POJK on Fit and Proper Assessment for Key Parties in Non-Bank Financial Service Institutions

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER: 4/POJK.05/2013
CONCERNING
FIT AND PROPER ASSESSMENT FOR KEY PARTIES IN
INSURANCE COMPANIES, PENSION FUNDS, FINANCING COMPANIES, AND GUARANTEE COMPANIES BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: a. that in order to create a healthy non-bank financial industry capable of providing the best services to the community, the non-bank financial industry needs to be managed by boards of directors, boards of commissioners, Sharia supervisory boards, member representative bodies, controlling shareholders, experts, and foreign workers who have integrity, competence, and good financial reputation, which is obtained through fit and proper assessments supported by harmonious and integrated regulations; b. that based on the considerations as referred to in letter a, it is necessary to establish a Financial Services Authority Regulation concerning Fit and Proper Assessment for Key Parties in Insurance Companies, Pension Funds, Financing Companies, and Guarantee 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 2 of 1992 concerning Insurance Business (State Gazette of the Republic of Indonesia Year 1992 Number 13; Supplement to the State Gazette of the Republic of Indonesia Number 3467);
3. Law Number 11 of 1992 concerning Pension Funds (State Gazette of the Republic of Indonesia Year 1992 Number 37; Supplement to the State Gazette of the Republic of Indonesia Number 3477);
4. Presidential Regulation Number 2 of 2008 concerning Guarantee Institutions;
5. Presidential Regulation Number 9 of 2009 concerning Financing Institutions;
DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING FIT AND PROPER ASSESSMENT FOR KEY PARTIES IN INSURANCE COMPANIES, PENSION FUNDS, FINANCING COMPANIES, AND GUARANTEE COMPANIES.

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

1. Insurance Company is a business entity operating in the insurance business sector as referred to in legislation concerning insurance business.
2. Pension Fund is a legal entity that manages and runs a program promising pension benefits as referred to in legislation concerning pension funds.
3. Financing Company is a business entity specifically established to conduct leasing, factoring, consumer financing, and/or credit card business as referred to in legislation concerning financing companies.
4. Guarantee Company is a legal entity operating in the financial field with the main business activity being guarantee provision as referred to in legislation concerning guarantee companies.
5. Board of Directors:
   a. for Insurance Companies, Financing Companies, or Guarantee Companies in the form of a limited liability company, is the board of directors as referred to in legislation concerning limited liability companies; b. for Financing Companies or Guarantee Companies in the form of a cooperative legal entity, is the management as referred to in legislation concerning cooperatives;
   c. for Pension Funds, is the management and/or acting management as referred to in legislation concerning pension funds;
   d. for Insurance Companies in the form of a joint venture legal entity, is the board of directors as referred to in the company's articles of association; e. for Guarantee Companies in the form of a state-owned enterprise legal entity, is the board of directors as referred to in legislation concerning state-owned enterprises; and f. for Guarantee Companies in the form of a regional enterprise legal entity, is the board of directors as referred to in legislation concerning regional enterprises.
6. Board of Commissioners:
   a. for Insurance Companies, Financing Companies, or Guarantee Companies in the form of a limited liability company, is the board of commissioners as referred to in legislation concerning limited liability companies; b. for Financing Companies or Guarantee Companies in the form of a cooperative legal entity, is the supervisors as referred to in legislation concerning cooperatives;
   c. for Pension Funds, is the supervisory board as referred to in legislation concerning pension funds;
   d. for Insurance Companies in the form of a joint venture legal entity, is the board of commissioners as referred to in the company's articles of association; e. for Guarantee Companies in the form of a state-owned enterprise legal entity, is the supervisory board as referred to in legislation concerning state-owned enterprises; and f. for Guarantee Companies in the form of a regional enterprise legal entity, is the supervisory board as referred to in legislation concerning regional enterprises.
7. Sharia Supervisory Board is a supervisor recommended by the National Sharia Council, Indonesian Ulema Council, placed in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies or Sharia units, tasked with supervising business activities to ensure they comply with Sharia principles.
8. Member Representative Body is the highest institution in a legal entity in the form of a joint venture that determines the main policies in the aforementioned joint venture legal entity.
9. Controlling Shareholder is an individual, legal entity, and/or business group that:
   a. owns shares or capital in Insurance Companies, Financing Companies, or Guarantee Companies amounting to 25% (twenty-five percent) or more of the issued shares and having voting rights; or b. owns shares or capital in Insurance Companies, Financing Companies, or Guarantee Companies less than 25% (twenty-five percent) of the issued shares and having voting rights, but the party concerned can prove to have exercised control over the Insurance Company, Financing Company, or Guarantee Company, either directly or indirectly.
10. Expert is an individual who has specific qualifications and/or expertise and is appointed as an Expert in the Insurance Company, Pension Fund, Financing Company, or Guarantee Company where they work.
11. Foreign Worker is a foreign citizen holding a visa for the purpose of working in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies in Indonesia.
12. General Meeting of Shareholders, hereinafter abbreviated as GMS:
    a. for Insurance Companies, Financing Companies, or Guarantee Companies in the form of a limited liability company, is the GMS as referred to in legislation concerning limited liability companies; b. for Financing Companies or Guarantee Companies in the form of a cooperative legal entity, is the member meeting as referred to in legislation concerning cooperatives;
    c. for Pension Funds, is the founder as referred to in legislation concerning pension funds;
    d. for Insurance Companies in the form of a joint venture legal entity, is the member meeting as referred to in the company's articles of association; e. for Guarantee Companies in the form of a state-owned enterprise legal entity, is the GMS as referred to in legislation concerning state-owned enterprises; and f. for Guarantee Companies in the form of a regional enterprise legal entity, is the GMS as referred to in legislation concerning regional enterprises.
13. Financial Services Authority, hereinafter abbreviated as OJK, is an independent institution free from the interference of other parties that has the function, duties, and authority for regulation, supervision, examination, and investigation, as referred to in legislation concerning the financial services authority.

CHAPTER II
PARTIES REQUIRED TO UNDERGO FIT AND PROPER ASSESSMENT
Article 2
(1) Fit and proper assessment is conducted by OJK against parties that manage, supervise, and/or have significant influence on Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies. (2) The parties as referred to in paragraph (1), hereinafter referred to as Key Parties, include:
a. members of the Board of Directors; b. members of the Board of Commissioners;
c. members of the Sharia Supervisory Board;
d. members of the Member Representative Body; e. Controlling Shareholders; f. Experts; or g. Foreign Workers.
Article 3
(1) Key Parties must pass the fit and proper assessment before carrying out their duties and functions.
(2) Fit and proper assessment against Key Parties as referred to in paragraph (1) is conducted at:
a. the time of nomination as Key Parties; b. the time of expiration of the validity period of the determination of the fit and proper assessment results; or
c. any time for the purpose of re-assessment of fit and proper.
Article 4
(1) Fit and proper assessment conducted against parties nominated as Key Parties as referred to in Article 3 paragraph (2) letter a includes:
a. parties who will become members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, or members of the Member Representative Body; b. parties who will become Controlling Shareholders;
c. parties who will become Experts; and
d. parties who will become Foreign Workers.
(2) Fit and proper assessment against Key Parties as referred to in Article 3 paragraph (2) letter a is exempted for:
a. the Chief Director in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies who will be re-appointed as members of the Board of Directors in the same company; b. members of the Board of Directors in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies who will be appointed as members of the Board of Directors in the same company;
c. the Chief Commissioner in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies who will be re-appointed as members of the Board of Commissioners in the same company; and
d. members of the Board of Commissioners in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies who will be re-appointed as members of the Board of Commissioners in the same company.
Article 5
(1) In the event that a Controlling Shareholder is a legal entity, the fit and proper assessment is conducted by assessing the legal entity concerned represented by the Chief Director or an official at the same level. (2) The party representing the Controlling Shareholder as referred to in paragraph (1) must submit administrative requirements as referred to in Article 9 paragraph (2) letter a.

CHAPTER III
ASSESSMENT FACTORS IN FIT AND PROPER ASSESSMENT
Article 6
(1) Fit and proper assessment is conducted to assess that Key Parties as referred to in Article 3 paragraph (2) meet the requirements with the following assessment factors:
a. for members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, members of the Member Representative Body, Experts, and/or Foreign Workers include:

1. competence;
2. integrity; and
3. financial reputation.
   b. for Controlling Shareholders include:
4. integrity; and
5. financial reputation.
   (2) Assessment of the competence factor as referred to in paragraph (1) letter a number 1 includes the following criteria:
   a. adequate and relevant knowledge with their position; b. understanding of legislation in the non-bank financial industry sector and/or other related legislation;
   c. experience and expertise in the non-bank financial industry sector and/or other fields relevant to their position; and
   d. ability to conduct strategic management in the development of a healthy non-bank financial industry business.
   (3) Assessment of the integrity factor as referred to in paragraph (1) letter a number 2 and letter b number 1 includes the following criteria:
   a. never committed criminal acts in the financial services business and/or economic sectors; b. never sentenced for criminal offenses based on a court decision within a period of up to 5 (five) years prior to the fit and proper assessment;
   c. never violated commitments agreed upon with the supervising and regulating agencies of the financial services business;
   d. never committed acts that provided unjust benefits to shareholders, members of the Board of Directors, members of the Board of Commissioners, members of the Member Representative Body, employees, and/or other parties that could harm or reduce the rights of policyholders, consumers, and/or participants; e. never violated prudential principles in the financial services business sector; f. not listed in the List of Unfit (DTL) in the banking sector; g. never committed acts outside their authority or beyond their authority; h. never declared incapable of exercising their authority; and
   i. never violated legislation in the non-bank financial industry sector.
   (4) Assessment of the financial reputation factor as referred to in paragraph (1) letter a number 3 includes the following criteria:
   a. does not have non-performing loans; b. never declared bankrupt and never became a shareholder, member of the Board of Directors, member of the Board of Commissioners, or member of the Member Representative Body who was declared guilty causing a company to be declared bankrupt based on a court decision within the last 5 (five) years prior to the fit and proper assessment; and
   c. never involved in money laundering criminal acts.
   (5) Assessment of the financial reputation factor as referred to in paragraph (1) letter b number 2 includes the following criteria:
   a. has financial capability that can support business development; b. has a commitment of willingness to undertake necessary efforts if the company faces capital and liquidity difficulties;
   c. does not have non-performing loans;
   d. never declared bankrupt and never became a shareholder, member of the Board of Directors, member of the Board of Commissioners, or member of the Member Representative Body who was declared guilty causing a company to be declared bankrupt based on a court decision within the last 5 (five) years prior to the fit and proper assessment; and e. never involved in money laundering criminal acts.

CHAPTER IV
FIT AND PROPER ASSESSMENT FOR KEY PARTIES
Section One
Assessment Application
Article 7
(1) Implementation of fit and proper assessment against Key Parties as referred to in Article 3 paragraph (2) letter a must be based on a written application from the Board of Directors to OJK. (2) Implementation of fit and proper assessment against Key Parties as referred to in Article 3 paragraph (2) letter b must be based on a written application from the Board of Directors to OJK. (3) The written application as referred to in paragraph (2) must be submitted at the latest 3 (three) months before the expiration of the validity period of the determination of the fit and proper assessment results. (4) Implementation of re-assessment of fit and proper as referred to in Article 3 paragraph (2) letter c is conducted when, based on the results of analysis and/or OJK examination results, Key Parties are suspected or reasonably suspected of no longer meeting the factors as referred to in Article 6.
Article 8
Submission of written applications for fit and proper assessment as referred to in Article 7 paragraph (1) and paragraph (2) must state the number of Key Parties according to the positions to be filled.
Article 9
(1) The written application as referred to in Article 7 paragraph (1) and paragraph (2) must use the format according to Appendix I which is an integral part of this OJK Regulation.
(2) For members of the Board of Directors, members of the Board of Commissioners, or members of the Member Representative Body, the application as referred to in paragraph (1) must be accompanied by the following documents:
a. curriculum vitae according to the format in Appendix II.a which is an integral part of this OJK Regulation, attached with documents:

1. photocopy of identity card (KTP) or valid passport;
2. photocopy of tax identification number (NPWP);
3. letter of work experience; and
4. 2 (two) sheets of latest color passport photos with size 4x6 cm.
   b. statement letter from members of the Board of Directors, members of the Board of Commissioners, or members of the Member Representative Body according to the format in Appendix III which is an integral part of this OJK Regulation. (3) For members of the Sharia Supervisory Board, the application as referred to in paragraph (1) must be accompanied by the following documents:
   a. curriculum vitae according to the format in Appendix II.a which is an integral part of this OJK Regulation, attached with documents:
5. photocopy of KTP or valid passport;
6. photocopy of NPWP;
7. photocopy of recommendation from the National Sharia Council, Indonesian Ulema Council; and
8. 2 (two) sheets of latest color passport photos with size 4x6 cm.
   b. statement letter from members of the Sharia Supervisory Board according to the format in Appendix III which is an integral part of this OJK Regulation.
   (4) For Controlling Shareholders, the application as referred to in paragraph (1) must be accompanied by the following documents:
   a. Individual Controlling Shareholder:
9. curriculum vitae according to the format in Appendix II.a which is an integral part of this OJK Regulation, attached with documents:
   a) photocopy of KTP or valid passport; b) photocopy of NPWP; and c) 2 (two) sheets of latest color passport photos with size 4x6 cm.
10. statement letter from individual Controlling Shareholder according to the format in Appendix III which is an integral part of this OJK Regulation.
    b. Legal Entity or Business Group Controlling Shareholder:
11. latest audited annual financial report by a public accountant;
12. company questionnaire according to the format in Appendix II.b which is an integral part of this OJK Regulation, attached with documents:
    a) deed of establishment of the legal entity, including the latest amendment to the articles of association approved by the competent authority, including for foreign business entities according to the regulations in the country of origin; and b) photocopy of the legal entity's NPWP;
13. statement letter from the Board of Directors of the legal entity Controlling Shareholder or business group according to the format in Appendix III which is an integral part of this OJK Regulation.
    (5) For Experts, the application as referred to in paragraph (1) must be accompanied by the following documents:
    a. curriculum vitae according to the format in Appendix II.a which is an integral part of this OJK Regulation, attached with documents:
14. photocopy of KTP or valid passport;
15. photocopy of NPWP;
16. letter of work experience; and
17. 2 (two) sheets of latest color passport photos with size 4x6 cm.
    b. statement letter from the Expert according to the format in Appendix III which is an integral part of this OJK Regulation.
    (6) For Foreign Workers, the application as referred to in paragraph (1) must be accompanied by the following documents:
    a. curriculum vitae according to the format in Appendix II.a which is an integral part of this OJK Regulation, attached with documents:
18. photocopy of valid passport;
19. letter of work experience; and
20. 2 (two) sheets of latest color passport photos with size 4x6 cm.
    b. statement letter from Foreign Workers according to the format in Appendix III which is an integral part of this OJK Regulation.

Section Two
Assessment Procedure
Article 10
(1) Fit and proper assessment against Key Parties as referred to in Article 3 paragraph (2) letter a and letter b is implemented by:
a. administrative review; and b. interview.
(2) Fit and proper assessment against Key Parties as referred to in Article 3 paragraph (2) letter c is implemented by:
a. data and information verification; and b. interview.
Article 11
(1) Key Parties must attend the interview implementation as referred to in Article 10 paragraph (1) letter b or paragraph (2) letter b through direct face-to-face meeting at the OJK office or another place designated by OJK. (2) In the event that the Controlling Shareholder is the Central Government or Regional Government, the interview implementation as referred to in Article 10 paragraph (1) letter b is conducted if deemed necessary by OJK.
Article 12
Further provisions regarding the implementation of fit and proper assessment are regulated in an OJK Circular.
Article 13
(1) Fit and proper assessment as referred to in Article 10 is implemented by a fit and proper assessment examiner team formed by OJK.
(2) Formation of the fit and proper assessment examiner team as referred to in paragraph (1) is further regulated by an OJK Commissioners Regulation.
(3) Guidelines for fit and proper assessment as referred to in paragraph (1) are further regulated by an OJK Commissioners Regulation.
Article 14
In the implementation of fit and proper assessment as referred to in Article 10, OJK may request information and/or recommendation letters for Key Parties from other competent parties.
Article 15
(1) OJK notifies the schedule for the implementation of fit and proper assessment to Key Parties, at the latest 10 (ten) days after the documents as referred to in Article 9 paragraph (2), paragraph (3), paragraph (4), paragraph (5), or paragraph (6) are received by OJK completely and correctly. (2) OJK notifies the schedule for the implementation of re-assessment of fit and proper to Key Parties, after the results of analysis and/or OJK examination results as referred to in Article 7 paragraph (4) are established.
Article 16
(1) Interviews as referred to in Article 10 paragraph (1) letter b and paragraph (2) letter b are conducted in Indonesian.
(2) Key Parties who cannot speak Indonesian must provide their own interpreter services during the interview implementation.
Article 17
(1) Key Parties who cannot attend the interview as referred to in Article 11 paragraph (1) must submit written notification accompanied by valid reasons to OJK at the latest 2 (two) days before the implementation of the fit and proper assessment. (2) Based on...

(2) Based on the written notification as referred to in paragraph (1), OJK may provide 1 (one) opportunity for an interview and convey a new schedule for the implementation of the interview to the Key Party.

(3) In the event that, based on the written notification as referred to in paragraph (1), OJK does not provide an interview opportunity to the Key Party, or the Key Party does not appear for the implementation of the interview according to the new schedule without notification, OJK cancels the implementation of the competence and fit and properness assessment of the Key Party.

(4) OJK conveys notification of rejection against the Key Party's application if the reason for absence as referred to in paragraph (3) is not accepted, or if the Key Party does not convey notification regarding their absence in the interview as referred to in Article 11 paragraph (1).

(5) In the event that the Key Party as referred to in Article 3 paragraph (2) letter b and letter c does not appear for the implementation of the interview without accompanying notification, or with notification but the reason for absence is not accepted by OJK, then OJK determines that the Key Party does not pass the competence and fit and properness requirements.

(6) A Key Party whose application is rejected as referred to in paragraph (4) may only be requested again for a competence and fit and properness assessment at the earliest 1 (one) year after the date of the rejection notification by OJK.

Part Three
Results of Assessment and Implementation of Assessment Results

Article 18

(1) OJK determines the results of the competence and fit and properness assessment as referred to in Article 10 with 2 (two) predicates, namely:
a. pass; or b. fail.

(2) OJK determines the results of the competence and fit and properness assessment as referred to in paragraph (1) within a maximum of 60 (sixty) days after the application documents as referred to in Article 9 paragraph (2), paragraph (3), paragraph (4), paragraph (5), and paragraph (6) are received completely and correctly.

(3) OJK notifies the results of the competence and fit and properness assessment as referred to in paragraph (2) to the Board of Directors that submitted the competence and fit and properness test application in writing.

(4) The results of the competence and fit and properness assessment as referred to in paragraph (1) letter a are valid for 5 (five) years calculated from the date determined by OJK.

(5) The validity period of the competence and fit and properness assessment results as referred to in paragraph (4) does not apply to Controlling Shareholders.

(6) The Board of Directors of a Key Party whose application is rejected as referred to in paragraph (1) letter b may submit a new application at the earliest 1 (one) year calculated from the date the competence and fit and properness assessment results are determined by OJK.

Article 19

(1) Members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, members of the Representative Body of Members, Experts, or Foreign Workers as referred to in Article 3 paragraph (2) letter a, who pass the competence and fit and properness assessment, must be appointed in their positions no later than 3 (three) months from the date the competence and fit and properness assessment results are determined.

(2) In the event that after the expiration of the time limit as referred to in paragraph (1), the Key Party who passed the competence and fit and properness assessment has not yet been appointed, then the Board of Directors must notify OJK of the reasons for the non-appointment of the said Key Party.

(3) Based on the notification as referred to in paragraph (2), OJK may consider extending the appointment time limit or determining other actions.

(4) In the event that OJK grants an extension of the appointment time limit or determines other actions as referred to in paragraph (3), OJK notifies the Board of Directors.

(5) Members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, members of the Representative Body of Members, Experts, or Foreign Workers as referred to in Article 3 paragraph (2) letter b and letter c, who pass the competence and fit and properness assessment, may continue their duties and functions in their positions.

Article 20

(1) Members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, members of the Representative Body of Members, Experts, or Foreign Workers as referred to in Article 3 paragraph (2) letter a, who do not pass the competence and fit and properness assessment, are prohibited from being appointed in their positions.

(2) Members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, members of the Representative Body of Members, Experts, or Foreign Workers as referred to in Article 3 paragraph (2) letter b and letter c, who do not pass the competence and fit and properness assessment, must be dismissed from their positions.

(3) Parties who will become Controlling Shareholders in Insurance Companies, Financing Companies, and Guarantee Companies as referred to in Article 3 paragraph (2) letter a, who do not pass the competence and fit and properness assessment, cannot become Controlling Shareholders.

(4) Controlling Shareholders in Insurance Companies, Financing Companies, and Guarantee Companies as referred to in Article 3 paragraph (2) letter a and letter c, who do not pass the competence and fit and properness assessment, are subject to the following provisions:
a. prohibited from taking actions as a Controlling Shareholder in Insurance Companies, Financing Companies, and/or Guarantee Companies; b. transferring part of their shares to other parties so that they no longer meet the criteria as a Controlling Shareholder within a maximum time limit of 2 (two) years calculated from the date the competence and fit and properness assessment results are determined.

CHAPTER V
SUSTAINABILITY REQUIREMENTS

Article 21

(1) Members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, members of the Representative Body of Members, Experts, or Foreign Workers in Insurance Companies, Pension Funds, Financing Companies, and/or Guarantee Companies who pass the competence and fit and properness assessment must meet sustainability requirements at least 1 (one) time within a 1 (one) year period.

(2) The fulfillment of sustainability requirements as referred to in paragraph (1) must be done by:
a. attending seminars, workshops, or other similar activities; b. attending courses, training, or similar education programs;
c. writing papers, articles, or other written works that are published; or
d. becoming a speaker in activities as referred to in letter a, becoming a teacher, or becoming an instructor in activities as referred to in letter b.

(3) The material of activities as referred to in paragraph (2) must be in the field of the financial industry.

(4) Activities as referred to in paragraph (1) and paragraph (2) letter a, letter b, and letter d, must be organized by:
a. financial services supervisory agencies inside and outside the country; b. financial services institutions associations inside and outside the country;
c. universities inside and outside the country; or
d. training institutions that have obtained permits from competent agencies.

(5) Certificate evidence or other evidence showing that the Key Party has met the sustainability requirements must be submitted to OJK no later than 1 (one) month after the annual period ends.

(6) In the event that after the annual period ends, the sustainability requirements cannot be met by the Key Party as referred to in paragraph (1), the fulfillment of the sustainability requirements as regulated in paragraph (2) must be done at least 2 (two) times in the following year.

(7) In the event that the Key Party does not meet the sustainability requirements as referred to in paragraph (1) and paragraph (6), they must undergo the competence and fit and properness assessment process again.

CHAPTER VI
OTHER PROVISIONS

Article 22

(1) The results of the competence and fit and properness assessment are confidential and are administered and used by OJK in the implementation of regulatory and supervisory duties for Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies.

(2) In the event that the Key Party notifies the results of the competence and fit and properness assessment to other parties, then all legal consequences arising are the full responsibility of the relevant party.

Article 23

(1) For Key Parties who have passed the competence and fit and properness assessment before the implementation of this OJK Regulation, and still hold office or work in Insurance Companies, Pension Funds, or Financing Companies at the time this OJK Regulation comes into force, the competence and fit and properness assessment results of such Key Parties are declared still valid.

(2) Key Parties including:
a. members of the Sharia Supervisory Board, members of the Representative Body of Members, Controlling Shareholders, Experts, or Foreign Workers in Insurance Companies; b. members of the Board of Directors and members of the Board of Commissioners in Pension Funds;
c. members of the Sharia Supervisory Board, Controlling Shareholders, or Foreign Workers in Financing Companies; and
d. members of the Board of Directors, members of the Board of Commissioners, members of the Sharia Supervisory Board, or Controlling Shareholders in Guarantee Companies; who still hold office or work in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies and have never participated in the competence and fit and properness assessment at the time this OJK Regulation comes into force, are declared to have passed the competence and fit and properness assessment calculated from the implementation of this OJK Regulation.

(3) The Board of Directors of Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies must submit a letter of application for the determination of passing, accompanied by the minutes of the General Meeting of Shareholders and/or appointment letter as a Key Party as referred to in paragraph (2) to OJK no later than 3 (three) months from the implementation of this OJK Regulation.

(4) OJK must issue a determination of passing the competence and fit and properness assessment for Key Parties as referred to in paragraph (2) no later than 60 (sixty) days since the receipt of the application letter from the Board of Directors.

(5) The passing of the competence and fit and properness assessment for Key Parties, except Controlling Shareholders as referred to in paragraph (1) and paragraph (2), is valid for 5 (five) years calculated from the implementation of this OJK Regulation.

Article 24
Applications for competence and fit and properness assessments that have been submitted to OJK before the implementation of this OJK Regulation and have not yet been processed, follow the provisions in this OJK Regulation.

CHAPTER VII
SANCTIONS

Article 25

(1) Insurance Companies, Financing Companies, or Guarantee Companies that commit violations against the provisions as referred to in Article 19 paragraph (1), paragraph (2), Article 20, and/or Article 21 paragraph (5) are subject to administrative sanctions in the form of:
a. written warning; b. suspension of business activities; or
c. revocation of business license.

(2) Written warnings as referred to in paragraph (1) letter a apply each for a period of 60 (sixty) days from the date the written warning letter is determined.

(3) In the event that before the expiration of the time limit for written warnings as referred to in paragraph (2), Insurance Companies, Financing Companies, or Guarantee Companies have met the provisions, the written warning ends automatically.

(4) In the event that after being given written warnings 3 (three) times consecutively, Insurance Companies, Financing Companies, or Guarantee Companies still do not meet the provisions, OJK determines sanctions for the suspension of business activities.

(5) The suspension of business activities as referred to in paragraph (1) letter b is issued in writing and is valid for a period of 6 (six) months from the date the suspension of business activities letter is determined.

(6) During the suspension of business activities as referred to in paragraph (4), Insurance Companies, Financing Companies, or Guarantee Companies:
a. are prohibited from issuing new products and/or services; and b. are responsible for settling all obligations that have been carried out.

(7) In the event that before the expiration of the time limit for the suspension of business activities as referred to in paragraph (4), Insurance Companies, Financing Companies, or Guarantee Companies have met the provisions, OJK revokes the suspension of business activities sanctions.

(8) In the event that by the end of the time limit for the suspension of business activities as referred to in paragraph (4), Insurance Companies, Financing Companies, or Guarantee Companies still do not meet the provisions, OJK revokes the business licenses of Insurance Companies, Financing Companies, or Guarantee Companies.

Article 26

(1) Pension Funds that commit violations against the provisions as referred to in Article 19 paragraph (1), paragraph (2), Article 20, and/or Article 21 paragraph (5) are subject to administrative sanctions in the form of:
a. written warning; or b. issuance of written orders to the Founder to replace the Board of Directors.

(2) Written warnings as referred to in paragraph (1) letter a apply each for a period of 60 (sixty) days from the date the written warning letter is determined.

(3) In the event that before the expiration of the time limit for written warnings as referred to in paragraph (2), Pension Funds have met the provisions, the written warning ends automatically.

(4) In the event that after being given written warnings 3 (three) times consecutively, Pension Funds still do not meet the provisions, OJK issues written orders to the Founder to replace the Board of Directors.

Article 27
At the time this OJK Regulation comes into force, provisions regarding the Assessment of Competence and Fit and Properness for Key Parties in Insurance Companies, Pension Funds, Financing Companies, or Guarantee Companies are subject to this OJK Regulation.

Article 28
This OJK Regulation comes into force on the date it is enacted.

To ensure that everyone knows it, ordering the enactment of this OJK Regulation by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta on 21 November 2013

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY,

Signed,
MULIAMAN D. HADAD

Enacted in Jakarta on 23 December 2013

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

Signed,
AMIR SYAMSUDIN

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2013 NUMBER 231

Copy in accordance with the original
HEAD OF LEGAL ASSISTANCE DIVISION
LAW DIRECTORATE,

Signed,
MUFLI ASMAWIDJAJA