid and/or there are no longer assets that can be used to pay liabilities before the end of the implementation period of Liquidation; or b. the end of the implementation period of Liquidation as referred to in Article 15.

Article 38
(1) In the event that Liquidation implementation will end as referred to in Article 15 paragraph (1) and paragraph (2), at least 3 (three) months before the estimated end of Liquidation implementation, the Liquidation Team is required to announce the final payment date to Creditors including follow-up if Creditors do not take their rights within the period until the final payment date.

(2) The final payment date as referred to in paragraph (1) is within a maximum of 30 (thirty) Days since the date of the announcement.

(3) The announcement as referred to in paragraph (1) is carried out in 2 (two) Newspapers.

(4) In the event that Creditors have not taken their rights until the deadline as referred to in paragraph (2), then the funds that are the rights of such Creditors are deposited with the court.

(5) The deposit of funds as referred to in paragraph (4) is carried out within a maximum of 30 (thirty) Days since the payment deadline as referred to in paragraph (2).

(6) The Liquidation Team is stated to have fulfilled the payment of liabilities to the respective Creditors after the deposit of funds that are the rights of Creditors who have not taken them as referred to in paragraph (4).

(7) If within a period of 30 (thirty) years the funds that are the rights of Creditors as referred to in paragraph (4) are not taken by the respective Creditors, then such funds are handed over to the state treasury.

Part Nine
Accountability of the Liquidation Team

Article 39
(1) In the event that the Liquidation Team is formed by GMS as referred to in Article 4 paragraph (1), the Liquidation Team is required to submit the Final Liquidation Balance Sheet to OJK and a report on the accountability of the Liquidation Team's tasks to GMS within a maximum of 10 (ten) Days after the completion of Liquidation implementation.

(2) In the event that the Liquidation Team is formed by OJK as referred to in Article 6 paragraph (1), the Liquidation Team is required to submit the Final Liquidation Balance Sheet and a report on the accountability of the Liquidation Team's tasks to OJK with a copy to shareholders or those equivalent to shareholders in legal entities in the form of cooperatives within a maximum of 10 (ten) Days after the completion of Liquidation implementation.

(3) The accountability report as referred to in paragraph (1) and paragraph (2) at least contains:
a. receipt of Liquidation results; b. Liquidation costs;
c. payment of liabilities to Creditors;
d. remaining cash or cash equivalent assets; e. remaining performing assets; and f. remaining unpaid liabilities.

(4) OJK appoints a public accountant to and on behalf of OJK to audit the Final Liquidation Balance Sheet as referred to in paragraph (1) and paragraph (2).

Article 40
In the event that the Liquidation Team formed by GMS as referred to in Article 4 paragraph (1) has submitted the Final Liquidation Balance Sheet and it has been approved by OJK and the accountability report has been received by GMS, then GMS:
a. requests the Liquidation Team to:

1. announce the end of Liquidation by placing it in the State Gazette of the Republic of Indonesia and in 2 (two) Newspapers;
2. notify the competent agency regarding the removal of the Company's legal entity status; and
3. notify the competent agency to have the Company's name removed from the company list; and
   b. dissolve the Liquidation Team.

Article 41
(1) In the event that the Liquidation Team formed by OJK as referred to in Article 6 paragraph (1) has submitted the Final Liquidation Balance Sheet and accountability report to OJK, OJK decides

accept or not accept the Liquidation Team's accountability report within a maximum of 10 (ten) Days since OJK receives the audit result report as referred to in Article 39 paragraph (4).

(2) In the event that the Liquidation Team's accountability report has been received by OJK, then OJK:
a. requests the Liquidation Team to:

1. announce the end of Liquidation by placing it in the State Gazette of the Republic of Indonesia and in 2 (two) Newspapers;
2. notify the competent agency regarding the deletion of the Company's legal entity status;
3. notify the competent agency, so that the Company's name is removed from the company list; and
4. hand over all Company documents in Liquidation to OJK.
   b. dissolve the Liquidation Team; and
   c. dismiss the inactive Board of Directors, Board of Commissioners, and Sharia Supervisory Board.

(3) Actions as referred to in paragraph (2) letter a are carried out by the Liquidation Team within a maximum of 30 (thirty) Days since the accountability is received by OJK.

(4) In the event that OJK decides not to accept the Liquidation Team's accountability, OJK may:
a. report the Liquidation Team to the competent authorities if the Liquidation Team is suspected of committing:

1. fraud in carrying out the Liquidation process; or
2. criminal acts; or
   b. take other steps in accordance with applicable legislation.

Article 42
The legal entity status of the Company being liquidated ends as of the date of the announcement of the end of Liquidation in the State Gazette of the Republic of Indonesia as referred to in Article 40 letter a number 1 and Article 41 paragraph (2) letter a number 1.

CHAPTER III
CESSATION OF BUSINESS ACTIVITIES
UPON COMPANY REQUEST

Article 43
(1) A Company that ceases its business activities must first report its plan to cease business activities to OJK.

(2) A Company that reports its plan to cease business activities as referred to in paragraph (1) must meet the following requirements:
a. have a low or low-medium risk level and assets owned fall into the group of Companies that only represent a certain amount of the total industry assets in accordance with regulations regarding risk level assessment; and b. have included the plan to cease business activities in the Company's business plan.

(3) The risk level as referred to in paragraph (2) letter a is based on an assessment conducted by OJK.

Article 44
(1) The Company's plan to cease business activities must obtain approval from OJK.

(2) To obtain approval as referred to in paragraph (1), the plan to cease business activities must contain at least the following matters:
a. reasons for ceasing business activities; b. description of the Company's condition, including data regarding the number of in-force policies, number of Policyholders, Insureds, or Participants, number of the Company's obligations to Policyholders, Insureds, or Participants, and other obligations;
c. plan to settle the Company's obligations to all Creditors; and
d. plan for dissolution or other plans after the Company has settled obligations to all Creditors and the Company's business license has been revoked by OJK.

(3) The plan to cease business activities as referred to in Article 44 paragraph (1) must be accompanied by the following documents:
a. original copy of the decision regarding the issuance of the Company's business license or if the original copy is lost, it must be accompanied by a legalized copy of the decision regarding the issuance of the business license and a director's statement that the original copy is lost; b. decision of the General Meeting of Shareholders regarding approval of the Company's plan to cease business activities;
c. the Company's latest financial statements;
d. proof of tax settlement and other obligations to the state; and e. proof of settlement of OJK levies and payable administrative fines.

Article 45
(1) OJK conducts an examination of the plan to cease business activities submitted by the Board of Directors as referred to in Article 44.

(2) Based on the examination results as referred to in paragraph (1), within a maximum period of 30 (thirty) Days since the complete plan to cease business activities is received, OJK issues a letter of approval or a letter of rejection of the plan to cease business activities.

(3) In the event that OJK issues a letter of approval as referred to in paragraph (2), the Company is required to:
a. cease all of the Company's business activities; b. announce the plan to cease business activities and the plan to settle the Company's obligations in a Newspaper for 3 (three) consecutive days within a maximum of 10 (ten) Days since the date of the letter of approval of the plan to cease business activities;
c. settle all of the Company's obligations within a maximum period of 4 (four) months since the date of the letter of approval of the plan to cease business activities; and
d. appoint a public accountant to prepare the final balance sheet including conducting verification to ensure the settlement of all of the Company's obligations.

Article 46
(1) The settlement of the Company's obligations to all Creditors including Policyholders, Insureds, or Participants must not harm or reduce the rights of Creditors including Policyholders, Insureds, or Participants.

(2) In the event that a Company ceasing insurance and reinsurance business with Sharia principles does not have Participants, the existing Tabarru’ Funds must be donated to a social institution based on the consideration of the Sharia Supervisory Board.

(3) In the event that the settlement of obligations to Policyholders, Insureds, or Participants is carried out by transferring the insurance portfolio to another Company, the Company is required to notify the plan to transfer the insurance portfolio to Policyholders, Insureds, or Participants through:
a. announcement of the plan to cease business activities in a Newspaper as referred to in Article 45 paragraph (3) letter b; and b. letters to each Policyholder, Insured, or Participant.

(4) The transfer of the insurance portfolio as referred to in paragraph (3) must meet the following requirements:
a. does not reduce the rights of Policyholders, Insureds, or Participants; b. is carried out on a Company that has the same field of business; and
c. does not cause the Company receiving the transfer of the insurance portfolio to violate applicable regulations in the insurance field.

Article 47
(1) Policyholders, Insureds, or Participants of a Company that will transfer the entire insurance portfolio as referred to in Article 46 paragraph (3) have the right to refuse their coverage being transferred to another Company.

(2) The Company is required to give Policyholders, Insureds, or Participants the opportunity to submit their refusal of the transfer of their coverage to another Company within a period of 1 (one) month since the announcement as referred to in Article 46 paragraph (3).

(3) In the event that Policyholders, Insureds, or Participants refuse their coverage being transferred to another Company, the coverage becomes terminated and the Company is required to return the rights of Policyholders, Insureds, or Participants.

(4) The Company is required to notify the rights of Policyholders, Insureds, or Participants as referred to in paragraph (2) and the consequences of the refusal of the transfer of coverage as referred to in paragraph (3) in the announcement and letter as referred to in Article 46 paragraph (3).

Article 48
The return of the rights of Policyholders, Insureds, or Participants as referred to in Article 47 paragraph (3) is carried out as follows:
a. for insurance or Sharia insurance policies that do not have a savings element, the amount is calculated proportionally based on the remaining coverage period on the date the Policyholder, Insured, or Participant submits the refusal of the transfer of their coverage (unearned premium), after deducting the portion of premiums or contributions paid to the insurance broker and/or agent commissions; b. for insurance policies that have a savings element, the amount is the cash value on the date the Policyholder, Insured, or Participant submits the refusal of the transfer of their coverage;
c. for PAYDI insurance policies:

1. for risk premiums or contributions, the provisions as regulated in letter a apply; and
2. for Participants' investment funds, the amount is the net cash value on the date the Policyholder, Insured, or Participant submits the refusal of the transfer of their coverage.

Article 49
After all of the Company's obligations as referred to in Article 46 are settled, the Board of Directors is required to submit a report to OJK containing at least:
a. implementation of the cessation of the Company's business activities; b. implementation of the announcement as referred to in Article 45 paragraph (3) letter b;
c. implementation of the settlement of the Company's obligations;
d. the Company's final balance sheet audited by an independent auditor; and e. a statement from shareholders or those equivalent to shareholders in a legal entity in the form of a cooperative stating that all of the Company's obligations have been settled and if claims arise in the future, they become the responsibility of the shareholders or those equivalent to shareholders in a legal entity in the form of a cooperative.

Article 50
(1) OJK conducts an examination of the report submitted by the Board of Directors as referred to in Article 49.

(2) Based on the examination results as referred to in paragraph (1), within a maximum period of 30 (thirty) Days since the complete report is received, OJK issues a decision regarding the Revocation of the Company's Business License.

Article 51
As of the date of the Revocation of the Company's Business License as referred to in Article 50 paragraph (2), if unfulfilled Company obligations arise in the future, shareholders or those equivalent to shareholders in a legal entity in the form of a cooperative are responsible for said obligations.

CHAPTER IV
BANKRUPTCY OF COMPANIES

First Section
Requirements and Procedures for Petition for Declaration of Company Bankruptcy

Article 52
(1) A Creditor, based on its assessment that the Company meets the requirements to be declared bankrupt in accordance with the legislation on bankruptcy, may submit a petition to OJK for OJK to submit a petition for the declaration of bankruptcy of the relevant Company to the Commercial Court.

(2) A Company cannot submit a petition for the declaration of bankruptcy for itself.

(3) The petition as referred to in paragraph (1) is submitted in writing in the Indonesian language and signed by the Creditor or its attorney containing at least:
a. Creditor identity, at least including full name and address of the Creditor; b. name of the Company requested to be declared bankrupt by the Commercial Court;
c. description of the grounds for the petition including:

1. jurisdiction of the Commercial Court;
2. legal standing of the Creditor containing a clear description of the Creditor's right to submit the petition; and
3. reasons for the petition for declaration of bankruptcy described clearly and in detail; and
   d. matters requested to be decided by the Commercial Court.

(4) In addition to meeting the provisions in paragraph (3), the petition as referred to in paragraph (1) is accompanied by evidence supporting the petition for the declaration of bankruptcy of the Company, at least consisting of:
a. proof of Creditor identity; b. proof of letters or writings related to the reasons for the petition;
c. list of prospective witnesses and/or experts accompanied by a brief statement about the matters to be explained regarding the reasons for the petition, and a statement of willingness to attend the trial, in the event that the Creditor intends to submit witnesses and/or experts; and
d. list of other evidence which may be information stored in or sent through electronic media, if deemed necessary.

(5) In addition to being submitted in written form, the petition is also submitted in digital format in electronic media in the form of a compact disk or similar.

Article 53
(1) The petition as referred to in Article 52 paragraph (1) is addressed to the Chairman of the Board of Commissioners of OJK with a copy to the Executive Head of Insurance, Pension Funds, Financing Institutions, and Other Financial Service Institutions Supervision of OJK.

(2) OJK examines the petition along with the evidence submitted by the Creditor.

(3) If the petition is incomplete, OJK notifies the Creditor of the completeness of the petition that must be fulfilled, and the Creditor must complete it within a maximum of 10 (ten) Days since the receipt of the notification of incompleteness of the petition.

(4) If the completeness of the petition is not fulfilled within the period as referred to in paragraph (3), the petition is considered withdrawn and subsequently OJK returns the petition documents to the Creditor.

Article 54
(1) OJK approves or rejects the petition to submit a petition for the declaration of bankruptcy of the Company within a maximum of 30 (thirty) Days since the petition is received completely.

(2) Within the period as referred to in paragraph (1), OJK may:
a. request information related to the petition for declaration of bankruptcy from the Creditor, the Company requested to be bankrupt, and/or other parties; and/or b. conduct an examination of the Company.

Article 55
(1) OJK approves or rejects the Creditor's petition to submit a petition for the declaration of bankruptcy of the Company to the Commercial Court by considering:
a. fulfillment of the requirements to be declared bankrupt as regulated in the legislation on bankruptcy; b. fulfillment of the requirements for submitting the petition as referred to in Article 52 paragraph (3);
c. the Company's financial ability to pay debts or obligations;
d. the Company's supervision status; e. the imposition of administrative sanctions on the Company; and f. certain conditions.

(2) In the event that OJK rejects the petition to submit a petition for the declaration of bankruptcy of the Company, OJK submits the rejection of the petition in writing to the Creditor accompanied by the reasons for the rejection.

(3) In the event that OJK rejects the petition as referred to in paragraph (2), OJK may:
a. advise the Creditor to resolve disputes with the Company through alternative dispute resolution institutions or civil courts; b. facilitate out-of-court dispute resolution peacefully; or
c. take other actions that can help resolve disputes.

(4) If OJK approves the petition to submit a petition for the declaration of bankruptcy of the Company, then OJK immediately submits the petition for the declaration of bankruptcy of the Company to the Commercial Court in accordance with the provisions of legislation.

(5) The costs of the petition for declaration of bankruptcy to the Commercial Court are borne by the Creditor.

Article 56
(1) In order to protect consumer interests, OJK may submit a petition for the bankruptcy of the Company to the Commercial Court without a petition from a Creditor.

(2) In submitting the bankruptcy petition as referred to in paragraph (1), OJK considers the matters as referred to in Article 55 paragraph (1) except letter b.

Article 57
(1) Until the decision on the petition for declaration of bankruptcy is pronounced, OJK may submit a petition to the court for:
a. placing a seizure on part or all of the Company's assets; or b. appointing an interim curator to supervise:

1. management of the Company's business; and
2. payments to Creditors, transfer, or pledge of the Company's assets which in Bankruptcy are the authority of the curator.

(2) The Curator as referred to in paragraph (1) is:
a. the Estate Administration Agency; or b. other curators.

(3) In submitting a curator as referred to in paragraph (1) letter b, OJK considers the following matters:
a. independent and does not have a conflict of interest; b. has special expertise in managing and/or settling bankrupt assets;
c. is not currently handling more than 3 (three) Bankruptcy and suspension of debt payment obligation cases;
d. understands regulations regarding insurance; and e. is registered with the ministry whose scope and responsibility are in the field of law and legislation.

Second Section
Implementation and Follow-up on the End of Company Bankruptcy

Article 58
In the event that the assets of the Company declared bankrupt are in a state of insolvency and the bankrupt assets are being settled, the provisions regarding the distribution of the Company's assets in Liquidation as referred to in Article 24 to Article 28 apply mutatis mutandis to the distribution of assets of the Company declared bankrupt.

Article 59
In the event that the settlement of the assets of the Company declared bankrupt has been carried out and the Bankruptcy of the Company ends, OJK revokes the business license of the relevant Company.

CHAPTER V
SANCTIONS

Article 60
Parties who violate the provisions in Article 2 paragraph (1), Article 3 paragraph (1), Article 4 paragraph (1), paragraph (2), paragraph (4), paragraph (7), Article 7, Article 8 paragraph (2), paragraph (3), Article 12 paragraph (1), Article 15 paragraph (1), Article 22 paragraph (3), Article 23 paragraph (5), paragraph (6), Article 32 paragraph (4), paragraph (5), Article 38 paragraph (1), Article 39 paragraph (1), paragraph (2), Article 43 paragraph (1), Article 46 paragraph (2), paragraph (3), Article 47 paragraph (2), paragraph (3), paragraph (4), and Article 49, shall be subject to administrative sanctions in the form of:
a. written warning; and/or b. prohibition from becoming shareholders or those equivalent to shareholders in a legal entity in the form of a cooperative, Board of Directors, Board of Commissioners, or Sharia Supervisory Board on the Company.

CHAPTER VI
CLOSING PROVISIONS

Article 61
This OJK Regulation shall come into force on the date of its promulgation.
To ensure that everyone knows it, order the promulgation of this OJK Regulation by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta on 7 December 2015
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signature
MULIAMAN D. HADAD

Promulgated in Jakarta on 11 December 2015
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signature
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 294 Copy in accordance with the original Legal Director 1 Ministry of Law sign Sudarmaji

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 28 /POJK.05/2015
ABOUT
DISSOLUTION, LIQUIDATION, AND BANKRUPTCY OF INSURANCE COMPANIES, SHARIA INSURANCE COMPANIES, REINSURANCE COMPANIES, AND SHARIA REINSURANCE COMPANIES

I. GENERAL
Law Number 21 of 2011 concerning the Financial Services Authority mandates that the supervisory and regulatory functions over all activities in the financial services sector operating in Indonesia are carried out by OJK. OJK was formed with the goal that all financial services activities are conducted in an orderly, fair, transparent, and accountable manner, and are able to realize a financial system that grows sustainably and stably, as well as able to protect consumer and public interests.

In order to provide protection to consumers and the public, OJK has the authority to take preventive actions against losses to consumers and the public.

One matter of concern to OJK regarding consumer protection is when a financial services institution has its business license revoked and must be dissolved. The dissolution of a financial services institution whose business license has been revoked, including Companies that have the potential to cause problems and ultimately harm consumers, requires optimal legal protection for consumers and the public, particularly Policyholders, Insureds, or Participants. Therefore, a transparent and accountable mechanism in the process of dissolving legal entities and Liquidation needs to be created.

Furthermore, Law Number 40 of 2014 concerning Insurance has regulated OJK's authority to ensure that public interests, particularly Policyholders, Insureds, or Participants, remain protected if a Company's business license is revoked, including by requiring Companies whose business licenses are revoked to immediately carry out Dissolution and Liquidation, and by granting higher rights to Policyholders, Insureds, or Participants than other parties to receive the proceeds from the settlement of the Company's assets when liquidated or bankrupt.

Regarding Company Bankruptcy, to maintain public trust both as users of insurance services and as business actors from the possibility of Companies being easily declared bankrupt given the characteristics of Company business that gather public funds and have many Creditors, OJK as the only party given authority by law to submit a petition for the declaration of Company bankruptcy to the Commercial Court, needs to consider the interests of Creditors as a whole, the development of the insurance industry, and national economic interests in deciding to approve or reject petitions submitted by one or several Creditors, in addition to the requirements as regulated in the legislation on bankruptcy.

II. ARTICLE BY ARTICLE

Article 1
Sufficiently clear.

Article 2
Sufficiently clear.

Article 3
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
What is meant by "responsibility" is the responsibility for the preparation, truthfulness of content, and submission of the Closing Balance Sheet.

Paragraph (4)
Sufficiently clear.

Paragraph (5)
Sufficiently clear.

Paragraph (6)
Sufficiently clear.

Article 4
Sufficiently clear.

Article 5
Sufficiently clear.

Article 6
Paragraph (1)
Letter a
This provision can be carried out by meeting one of the following conditions:

1. The General Meeting of Shareholders cannot be held;
2. The General Meeting of Shareholders can be held but fails to decide on Dissolution and fails to form a Liquidation Team; or
3. The General Meeting of Shareholders can be held and successfully decides on Dissolution but fails to form a Liquidation Team.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Paragraph (5)
Sufficiently clear.

Article 7
Sufficiently clear.

Article 8
Sufficiently clear.

Article 9
Sufficiently clear.

Article 10
Sufficiently clear.

Article 11
Sufficiently clear.

Article 12
Sufficiently clear.

Article 13
Sufficiently clear.

Article 14
Sufficiently clear.

Article 15
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Paragraph (5)
Letter a
Sufficiently clear.

Letter b
What is meant by "other settlement steps in accordance with applicable legislation" includes, among others, settlement through the court.

Article 16
Sufficiently clear.

Article 17
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Letter a
Knowledge and experience in the insurance field relevant in this paragraph include experience as a shareholder or those equivalent to shareholders in a legal entity in the form of a cooperative, member of the Board of Directors, member of the Board of Commissioners, member of the Sharia Supervisory Board, and/or employee of the Company.

Letter b
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 18
Sufficiently clear.

Article 19
Paragraph (1)
Letter a
One example of not carrying out duties well is being unable to be objective in carrying out duties.

Letter b
Sufficiently clear.

Letter c
Sufficiently clear.

Letter d
What is meant by "permanent impediment" is unable to carry out duties or medically estimated unable to carry out duties for more than 6 (six) consecutive months.

Letter e
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Paragraph (4)
Sufficiently clear.

Article 20
Sufficiently clear.

Article 21
Sufficiently clear.

Article 22
Sufficiently clear.

Article 23
Paragraph (1)
What is meant by "accrued salary" is all salaries that have not been paid up to the date of termination of the employment relationship.
Paragraph (2)
It is clear enough.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Paragraph (5)
It is clear enough.
Paragraph (6)
It is clear enough.
Paragraph (7)
The funds for the payment of employees' salaries that have become due originate from the Company's funds, not from the Insurance Fund.

Article 24
Paragraph (1)
What is meant by "rights of Policyholders, Insured Parties, or Participants" are the claims of Policyholders, Insured Parties, or Participants arising from issued policies, including insurance claims. Paragraph (2) It is clear enough. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough. Paragraph (5) It is clear enough. Paragraph (6) It is clear enough.

Article 25
It is clear enough.

Article 26
It is clear enough.

Article 27
Paragraph (1)
What is meant by "costs of Liquidation" are all costs incurred during the implementation of Liquidation as listed in the Liquidation cost list, including among others the honorarium of the Liquidation Team, court case costs, auction costs due, and office operational costs. Paragraph (2) It is clear enough. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough.

Article 28
Paragraph (1)
It is clear enough.
Paragraph (2)
Claims submitted through the OJK are intended to facilitate the collection process, but the OJK does not verify such claims.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Paragraph (5)
What is meant by "competent agency" is the court or other parties granted authority by law to block assets.
Paragraph (6)
It is clear enough.

Article 29
It is clear enough.

Article 30
It is clear enough.

Article 31
It is clear enough.

Article 32
It is clear enough.

Article 33
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
Fair market value can be obtained, among others, based on the results of an independent appraiser's valuation or a self-assessment by the Liquidation Team considering the Taxable Object Value (NJOP). Paragraph (4) It is clear enough.

Article 34
It is clear enough.

Article 35
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
What is meant by "direct supervision" is examination.
Paragraph (4)
What is meant by "other parties" includes among others independent actuaries and appraisers.

Article 36
It is clear enough.

Article 37
It is clear enough.

Article 38
It is clear enough.

Article 39
It is clear enough.

Article 40
It is clear enough.

Article 41
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
It is clear enough.
Paragraph (4)
Letter a
It is clear enough.
Letter b
What is meant by "other steps in accordance with applicable legislation" includes among others settlement through the court.

Article 42
It is clear enough.

Article 43
It is clear enough.

Article 44
It is clear enough.

Article 45
It is clear enough.

Article 46
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
Letter a
It is clear enough.
Letter b
What is meant by "letter" also includes electronic letters.
Paragraph (4)
It is clear enough.

Article 47
It is clear enough.

Article 48
It is clear enough.

Article 49
It is clear enough.

Article 50
It is clear enough.

Article 51
It is clear enough.

Article 52
It is clear enough.

Article 53
It is clear enough.

Article 54
Paragraph (1)
It is clear enough.
Paragraph (2)
Letter a
It is clear enough.
Letter b
Examinations are conducted, among others, to verify debts submitted by Creditors with the notes and/or evidence available at the Company.

Article 55
Paragraph (1)
Given that the Company gathers public funds through insurance premiums, Insurance Companies bear public trust, especially from Policyholders, Insured Parties, or Participants, whose number is relatively large. The trust of Policyholders, Insured Parties, or Participants and business actors is very important to maintain so that it does not decrease or disappear. Efforts to restore public trust are very costly for the economy, so it is very reasonable that bankruptcy efforts against Companies need to be carried out very carefully. Therefore, in deciding to approve or reject a petition for a declaration of bankruptcy of a Company, the OJK does not solely base its decision on the fulfillment of the requirements of having two or more Creditors and not paying at least one debt that has become due and can be collected, but also considers other matters, especially the Company's condition.

Letter a
It is clear enough.
Letter b
It is clear enough.
Letter c
It is clear enough.
Letter d
It is clear enough.
Letter e
It is clear enough.
Letter f
What is meant by "certain conditions" includes among others:

1. economic impact and public trust that may arise as a result of the Company being declared bankrupt;
2. the Company is in a financial rehabilitation state;
3. there are other settlement alternatives; or
4. the OJK will revoke the Company's Business License.

Paragraph (2)
It is clear enough.
Paragraph (3)
It is clear enough.
Paragraph (4)
It is clear enough.
Paragraph (5)
It is clear enough.

Article 56
It is clear enough.

Article 57
It is clear enough.

Article 58
What is meant by "insolvency state" is the state of inability to pay that occurs when the debt matching meeting does not offer a peace plan, the offered peace plan is not accepted, or the approval of peace is rejected based on a decision that has obtained permanent legal force as regulated in the law regarding bankruptcy.

Article 59
The revocation of the Company's Business License needs to be carried out by the OJK given that the Company's assets have been used to pay obligations to Creditors or if there are remaining assets, they are no longer sufficient to meet the provisions of legislation in the field of insurance.

Article 60
It is clear enough.

Article 61
It is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5776