POJK on the Business Operation of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 69 /POJK.05/2016
ON
THE BUSINESS OPERATION OF INSURANCE COMPANIES, SHARIA INSURANCE COMPANIES, REINSURANCE COMPANIES, AND SHARIA REINSURANCE COMPANIES BY THE GRACE OF THE ALMIGHTY GOD THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that to implement the provisions of Article 5 paragraph (3),
Article 18 paragraph (4), Article 26 paragraph (2), Article 28 paragraph (6), Article
29 paragraph (5), Article 31 paragraph (5), and Article 39 paragraph (3) of Law Number 40 of 2014 concerning Insurance, it is necessary to establish a Financial Services Authority Regulation on the Business Operation of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies; Considering: 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

DECIDING:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION ON THE BUSINESS OPERATION 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 meant as:

Company means insurance company, Sharia insurance company, reinsurance company, and Sharia reinsurance company.
Insurance Company means general insurance company and life insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
Sharia Insurance Company means Sharia general insurance company and Sharia life insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
General Insurance Business is a risk coverage service business that provides compensation to the insured or policyholder for losses, damages, costs incurred, lost profits, or legal liability to third parties that may be suffered by the insured or policyholder due to the occurrence of an uncertain event, as referred to in Law Number 40 of 2014 concerning Insurance.
Life Insurance Business is a business that provides risk mitigation services by paying benefits to the policyholder, insured, or other entitled parties in the event of the insured's death or survival, or other payments to the policyholder, insured, or other entitled parties at a specific time as regulated in the agreement, the amount of which has been determined and/or based on the results of fund management, as referred to in Law Number 40 of 2014 concerning Insurance.
Reinsurance Business is a re-coverage service business against risks faced by insurance companies, guarantee companies, or other reinsurance companies, as referred to in Law Number 40 of 2014 concerning Insurance.
Sharia General Insurance Business is a risk management business based on Sharia principles for mutual assistance and protection by providing compensation to participants or policyholders for losses, damages, costs incurred, lost profits, or legal liability to third parties that may be suffered by participants or policyholders due to the occurrence of an uncertain event, as referred to in Law Number 40 of 2014 concerning Insurance.
Sharia Life Insurance Business is a risk management business based on Sharia principles for mutual assistance and protection by providing payments based on the death or survival of participants, or other payments to participants or other entitled parties at a specific time as regulated in the agreement, the amount of which has been determined and/or based on the results of fund management, as referred to in Law Number 40 of 2014 concerning Insurance.
Sharia Reinsurance Business is a risk management business based on Sharia principles against risks faced by Sharia Insurance Companies, Sharia guarantee companies, or other Sharia reinsurance companies, as referred to in Law Number 40 of 2014 concerning Insurance.
General Insurance Company is a company that conducts General Insurance Business.
Life Insurance Company is a company that conducts Life Insurance Business.
Sharia General Insurance Company is a company that conducts Sharia General Insurance Business.
Sharia Life Insurance Company is a company that conducts Sharia Life Insurance Business.
Reinsurance Company is a company that conducts Reinsurance Business.
Sharia Reinsurance Company is a company that conducts Sharia Reinsurance Business.
Insurance Brokerage Company is a company that conducts consulting and/or intermediary services in closing insurance or Sharia insurance contracts and handling claim settlements, acting on behalf of and for the benefit of policyholders, insured, or participants.
Reinsurance Brokerage Company is a company that conducts consulting and/or intermediary services in placing reinsurance or Sharia reinsurance and handling claim settlements, acting on behalf of and for the benefit of Insurance Companies, Sharia Insurance Companies, guarantee companies, Sharia guarantee companies, Reinsurance Companies, or Sharia Reinsurance Companies that place reinsurance or Sharia reinsurance.
Ceding Company means:
a. General Insurance Company that transfers part of its risk to a Reinsurance Company or another General Insurance Company; b. Sharia General Insurance Company that transfers part of its risk to a Sharia Reinsurance Company, Sharia unit within a Reinsurance Company, another Sharia General Insurance Company, or Sharia unit within a General Insurance Company;
c. Sharia unit within a General Insurance Company that transfers part of its risk to a Sharia Reinsurance Company, Sharia unit within a Reinsurance Company, another Sharia General Insurance Company, or Sharia unit within another General Insurance Company;
d. Life Insurance Company that transfers part of its risk to a Reinsurance Company; e. Sharia Life Insurance Company that transfers part of its risk to a Sharia Reinsurance Company or Sharia unit within a Reinsurance Company; f. Sharia unit within a Life Insurance Company that transfers part of its risk to a Sharia Reinsurance Company or Sharia unit within a Reinsurance Company; g. guarantee company that transfers part of its risk to a Reinsurance Company; or h. Sharia guarantee company or Sharia unit within a guarantee company that transfers part of its risk to a Sharia Reinsurance Company or Sharia unit within a Reinsurance Company.
Sharia Principles are Islamic legal principles in insurance activities based on fatwas issued by institutions having authority in issuing fatwas in the field of Sharia, as referred to in Law Number 40 of 2014 concerning Insurance.
Sharia Unit is a working unit at the head office of an Insurance Company or Reinsurance Company that functions as the head office of branches outside the head office conducting business based on Sharia Principles.
Insurance Products Linked to Investment, hereinafter referred to as PAYDI, are insurance products that provide at least protection against the risk of death, and provide benefits referring to the investment results of a fund pool specifically formed for insurance products, whether expressed in unit form or non-unit form.
Credit Insurance is a General Insurance Business line that provides assurance of financial obligation fulfillment by the credit recipient if the credit recipient is unable to fulfill obligations according to the credit agreement.
Suretyship is a General Insurance Business line that provides assurance of the principal's ability to fulfill obligations according to the main agreement between the principal and the obligee.
Premium is an amount of money determined by the Insurance Company or Reinsurance Company and approved by the policyholder to be paid based on an insurance or reinsurance agreement, or an amount of money determined based on statutory regulations underlying mandatory insurance programs to obtain benefits as referred to in Law Number 40 of 2014 concerning Insurance.
Insurance Agent is an individual who works alone or for a business entity, acting on behalf of and for the benefit of an Insurance Company or Sharia Insurance Company, meeting requirements to represent the Insurance Company or Sharia Insurance Company in marketing insurance or Sharia insurance products, as referred to in Law Number 40 of 2014 concerning Insurance.
Tabarru’ Fund is a pool of funds originating from contributions from participants, the usage mechanism of which is in accordance with Sharia insurance or Sharia reinsurance agreements, as referred to in Law Number 40 of 2014 concerning Insurance.
Tanahud Fund is a pool of funds originating from Tanahud contributions, investment results of the Tanahud Fund, qardh (interest-free loan) from the Company to the Tanahud Fund, and/or Tanahud funds from the reinsurer, the usage of which is in accordance with Sharia annuity agreements for pension programs or Sharia reinsurance agreements for Sharia annuity pension programs.
Tanahud Hibah Agreement is an agreement for a portion of funds from participants individually to participants collectively to form the Tanahud Fund in Sharia annuity products for pension programs.
Participant Investment Fund is an investment fund originating from participant contributions in PAYDI, managed by the Sharia Insurance Company or Sharia Unit within the Insurance Company according to the agreed agreement.
Agreement is a written contract containing specific agreements, along with the rights and obligations of the parties according to Sharia Principles.
Tabarru’ Agreement is a Hibah (gift) agreement in the form of fund contributions from one participant to the Tabarru’ Fund for the purpose of mutual assistance among participants, which is not commercial in nature and not for commercial purposes.
Tijarah Agreement is an Agreement between participants collectively or individually and the Sharia Insurance Company, Sharia Reinsurance Company, or Sharia Unit for commercial purposes.
Wakalah bil Ujrah Agreement is a Tijarah Agreement that grants authority to the Sharia Insurance Company, Sharia Reinsurance Company, or Sharia Unit as the participant's representative to manage the Tabarru’ Fund and/or Participant Investment Fund, according to the granted authority or power, with compensation in the form of ujrah (fee).
Mudharabah Agreement is a Tijarah Agreement that grants authority to the Sharia Insurance Company, Sharia Reinsurance Company, or Sharia Unit as the mudharib (fund manager) to manage the investment of the Tabarru’ Fund and/or Participant Investment Fund, according to the granted authority or power, with compensation in the form of profit sharing (nisbah) the amount of which has been previously agreed upon.
Mudharabah Musytarakah Agreement is a Tijarah Agreement that grants authority to the Sharia Insurance Company, Sharia Reinsurance Company, or Sharia Unit as the mudharib (fund manager) to manage the investment of the Tabarru’ Fund and/or Participant Investment Fund, which is combined with the assets of the Sharia Insurance Company, Sharia Reinsurance Company, or Sharia Unit, according to the granted authority or power, with compensation in the form of profit sharing (nisbah) the amount of which is determined based on the composition of combined assets and has been previously agreed upon.
Mandatory Insurance Program is a program mandated by statutory regulations for all or specific groups in society to obtain protection from certain risks, excluding programs mandated by law to provide basic protection for society with cross-subsidy mechanisms in determining benefits and Premiums or contributions, as referred to in Law Number 40 of 2014 concerning Insurance.
Financial Services Authority, hereinafter abbreviated as OJK, is an independent institution having the functions, duties, and authorities for regulation, supervision, examination, and investigation, as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.

CHAPTER II
SCOPE OF BUSINESS
First Section
Scope of Business of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies
Article 2
(1) General Insurance Companies may only conduct:
a. General Insurance Business, including health insurance lines and personal accident insurance lines; and b. Reinsurance Business for risks of other General Insurance Companies.
(2) Life Insurance Companies may only conduct Life Insurance Business, including annuity lines, health insurance lines, and personal accident insurance lines.
(3) Reinsurance Companies may only conduct Reinsurance Business.
Article 3
(1) Sharia General Insurance Companies and Sharia Units within General Insurance Companies may only conduct:
a. Sharia General Insurance Business, including health insurance lines based on Sharia Principles and personal accident insurance lines based on Sharia Principles; and b. Sharia Reinsurance Business for risks of Sharia General Insurance Companies or Sharia Units within other General Insurance Companies. (2) Sharia Life Insurance Companies and Sharia Units within Life Insurance Companies may only conduct Sharia Life Insurance Business, including annuity lines based on Sharia Principles, health insurance lines based on Sharia Principles, and personal accident insurance lines based on Sharia Principles. (3) Sharia Reinsurance Companies and Sharia Units within Reinsurance Companies may only conduct Sharia Reinsurance Business. Second Section Expansion of Scope of Business for General Insurance Business, Life Insurance Business, Sharia General Insurance Business, and Sharia Life Insurance Business
Article 4
The scope of business of Insurance Companies or Sharia Insurance Companies may be expanded according to societal needs with the following provisions:
a. General Insurance Companies may only expand their business scope to:

Investment-Linked Insurance (PAYDI) business activities;
Fee-based business activities;
Credit Insurance and Suretyship business activities; and/or
Other business activities based on government assignment;
b. Sharia General Insurance Companies and Sharia Units within General Insurance Companies may only expand their business scope to:
Investment-Linked Insurance (PAYDI) business activities;
Fee-based business activities; and/or
Other business activities based on government assignment;
c. Life Insurance Companies, Sharia Life Insurance Companies, and Sharia Units within Life Insurance Companies may only expand their business scope to fee-based business activities;
d. Fee-based business activities as referred to in letter a number 2, letter b number 2, and letter c may only be conducted in:
Administrative Service Only (ASO) in the context of employee benefits; and
Marketing of products from financial service institutions that have received approval from OJK and are not insurance or reinsurance products; and
e. The provisions as referred to in letter d number 2 do not apply to Insurance Companies or Reinsurance Companies that market Sharia insurance products from Sharia Insurance Company spin-off products for a maximum of 2 (two) years since the spin-off was conducted.
Article 5
(1) Plans to expand the business scope to be conducted by Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies must be included in the business plan of the Insurance Company or Sharia Insurance Company. (2) Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies that intend to expand their business scope as referred to in Article 4 must first obtain approval from OJK.
Article 6
To obtain approval for business scope expansion as referred to in Article 4, Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies must meet the following provisions:
a. the minimum solvency ratio of the Insurance Company, Sharia Insurance Company, or Sharia Unit within the Insurance Company; b. are not currently subject to business activity restriction sanctions for the Insurance Company, Sharia Insurance Company, or Sharia Unit within the Insurance Company; and
c. based on risk assessments conducted by OJK, have a low or low-medium risk level.
Article 7
(1) In addition to meeting the provisions as referred to in Article 6, General Insurance Companies, Sharia General Insurance Companies, or Sharia Units within General Insurance Companies that expand their business scope to PAYDI must meet the following provisions:
a. have own capital of at least IDR 250,000,000,000.00 (two hundred fifty billion rupiah) for General Insurance Companies; b. have own capital of at least IDR 150,000,000,000.00 (one hundred fifty billion rupiah) for Sharia General Insurance Companies or Sharia Units within General Insurance Companies;
c. have actuaries;
d. have investment managers; e. have adequate information systems; and f. have adequate supporting resources.
(2) General Insurance Companies, Sharia General Insurance Companies, or Sharia Units within General Insurance Companies may only expand their business scope to PAYDI that meet the following minimum criteria:
a. cover the risk of death due to personal accidents; and b. have a policy term of at least 5 (five) years.
(3) General Insurance Companies, Sharia General Insurance Companies, or Sharia Units within General Insurance Companies that have obtained approval for business scope expansion to PAYDI business activities and no longer meet the provisions as referred to in paragraph (1) and/or in Article 6 must stop marketing PAYDI. (4) Approval from OJK as referred to in Article 5 paragraph (2) for General Insurance Companies, Sharia General Insurance Companies, and Sharia Units within General Insurance Companies is given in the form of a PAYDI approval letter. (5) In addition to meeting the provisions in Article 5 and Article 6, to obtain approval as referred to in paragraph (4), the following requirements must also be met as regulated in OJK regulations concerning insurance products and marketing of insurance products and its implementing regulations. (6) Further provisions regarding PAYDI as referred to in paragraph (1) through paragraph (4) are regulated in OJK Circular Letters concerning PAYDI.
Article 8
(1) In addition to meeting the provisions as referred to in Article 6, Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies that expand their business scope to fee-based business activities must meet the following provisions:
a. have employees assigned to conduct fee-based business activities who have undergone special education and training in the field of products to be marketed at the head office, branches outside the head office, and/or other locations conducting fee-based business activities; b. have responsible officials for fee-based business activities at the head office, branches outside the head office, and/or other locations conducting fee-based business activities; and
c. have written cooperation agreements.
(2) Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies that expand their business scope to fee-based business activities and do not meet the provisions as referred to in paragraph (1) and/or in Article 6 must stop fee-based business activities. (3) In the event that Insurance Companies, Sharia Insurance Companies, and Sharia Units within Insurance Companies are subject to administrative sanctions in the form of business activity restrictions, Insurance Companies, Sharia Insurance Companies, and Sharia Units within Insurance Companies must stop fee-based business activities until the business activity restriction sanction is lifted. (4) Business activity restriction sanctions as referred to in paragraph (3) do not cancel the obligations of Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies towards contracts that have been agreed upon until the end of the contract and cannot be extended.
Article 9
Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies conducting fee-based business activities must have written internal control systems for fee-based products to be marketed, containing at least:
a. the granting of authority and responsibility that can avoid conflicts of interest; b. standard operating procedures for implementing fee-based product activities; and
c. efforts and actions taken to correct deviations that occur.
Article 10
(1) To obtain approval for expanding business scope to fee-based activities as referred to in Article 4 letter d, Insurance Companies, Sharia Insurance Companies, or Sharia Units within Insurance Companies must submit a request letter to OJK attaching specimens of cooperation agreements. (2) OJK provides approval, rejection, or requests for document completeness for requests to expand business scope to fee-based...

services (fee based) within a maximum of 20 (twenty) working days after the application is received in complete form.

Article 11
(1) If within the period of 20 (twenty) working days from the date of notification from the OJK as referred to in Article 10 paragraph (2), the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company does not complete the documents, the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company is deemed to have cancelled the application for expansion of business scope based on service fees (fee based). (2) If the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company still intends to expand the business scope based on service fees (fee based) after passing the period as referred to in paragraph (1), the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company must resubmit its application to the OJK.

Article 12
(1) The total service income obtained by the Insurance Company from all service-based business activities (fee based) is prohibited from exceeding 25% (twenty-five percent) of the total gross Premium income obtained by the Insurance Company in one fiscal year period based on audited annual financial reports. (2) The total service income obtained by the Sharia Insurance Company from all service-based business activities (fee based) is prohibited from exceeding 50% (fifty percent) of the total ujrah (fee) of the Sharia Insurance Company received from Sharia General Insurance Business or Sharia Life Insurance Business activities in one fiscal year period based on audited annual financial reports. (3) The total service income obtained by the Sharia Unit in the Insurance Company from all service-based business activities (fee based) is prohibited from exceeding 50% (fifty percent) of the total ujrah (fee) in one fiscal year period based on audited annual financial reports.

Article 13
In addition to meeting the provisions as referred to in Article 6, General Insurance Companies that expand their business scope in Credit Insurance and Suretyship business activities must comply with legislation in the field of Credit Insurance and Suretyship business operations and pay attention to legislation in the field of guaranteeing.

CHAPTER III
BUSINESS CONDUCT STANDARDS
First Section
Pre-Sales, Agency, and Brokerage

Article 14
Companies or Sharia Units are required to provide and/or convey information regarding products and/or services that is accurate, clear, and not misleading to policyholders, insureds, participants, or Ceding Companies regarding marketed insurance products or Sharia insurance products.

Article 15
(1) In conducting promotions or advertisements, Companies or Sharia Units are required to make best efforts to ensure that the information provided in such promotions or advertisements is conveyed accurately, clearly, and without being misleading. (2) Companies or Sharia Units are required to withdraw advertising materials that are inaccurate, unclear, and/or can mislead policyholders, insureds, participants, or Ceding Companies. (3) In the event that the OJK assesses that the advertising materials conveyed are inaccurate, unclear, and/or can mislead policyholders, insureds, participants, or Ceding Companies, the OJK may request the Company or Sharia Unit to withdraw the said advertising materials within a maximum period of 7 (seven) working days from the date of the OJK's request. (4) Information provided for promotions or advertisements in the form of brochures or leaflets must meet the following provisions:
a. easy to understand; b. contain benefits that will be obtained by policyholders, insureds, participants, or Ceding Companies from the offered products;
c. contain the process for submitting claim applications;
d. contain exclusions that affect the claim approval and payment process; e. do not hide, reduce, or eliminate important statements; and f. contain statements regarding applicable terms and conditions. (5) Information provided for promotions or advertisements other than brochures or leaflets must meet at least the provisions as regulated in paragraph (4) letters a, b, and f.

Article 16
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies that use Insurance Agents are required to ensure that Insurance Agents:
a. have agency certificates in accordance with their business fields; and b. are registered with the OJK.
(2) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies that use Insurance Agents must at least:
a. report their Insurance Agents to the association in accordance with their business fields; and b. make a written agreement with Insurance Agents who market their insurance products which must at least include:

the code of ethics established by the association in accordance with their business fields in the agency agreement;
the obligation of Insurance Agents to comply with the code of ethics or similar regulations established by the Insurance Company association in accordance with their business fields, along with sanctions imposed for each violation committed by the Insurance Agent; and
the time period for submitting Premiums or contributions to the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company, in the event that the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company grants authority to the Insurance Agent to receive Premiums or contributions.
(3) In the event that Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies use Insurance Agents as referred to in paragraph (1), the Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are fully responsible for the consequences arising from insurance closures conducted by the respective Insurance Agents.

Article 17
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are prohibited from entering into agreements with Insurance Agents who are still bound by agency agreements with other Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies of the same kind. (2) In the event that Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies enter into agreements with Insurance Agents who are still cooperating with other Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies of a different kind, the Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to ensure that the said agents have obtained approval from the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company where the agent previously worked. (3) In the event that Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies enter into agreements with Insurance Agents who have moved from other Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies of the same kind, the Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to ensure that the said Insurance Agents submit a statement letter stating:
a. they have completed all their obligations to the previous Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company; and b. they have not engaged in twisting, which is an action that persuades and/or influences policyholders, insureds, or participants to change the specifications of existing policies or replace existing policies with new policies with other Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies, and/or buy new policies using funds originating from active policies with other Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies.

Article 18
Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies that use Insurance Agents in marketing their products are required to ensure that in their marketing activities, Insurance Agents have at least performed the following actions:
a. convey identity as a lawful representative of the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company by showing the valid agency license for the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company they represent; b. convey information regarding the offered insurance products and important information related to policy terms and conditions by paying attention to OJK regulations regarding consumer protection in the financial services sector;
c. convey to policyholders, insureds, or participants the receipt or rejection of the insurance closure letter from the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company to the policyholder, insured, or participant within a maximum of 5 (five) working days from the decision to accept or reject coverage;
d. inform documents required for submitting the insurance closure application form; e. request documents required for submitting the application form and other documents requested by the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company for insurance closure; and f. ensure that policyholders, insureds, or participants fill out the entire insurance coverage application form completely in accordance with the documents submitted.

Article 19
In the event that an Insurance Agent is no longer an Insurance Agent of an Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company, the respective Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company is required to:
a. notify policyholders, insureds, or participants whose insurance closures were conducted through the said Insurance Agent; and b. provide information on replacement Insurance Agents or customer service officers.

Article 20
Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to provide continuous knowledge at least 2 (two) times in 1 (one) year regarding marketed insurance products or Sharia insurance products, including marketing procedures and claim submission procedures, to Insurance Agents.

Article 21
(1) Dispute resolution of Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies resulting from the use of Insurance Agents in the context of insurance product marketing activities is resolved through deliberation and consensus between the disputing parties. (2) In the event that no agreement is found between the disputing parties, dispute resolution is resolved through the association in accordance with the business activities of the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company.

Article 22
(1) Companies or Sharia Units may accept insurance closures from Insurance Brokerage Companies or Reinsurance Brokerage Companies.
(2) In the event that Companies or Sharia Units accept business from Insurance Brokerage Companies or Reinsurance Brokerage Companies abroad, Companies or Sharia Units are required to ensure that the said Insurance Brokerage Companies or Reinsurance Brokerage Companies have business licenses from insurance authorities abroad. (3) In the event that Companies or Sharia Units cover insurance risks on domestic objects from Insurance Brokerage Companies or Insurance Brokerage Companies, Companies or Sharia Units are required to ensure that the said Insurance Brokerage Companies or Insurance Brokerage Companies have business licenses from the OJK.

Second Section
Policies, Premiums, or Contributions

Article 23
In the event that insurance or Sharia insurance closures are conducted through Insurance Agents, the coverage or Sharia insurance is declared to start and bind the parties counted from the date Premiums or contributions are received by the Insurance Agent and/or the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company.

Article 24
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to ensure that policyholders, insureds, or participants have received the policy within a maximum period of 10 (ten) working days after the payment of Premiums or contributions and coverage is declared accepted. (2) In the event that insurance products or Sharia insurance products have a coverage period of more than 1 (one) year or are not micro-insurance products, Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to provide opportunities for policyholders, insureds, or participants to study the policy within a minimum period of 14 (fourteen) days from the date policyholders, insureds, or participants receive the policy. (3) Within the period as referred to in paragraph (2), Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are prohibited from investing Premiums received from policy payments linked to investments, unless written approval is obtained from policyholders, insureds, or participants stating that policyholders, insureds, or participants have understood their investment risks. (4) In the event that policyholders, insureds, or participants cancel coverage or Sharia insurance within the period as referred to in paragraph (2), Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to return at least an amount of Premiums or contributions that have been paid minus costs, plus investment returns or minus investment losses that have obtained written approval from policyholders, insureds, or participants as referred to in paragraph (3). (5) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to return the portion of Premiums or contributions as referred to in paragraph (3) within a maximum of 15 (fifteen) working days from the date the cancellation request from policyholders, insureds, or participants is received in complete form by the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company.

Article 25
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to inform policyholders, insureds, or participants regarding policy cost details.
(2) In the event that insureds or participants as referred to in paragraph (1) are insureds or participants of insurance products or Sharia insurance products linked to credit distribution or Sharia financing, policy cost details may be informed only to policyholders unless requested by insureds or participants.

Article 26
Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to convey details regarding the portion of Premiums or contributions paid to Insurance Brokerage Companies in the policy or documents that are part of it.

Article 27
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies may grant approval to Insurance Agents through agency agreements or other internal regulations to receive Premium or contribution payments from policyholders, insureds, or participants. (2) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to ensure that Insurance Agents have provided proof of Premium or contribution payment receipt to policyholders, insureds, or participants, in the event that Insurance Agents receive Premium or contribution payments.

Article 28
Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to be responsible for claim payments or benefits arising if Insurance Agents have received Premiums or contributions but have not yet submitted them to the Insurance Company, Sharia Insurance Company, or Sharia Unit in the Insurance Company.

Article 29
(1) Companies or Sharia Units may open opportunities for policyholders, insureds, participants, or Ceding Companies to make Premium or contribution payments through Insurance Brokerage Companies or Reinsurance Brokerage Companies. (2) In the event that Premium or contribution payments received by Insurance Brokerage Companies or Reinsurance Brokerage Companies have been submitted to Companies or Sharia Units, claim payments or benefits arising are the responsibility of the Companies or Sharia Units. (3) Claim payments or benefits arising as referred to in paragraph (2) apply if:
a. policyholders, insureds, participants, or Ceding Companies pay Premiums or contributions within the Premium or contribution payment period determined in the policy or reinsurance agreement; and b. the risk occurring is covered in the policy or reinsurance agreement. (4) In the event that Companies or Sharia Units have not received Premium or contribution payments from Insurance Brokerage Companies or Reinsurance Brokerage Companies within a maximum period of 1 (one) working day after the end of the period determined in the policy, Companies or Sharia Units may issue a policy cancellation letter or reinsurance agreement to the insurance broker to be conveyed to policyholders, insureds, participants, or Ceding Companies, and Companies or Sharia Units are not responsible for claim payments or benefits arising. (5) In the event that Companies or Sharia Units do not cancel policies or reinsurance agreements and receive Premium or contribution payments through Insurance Brokerage Companies or Reinsurance Brokerage Companies after the end of the period determined in the policy or reinsurance agreement, Companies or Sharia Units are required to be responsible for claim payments or benefits arising since Premiums or contributions were received. (6) In the event that Companies or Sharia Units receive Premium or contribution payments through Insurance Brokerage Companies or Reinsurance Brokerage Companies after the end of the period determined in the policy or reinsurance agreement and do not cancel policies or reinsurance agreements within a period of 3 (three) days since Premiums and contributions were received, Companies or Sharia Units are required to be responsible for claim payments or benefits arising since Premiums or contributions were received. (7) In the event that claims occur before Companies or Sharia Units receive Premium or contribution payments from Insurance Brokerage Companies or Reinsurance Brokerage Companies, Companies or Sharia Units are required to assist policyholders, insureds, participants, or Ceding Companies in claim resolution with Insurance Brokerage Companies or Reinsurance Brokerage Companies. (8) In the event that claim resolution as referred to in paragraph (6) uses an insurance loss assessor company, the costs arising can be charged to Insurance Brokerage Companies or Reinsurance Brokerage Companies. (9) In the event of insurance closures through Insurance Brokerage Companies, Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are prohibited from offsetting Premiums or contributions with claims.

Article 30
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies are required to provide confirmation to Insurance Brokerage Companies or Reinsurance Brokerage Companies regarding the payment details of each policy or reinsurance agreement submitted by Insurance Brokerage Companies within a maximum period of 15 (fifteen) working days after the payment details of Premiums or contributions for each policy or reinsurance agreement are received. (2) Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units in Reinsurance Companies are required to provide confirmation or verification to Reinsurance Brokerage Companies regarding payment details submitted by Reinsurance Brokerage Companies within a maximum period of 15 (fifteen) working days after payment details of Premiums or contributions are received.

Article 31
(1) Companies or Sharia Units are required to pay intermediary service fees or commissions that are the rights of Insurance Brokerage Companies or Reinsurance Brokerage Companies within a maximum period of 7 (seven) working days after confirmation of payment details is received by Companies or Sharia Units, unless otherwise determined in cooperation agreements. (2) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies may only provide portions of Premiums or contributions that are intermediary service fees or commissions to parties involved in the marketing process of insurance products or Sharia insurance products.

Third Section
Reinsurance Agreements or Sharia Reinsurance Agreements

Article 32
Every Insurance Company, Sharia Insurance Company, or Sharia Unit in Insurance Companies is required to have reinsurance support in the form of automatic reinsurance agreements or Sharia reinsurance agreements.

Article 33
(1) Reinsurance agreements or Sharia reinsurance agreements must be made in writing and are not agreements that promise certain profits for the reinsurer or cedant.
(2) Reinsurance agreements or Sharia reinsurance agreements as referred to in paragraph (1) must contain a statement that in the event that Insurance Companies, Sharia Insurance Companies, Sharia Units in Insurance Companies, Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units in Reinsurance Companies are liquidated, the rights and obligations of Insurance Companies, Sharia Insurance Companies, Sharia Units in Insurance Companies, Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units in Reinsurance Companies arising in reinsurance transactions remain binding until the time one or both Companies are liquidated.

Fourth Section
Underwriting

Article 34
Companies or Sharia Units are required to have underwriting guidelines for marketed products, which reflect that the risk selection process is carried out carefully and in accordance with generally accepted insurance practices.

Article 35
Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies, before conducting insurance closures, are required to ensure that all risks covered are already covered by the Insurance Company, Sharia Insurance Company, or

Unit Syariah on the relevant Insurance Company and/or reinsurer.

Part Five
Claim Settlement

Article 36
The Company or Sharia Unit must have claim settlement guidelines for marketed products, reflecting that claim handling has been carried out through a process that is fast, simple, accessible, fair, and in accordance with generally accepted insurance practices.

Article 37
(1) The Company or Sharia Unit is prohibited from taking actions that can delay claim settlement or payment, or from failing to take actions that should be taken, resulting in delayed claim settlement or payment. (2) The Company or Sharia Unit may appoint an insurance loss assessor company to assess submitted claims. (3) In the event the Company or Sharia Unit uses an insurance loss assessor company as referred to in paragraph (2), the Company or Sharia Unit is prohibited from ignoring the loss assessment results without strong arguments.

Article 38
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies may only request documents as requirements for claim submissions as stated in the policy.
(2) In the event the policy states documents and/or other conditions as requirements for claim submissions, such documents and/or other conditions must:
a. be relevant to the coverage; and b. be reasonable in the claim settlement process.
(3) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies are prohibited from making insurance claim payments through third parties, except Insurance Brokers, claim service providers, or parties that have obtained approval from the beneficiary.

Article 39
(1) In the event Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies appoint insurance loss assessor companies as referred to in Article 37 paragraph (2), Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies must appoint insurance loss assessor companies that have obtained business licenses from OJK. (2) The appointment of insurance loss assessor companies as referred to in paragraph (1) must be stipulated in the form of a cooperation agreement between Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies and insurance loss assessor companies. (3) The cooperation agreement as referred to in paragraph (2) must contain at least:
a. the rights and obligations of the insurance loss assessor company and Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies; b. the payment period for loss assessment service fees and/or consultation fees regarding losses occurring on insured objects; and
c. provisions stating that every loss assessment of insured objects by insurance loss assessor companies must be based on written assignments or work order letters from Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies.
(4) Written assignments or work order letters as referred to in paragraph (3) letter c regulate the performance or stages of loss assessor settlement.

Article 40
(1) The Company or Sharia Unit must settle claim payments within the claim payment period or benefits specified in the insurance policy, or at the latest 30 (thirty) days since there is an agreement between the policyholder, insured, or participant with Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies, or certainty regarding the amount of claims to be paid, whichever is shorter. (2) In the event the Company or Sharia Unit is required to pay claims based on decisions of relevant alternative dispute resolution institutions, the Company or Sharia Unit must pay such claims at the latest 30 (thirty) days since the decision is established or otherwise established in the decision of the relevant alternative dispute resolution institution. (3) In the event the claim settlement process has been referred to the court, the Company or Sharia Unit must pay claims at the latest 30 (thirty) days after the establishment of a final and binding claim payment decision (inkracht) or otherwise established in the court decision. (4) The Company or Sharia Unit is prohibited from making claim payments through Insurance Brokers or Reinsurance Brokers except with written approval from the policyholder, insured, participant, or Ceding Company.

Part Six
Expertise in the Insurance Field

Article 41
(1) The Company or Sharia Unit must apply all expertise, attention, and care in serving or transacting with policyholders, insured, participants, or Ceding Companies.
(2) The Company or Sharia Unit in carrying out its business activities must have experts and actuaries appropriate to its business field.

Article 42
(1) Experts of Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies have the following duties and responsibilities:
a. conducting evaluations of the application of insurance underwriting management in Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies; b. conducting evaluations of technical aspects in the reinsurance process in Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies;
c. conducting evaluations of technical aspects in the claim settlement process in Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies;
d. participating in the application of risk management in Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies; and e. other duties and responsibilities established by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies. (2) Experts of Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies have the following authorities:
a. accepting or rejecting insurance coverage in certain amounts established by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies; and b. other authorities established by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies.

Article 43
(1) Experts of Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies have the following duties and responsibilities:
a. conducting evaluations of the application of reinsurance underwriting management in Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies; b. conducting evaluations of technical aspects in the retrocession process in Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies;
c. conducting evaluations of technical aspects in the claim settlement process in Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies;
d. participating in the application of risk management in Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies; and e. other duties and responsibilities established by Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies. (2) Experts of Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies have the following authorities:
a. accepting or rejecting reinsurance business submissions in certain amounts established by Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies; and b. other authorities established by Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units on Reinsurance Companies.

Article 44
(1) Actuaries of Companies or Sharia Units have the following duties and responsibilities:
a. ensuring the quality of statistical data of the Company or Sharia Unit; b. conducting evaluations of the financial health and capital adequacy of the Company or Sharia Unit;
c. designing insurance products including determining Premium rates and profitability of the aforementioned insurance products;
d. calculating the technical reserves of the Company or Sharia Unit; e. participating in the application of risk management in the Company or Sharia Unit; f. conducting evaluations of actuarial aspects in the reinsurance process in the Company or Sharia Unit; g. preparing estimates of the Company’s or Sharia Unit’s ability to meet future obligations; and h. other duties and responsibilities established by the Company or Sharia Unit. (2) Actuaries of Companies or Sharia Units have the following authorities:
a. signing actuarial reports of the Company or Sharia Unit; b. signing operational reports of the Company or Sharia Unit;
c. signing insurance product reporting submissions; and
d. other authorities established by the Company or Sharia Unit.
(3) In carrying out their duties, actuaries of Companies or Sharia Units must refer to the code of ethics and behavioral standards established by professional associations in Indonesia.

Part Seven
Handling Complaints or Grievances

Article 45
(1) The Company or Sharia Unit must resolve every complaint or grievance regarding insurance products submitted by policyholders, insured, participants, or Ceding Companies.
(2) The Company or Sharia Unit must have and implement mechanisms for handling complaints or grievances from policyholders, insured, participants, or Ceding Companies.
(3) The service and complaint resolution mechanisms as referred to in paragraph (1) must be notified to policyholders, insured, participants, or Ceding Companies.
(4) Complaint or grievance handling mechanisms must be administered and/or documented electronically, and posted on the Company’s website.

Article 46
(1) The Company or Sharia Unit must have working units and/or functions to handle and resolve complaints or grievances submitted by policyholders, insured, participants, or Ceding Companies.
(2) The Company or Sharia Unit is prohibited from charging any fees to policyholders, insured, participants, or Ceding Companies for submitting complaints or grievances.
(3) Procedures for resolving complaints or grievances are in accordance with regulations of OJK regarding consumer protection in the financial services sector and regulations of OJK regarding alternative dispute resolution institutions in the financial services sector.

Part Eight
Communication Means and Information Technology

Article 47
The Company or Sharia Unit must provide various communication and information means that are easy to access by policyholders, insured, participants, or Ceding Companies, which include at least postal addresses, email, telephone, facsimile, and websites.

Article 48
(1) Company or Sharia Unit websites as referred to in Article 47 must contain at least the following information:
a. Company or Sharia Unit profiles which completely include:

business licenses from OJK or other authorities before the establishment of OJK;
organizational structure and names of Company or Sharia Unit officials, at least including the Board of Directors, Board of Commissioners or equivalents, Sharia Supervisory Board, and officials one level below the Board of Directors; and
networks, addresses, telephone numbers of offices outside the head office, and names of officials of offices outside the head office;
b. summary of product information from all marketed products;
c. procedures and methods of transacting;
d. information on service and complaint resolution procedures; e. list of active Insurance Agents marketing the Company’s or Sharia Unit’s products; f. application of Company or Sharia Unit governance contained in annual reports; g. other information, both required by other regulations and needed by the Company or Sharia Unit; and h. performance of each investment sub-fund of Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies in the event Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies market PAYDI. (2) The Company or Sharia Unit must update information presented on the Company or Sharia Unit website at the latest 20 (twenty) working days after changes to information as referred to in paragraph (1) letters a through h occur. (3) In the event the Company or Sharia Unit is an issuer or public company, information contained on the Company or Sharia Unit website must comply with regulations of OJK regarding websites of issuers or public companies.

Article 49
(1) Business activities of the Company or Sharia Unit must be supported by data management systems that can generate accurate and accountable information for decision-making.
(2) The Company or Sharia Unit must apply effective and integrated risk management in using data management systems.
(3) For the purposes of law enforcement, protection, and enforcement of state sovereignty over its citizens' data, the Company or Sharia Unit must locate data in data centers and disaster recovery centers within Indonesian territory.

Article 50
Data as referred to in Article 49 paragraph (3) must consist of at least:
a. data and information related to personal data of policyholders, insured, or participants; b. data and information related to Premium or claim payment transactions;
c. population data and information; and
d. data and information in the field of legal entity administration.

Article 51
(1) The Company or Sharia Unit may conduct its own information technology operations and/or use information technology service providers.
(2) In the event the Company or Sharia Unit uses information technology service providers as referred to in paragraph (1), the Company or Sharia Unit must:
a. be responsible for applying risk management; b. conduct supervision and evaluation of the performance of information technology service providers; and
c. provide access to data, information, and databases to OJK as well as the Company’s or Sharia Unit’s internal and external auditors from time to time when needed.

Article 52
The Company or Sharia Unit may conduct its business activities digitally or electronically.

CHAPTER IV
APPLICATION OF SHARIA PRINCIPLES IN THE CONDUCT OF GENERAL SHARIA INSURANCE BUSINESS, SHARIA LIFE INSURANCE BUSINESS, AND SHARIA REINSURANCE BUSINESS

Article 53
Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units in conducting their business activities must apply the following basic principles:
a. the fulfillment of justice ('adl), trustworthiness (amanah), balance (tawazun), public interest (maslahah), and universality (syumul); and b. the absence of prohibited elements, such as uncertainty or ambiguity (gharar), gambling (maysir), interest (riba), oppression (zhulm), bribery (risywah), sin, and prohibited objects.

Article 54
(1) Sharia insurance policies and Sharia reinsurance agreements must contain Tabarru’ Contracts and Tijarah Contracts.
(2) Sharia annuity policies for pension programs must contain Hibah Tanahud Contracts and Tijarah Contracts.
(3) Tijarah Contracts as referred to in paragraph (1) and paragraph (2) may be Wakalah bil Ujrah Contracts, Mudharabah Contracts, and/or Mudharabah Musytarakah Contracts.
(4) The use of one of the Tijarah Contracts as referred to in paragraph (3) must be applied consistently until the end of the Sharia insurance policy.
(5) In the event a change in Tijarah Contracts is agreed upon, the use of the new Tijarah Contract can only be applied to new Sharia insurance policies.
(6) In the event changes in Tijarah Contracts as referred to in paragraph (5) occur for the management of Tabarru’ Funds or Tanahud Funds, Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units must separate Tabarru’ Funds or Tanahud Funds managed based on the old Tijarah Contracts from Tabarru’ Funds or Tanahud Funds managed based on the new Tijarah Contracts. (7) Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units may use Tijarah Contracts for the management of investments from Tabarru’ Funds or Tanahud Funds that differ from the Tijarah Contracts used for other activities. (8) Based on Wakalah bil Ujrah Contracts, Mudharabah Contracts, and Mudharabah Musytarakah Contracts, Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units must bear all losses occurring in risk management and/or investment management activities resulting from intentional errors, negligence, or breach of contract committed by Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units.

Article 55
(1) Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units may use Contracts other than those referred to in Article 54 paragraph (1) and paragraph (2) in conducting Sharia Insurance Business or Sharia Reinsurance Business. (2) The use of Contracts as referred to in paragraph (1) must be based on fatwas from the National Sharia Council of the Indonesian Ulema Council and must first obtain approval from OJK.

Article 56
(1) Tabarru’ Contracts or Hibah Tanahud Contracts used in Sharia insurance policies or Sharia annuity policies for pension programs cannot be changed into Tijarah Contracts.
(2) Tabarru’ Contracts used in Sharia insurance policies as referred to in paragraph (1) must contain at least the following:
a. agreement among policyholders or participants to assist each other (ta’awuni); b. the rights and obligations of each policyholder or participant individually;
c. the rights and obligations of policyholders or participants collectively within groups;
d. methods and timing of contribution payments; e. methods and timing of benefit/claim payments; f. provisions regarding whether contributions can be withdrawn by policyholders or participants in the event of cancellation by policyholders or participants; g. provisions regarding alternatives and percentages for underwriting surplus distribution; and h. other agreed provisions. (3) In Tabarru’ Contracts, Tabarru’ Funds must be formed from policyholder or participant contributions from the beginning of the Sharia insurance or Sharia reinsurance agreement. (4) Hibah Tanahud Contracts as referred to in paragraph (1) must contain at least the following:
a. the rights and obligations of each policyholder or participant individually; b. the rights and obligations of policyholders or participants collectively;
c. the rights and obligations of the company as the manager of Sharia annuity programs for pensions;
d. methods and timing of Tanahud contribution payments; e. methods and timing of Sharia annuity benefit payments for pensions; and f. other agreed provisions.

Article 57
(1) Wakalah bil Ujrah Contracts are used in activities including:
a. administrative activities; b. fund management;
c. claim payments;
d. underwriting; e. risk portfolio management; f. marketing; g. Investment of Tabarru’ Funds, Tanahud Funds, and/or Participant Investment Funds; and/or h. other activities as agreed in the policy.
(2) Wakalah bil Ujrah Contracts must contain at least the following:
a. objects/activities entrusted for management; b. the rights and obligations of policyholders or participants collectively and/or policyholders or participants individually as principals (muwakkil);
c. the rights and obligations of Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units as agents (penerima kuasa);
d. limits of authority or powers granted by policyholders or participants to Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units; e. the amount, method, and timing of fee deductions (ujrah); and f. other agreed provisions. (3) In the event the management of Tabarru’ Funds, Tanahud Funds, or Participant Investment Funds is based on Wakalah bil Ujrah Contracts, Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units are not entitled to a share of the investment returns.

Article 58
(1) Mudharabah Contracts are used in the management of Tabarru’ Funds, Tanahud Funds, and/or the management of Participant Investment Funds.
(2) Mudharabah Contracts as referred to in paragraph (1) must contain at least the following:
a. the rights and obligations of policyholders or participants collectively and/or policyholders or participants individually as shahibul maal (fund owners); b. the rights and obligations of Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units as mudharib (fund managers);
c. limits of authority granted by policyholders or participants to Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units;
d. profit sharing (nisbah), methods, and timing of investment return distribution; and e. other agreed provisions.

Article 59
(1) Mudharabah Musytarakah Contracts are used in the management of Tabarru’ Funds, Tanahud Funds, and/or the management of Participant Investment Funds.
(2) Mudharabah Musytarakah Contracts as referred to in paragraph (1) must contain at least the following:
a. the rights and obligations of policyholders or participants collectively and/or policyholders or participants individually as shahibul maal (fund owners); b. the rights and obligations of Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units as mudharib (fund managers);
c. limits of authority granted by policyholders or participants to Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units;
d. methods and timing for determining the wealth of policyholders or participants and the wealth of Sharia Insurance Companies, Sharia Reinsurance Companies, or Sharia Units; e. profit sharing (nisbah), methods, and timing of investment return distribution; and f. other agreed provisions.

CHAPTER V
TRANSFER OF A PORTION OF THE INSURANCE PORTFOLIO
Article 60
(1) The transfer of a portion of the insurance portfolio by an Insurance Company or Sharia Unit may only be conducted after obtaining prior approval from OJK.
(2) The transfer of the insurance portfolio as referred to in paragraph (1) must meet the requirements that the transfer:
a. does not reduce the rights of policyholders, insureds, participants, or Ceding Companies; b. is conducted to an Insurance Company or Sharia Unit that has the same line of business;
c. is conducted to an Insurance Company or Sharia Unit that has already possessed similar products or similar reinsurance agreements; and
d. does not cause the Insurance Company or Sharia Unit receiving the transfer to violate regulations in the field of insurance.
(3) OJK issues a letter of approval or rejection regarding the transfer of the portfolio as referred to in paragraph (1) within a maximum of 30 (thirty) working days after the letter of application for approval of the portfolio transfer is received by OJK, provided that OJK does not require a direct examination. (4) In the event that OJK deems it necessary to conduct a direct examination related to the portfolio transfer referred to, OJK will convey a notification of the direct examination within a maximum of 14 (fourteen) working days after the letter of application for approval of the portfolio transfer is received by OJK. (5) In the event that OJK conducts a direct examination as referred to in paragraph (4), OJK issues a letter of approval or rejection regarding the portfolio transfer within a maximum of 14 (fourteen) working days since the final direct examination result report is established. (6) After obtaining approval as referred to in paragraph (1), the Insurance Company or Sharia Unit that will transfer the insurance portfolio must first:
a. notify in writing to every policyholder, insured, participant, or Ceding Company within a maximum of 10 (ten) working days since the date of the letter of approval of the portfolio transfer; and b. announce the transfer on the website of the Insurance Company or Sharia Unit and in a daily Indonesian newspaper with national circulation for a minimum of 3 (three) consecutive days, within a maximum of 10 (ten) working days since the date of the letter of approval of the portfolio transfer. (7) The notification and announcement as referred to in paragraph (6) must contain at least:
a. the time limit for rejecting the portfolio transfer; b. the consequences arising from the rejection of the portfolio transfer; and
c. the mechanism for resolving the rights of policyholders, insureds, participants, or Ceding Companies who reject the portfolio transfer.

Article 61
(1) Insurance Companies or Sharia Units are required to provide an opportunity to policyholders, insureds, participants, or Ceding Companies to submit rejection of the transfer of their insurance to another Insurance Company or Sharia Unit within a time limit of 1 (one) month since the announcement as referred to in Article 60 paragraph (6) letter b.

(2) In the event that policyholders, insureds, participants, or Ceding Companies reject the transfer of their insurance to another Insurance Company or Sharia Unit, the insurance coverage terminates and the Insurance Company or Sharia Unit is required to return the rights of the policyholders, insureds, participants, or Ceding Companies.

Article 62
(1) The return of rights of policyholders, insureds, participants, or Ceding Companies as referred to in Article 61 paragraph (2) is conducted as follows:
a. for insurance policies or Sharia insurance policies that do not have a savings element, the amount is calculated proportionally based on the remaining duration of coverage on the date the policyholder, insured, participant, or Ceding Company submits rejection of the transfer of their insurance (unearned premium), after deducting the portion of Premium or contribution that has been paid to the Insurance Brokerage Company and/or agent commission; b. for reinsurance or Sharia reinsurance, the amount is calculated according to the reinsurance agreement or Sharia reinsurance agreement on the date the Ceding Company submits rejection of the transfer of their insurance (unearned premium), after deducting the portion of Premium or contribution that has been paid to the Reinsurance Brokerage Company and/or other commissions;
c. for insurance policies or Sharia insurance policies that have a savings element, the amount is the cash value on the date the policyholder, insured, participant, or Ceding Company submits rejection of the transfer of their insurance; or
d. for PAYDI insurance policies:

for Risk Premium or Risk Contribution, the provisions as regulated in letter a apply; and
for investment funds, the amount is the net cash value on the date the rejection of the transfer of insurance coverage submitted by the policyholder, insured, or participant is received.
(2) The return of rights of policyholders, insureds, participants, or Ceding Companies as referred to in paragraph (1) cannot be charged with administrative costs including policy termination costs or surrender charges.

Article 63
(1) Insurance Companies or Sharia Units are required to complete the transfer of their insurance portfolio and/or the return of rights of policyholders, insureds, participants, or Ceding Companies within a maximum of 3 (three) months since the date of the letter of approval from OJK. (2) Insurance Companies or Sharia Units are required to report the results of the implementation of the transfer of the insurance portfolio to OJK within a maximum of 30 (thirty) working days since the portfolio transfer is completed.

CHAPTER VI
COOPERATION BETWEEN COMPANIES IN THE FRAMEWORK OF BUSINESS ACQUISITION AND COOPERATION IN CARRYING OUT A PORTION OF FUNCTIONS IN THE CONDUCT OF THEIR BUSINESS
Article 64
Insurance Companies or Sharia Units may conduct cooperation with other parties in the framework of acquiring business or carrying out a portion of functions in the conduct of their business.

Article 65
(1) Cooperation in the framework of acquiring business as referred to in Article 64 may be conducted by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies with Insurance Agents, banks, non-bank business entities, or business entities that employ Insurance Agents. (2) In the event that Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies conduct cooperation with business entities that employ Insurance Agents as referred to in paragraph (1), Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies are required to:
a. ensure that the business entity concerned is not currently bound by a cooperation agreement with similar Insurance Companies, similar Sharia Insurance Companies, or similar Sharia Units on Insurance Companies with the Insurance Company, Sharia Insurance Company, or Sharia Unit on Insurance Company concerned; b. ensure that the Insurance Agent has cooperated with the Insurance Company, Sharia Insurance Company, or Sharia Unit on Insurance Company that has cooperated with the business entity that employs the Insurance Agent concerned;
c. ensure that the Insurance Agent employed by the business entity concerned has met the provisions regarding Insurance Agents as regulated in Article 17 paragraph (1); and

d. report the cooperation agreement with the business entity concerned to OJK.

Article 66
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies that conduct cooperation with banks or non-bank business entities as referred to in Article 65 paragraph (1) are required to ensure that bank employees or non-bank business entity employees who actively provide explanations regarding insurance products possess Insurance Agent certification issued by the relevant insurance industry association. (2) In the event that Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies conduct cooperation in the framework of acquiring business as referred to in Article 64, the decision to accept or reject insurance coverage remains the authority of the Insurance Company, Sharia Insurance Company, or Sharia Unit on Insurance Company. (3) The provisions as referred to in paragraph (1) are excluded in the event that the product marketed is micro insurance products and for insurance products marketed through bancassurance with a reference business model. (4) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies are prohibited from providing remuneration for intermediary services other than to Insurance Agents or other parties who have a written agreement regarding marketing cooperation in acquiring business. (5) Cooperation in the framework of acquiring business must be conducted with individuals and/or institutions that have business licenses from the competent authority and do not have conflicts of interest with policyholders, insureds, participants, and/or Insurance Brokerage Companies or Reinsurance Brokerage Companies.

Article 67
(1) Cooperation in the framework of carrying out a portion of functions as referred to in Article 64 is conducted with service providers through outsourcing agreements.
(2) The form of outsourcing agreements conducted by Insurance Companies or Sharia Units is through agreements:
a. work contracting; and/or b. provision of labor services.
(3) Insurance Companies or Sharia Units may only conduct outsourcing agreements with service provider companies that meet at least the following requirements:
a. are Indonesian legal entities; b. possess valid business licenses from competent authorities according to their line of business;
c. have good financial performance and reputation as well as sufficient experience;
d. have human resources that support the implementation of outsourced work; e. have facilities and infrastructure needed in outsourcing; f. have competency standards in accordance with their business standards; and g. do not have conflicts of interest. (4) Insurance Companies or Sharia Units may conduct outsourcing agreements with service provider companies in the form of foreign legal entities in activities:
a. product research and development; b. information systems; and/or
c. other fields that cannot yet be met by service provider companies in Indonesia.
(5) In the event that Insurance Companies or Sharia Units conduct outsourcing agreements with service provider companies in the form of foreign legal entities as referred to in paragraph (4), they are required to report to OJK at the latest 14 (fourteen) days before the cooperation agreement is signed. (6) Outsourcing agreements as referred to in paragraph (2) must contain provisions regulating at least the type, value, and duration of the transfer of business conduct functions. (7) Insurance Companies or Sharia Units are required to exercise control over a portion of the business conduct functions transferred to other parties at a level equivalent to the control conducted internally within the Insurance Company or Sharia Unit. (8) Insurance Companies or Sharia Units remain responsible for functions transferred to service provider companies.

Article 68
(1) Cooperation in the framework of carrying out a portion of their business conduct functions as referred to in Article 64 must meet the following provisions:
a. conducted with direct orders from the Insurance Company or Sharia Unit; b. does not hinder the activities of the Insurance Company or Sharia Unit; and
c. is stipulated in a written agreement.
(2) In the implementation of cooperation as referred to in paragraph (1), Insurance Companies or Sharia Units are required to possess and apply selection standards and accountability.
(3) Insurance Companies or Sharia Units are required to ensure that cooperation in the framework of carrying out a portion of functions is conducted in accordance with the agreement made and regulations in the field of legislation.

Article 69
Insurance Companies or Sharia Units are prohibited from conducting cooperation in the framework of carrying out a portion of functions in activities:
a. underwriting approval; b. actuarial; and
c. claims approval.

CHAPTER VII
SIMULTANEOUS INSURANCE COVERAGE (CO-INSURANCE)
Article 70
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies may conduct insurance coverage through a simultaneous insurance coverage mechanism (co-insurance).
(2) The simultaneous insurance coverage mechanism (co-insurance) may be conducted for insurance products designed to be marketed and risks managed simultaneously or other insurance products in the framework of risk spreading for one object of coverage conducted on a case-by-case basis. (3) Simultaneous insurance coverage (co-insurance) in the framework of risk spreading for one object of coverage conducted on a case-by-case basis as referred to in paragraph (2) may be conducted by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies that have previously marketed insurance products in the same line of business as the simultaneous insurance coverage (co-insurance) to be conducted. (4) In the event that Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies have already possessed the same line of business but do not yet possess the same products, simultaneous insurance coverage (co-insurance) may be conducted as long as the Insurance Company, Sharia Insurance Company, or Sharia Unit on Insurance Company has sufficient own retention.

Article 71
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies that conduct simultaneous insurance coverage (co-insurance) in the framework of risk spreading for one object of coverage conducted on a case-by-case basis as referred to in Article 70 paragraph (2) are required to meet the following provisions:
a. the leader of simultaneous insurance coverage (co-insurance) bears the largest portion of risk; b. the claims payment process is conducted by the leader or other members with the approval of the leader; and
c. is stipulated in a written agreement and/or other documents.
(2) Written agreements and/or other documents as referred to in paragraph (1) letter c must contain at least the following:
a. the composition of members consisting of the leader and members; b. the leader has authority in making underwriting decisions and claims approval;
c. the method of payment of Premium and/or contribution by policyholders, insureds, or participants; and
d. procedures for receiving and forwarding Premium and/or contribution between the leader and members.
(3) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies are required to state the name of the Insurance Company, Sharia Insurance Company, or Sharia Unit on Insurance Company and the portion of coverage of each member of the simultaneous insurance coverage (co-insurance) in the policy. (4) The issuance of insurance policies is conducted by the leader. (5) The leader is required to explain to policyholders, insureds, or participants regarding the membership of simultaneous insurance coverage (co-insurance) before the coverage of insurance. (6) Claims payment for insurance coverage conducted through simultaneous insurance coverage (co-insurance) must be paid in full according to the agreed claims amount without having to wait for the payment of the coverage portion from each member of the simultaneous insurance coverage (co-insurance). (7) In the event that claims payment for insurance coverage conducted through simultaneous insurance coverage (co-insurance) as referred to in paragraph (6) has been paid by the leader or one of the members, other members are required to pay their obligations according to their portion within a maximum of 15 (fifteen) working days since all claims are paid.

CHAPTER VIII
FRAUD
First Section
Anti Fraud
Article 72
(1) In the framework of controlling the risk of fraud occurring, Insurance Companies or Sharia Units are required to implement fraud control functions and apply anti-fraud strategies.
(2) The fraud control function as referred to in paragraph (1) includes the following aspects:
a. active management supervision; b. organization and accountability;
c. control and monitoring; and
d. education and training.
(3) In the framework of implementing the fraud control and monitoring aspect as referred to in paragraph (2) letter c, Insurance Companies or Sharia Units are required to apply anti-fraud strategies that include:
a. prevention; b. detection;
c. investigation, reporting, and sanctions; and
d. monitoring, evaluation, and follow-up.
(4) Insurance Companies or Sharia Units are required to submit anti-fraud strategy reports to OJK as follows:
a. reports on the implementation of anti-fraud strategies every semester for the end-of-month positions of June and December, within a maximum of 10 (ten) working days after the end of the month; b. reports on every fraud estimated to have a significant negative impact on the Insurance Company or Sharia Unit, policyholders, insureds, participants, and/or Ceding Companies, including those that have the potential to become public attention, within a maximum of 3 (three) working days since the company management signs the fraud reporting document; and
c. reports as referred to in letter b must contain at least:

the name of the perpetrator;
the form or type of deviation;
the location of the incident;
brief information regarding the modus operandi; and
indications of loss.
(5) Further provisions regarding fraud control and the implementation of anti-fraud strategies for Insurance Companies or Sharia Units as referred to in paragraph (1) and anti-fraud strategy reports as referred to in paragraph (4) are further regulated in an OJK Circular Letter.

Second Section
Anti-Money Laundering and
Prevention of Terrorism Financing
Article 73
(1) Insurance Companies or Sharia Units are required to implement anti-money laundering and prevention of terrorism financing programs.
(2) In implementing anti-money laundering and prevention of terrorism financing programs as referred to in paragraph (1), Insurance Companies or Sharia Units are required to refer to OJK regulations regarding the implementation of anti-money laundering and prevention of terrorism financing programs.

CHAPTER IX
MANDATORY INSURANCE PROGRAMS
Article 74
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies may conduct Mandatory Insurance Programs.
(2) Mandatory Insurance Programs as referred to in paragraph (1) are intended to serve the entire community or specific groups of society.
(3) Mandatory Insurance Programs conducted by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies are conducted competitively.

Article 75
(1) Mandatory Insurance Programs may be conducted by Insurance Companies, Sharia Insurance Companies, or Sharia Units on Insurance Companies in accordance with their line of business and are required to meet the following provisions:
a. have offices outside the head office that can support Mandatory Insurance Programs except for Mandatory Insurance Programs conducted by local governments; b. have a solvency ratio (risk-based capital) of 200% (two hundred percent);
c. have a liquidity ratio of 150% (one hundred fifty percent); and
d. have employees who have received training related to the management of Mandatory Insurance Program risks.
(2) Mandatory Insurance Programs as referred to in Article 74 paragraph (1) may be conducted individually or in a consortium.

Article 76
(1) Every Insurance Company, Sharia Insurance Company, or Sharia Unit on Insurance Company individually or in a consortium that conducts Mandatory Insurance Programs as referred to in Article 75 paragraph (2) is required to obtain prior approval from OJK. (2) Applications for approval as referred to in paragraph (1) refer to provisions regarding approval and recording of insurance products as regulated in OJK regulations regarding insurance products and insurance marketing.

CHAPTER X
SANCTIONS
Article 77
(1) Violations of the provisions in Article 2, Article 3, Article 4, Article 5, Article 7 paragraph (2) and paragraph (3), Article 8 paragraph (1), paragraph (2), and paragraph (3), Article 9, Article 12, Article 13, Article 14, Article 15 paragraph (1), paragraph (2), paragraph (4), and paragraph (5), Article 16 paragraph (1) and paragraph (2), Article 17, Article 18, Article 19, Article 20, paragraph (3), and paragraph (4), Article 24, Article 25 paragraph (1), Article 26, Article 27 paragraph (2), Article 28, Article 29 paragraph (5), paragraph (6), and paragraph (8), Article 30, Article 31, Article 32, Article 33, Article 34, Article 35, Article 36, Article 37 paragraph (1) and paragraph (3), Article 38 paragraph (1) and paragraph (3), Article 39 paragraph (1), paragraph (2), and paragraph (3), Article 40, Article 41, Article 44 paragraph (3), Article 45 paragraph (1), paragraph (2), and paragraph (3), Article 46 paragraph (1) and paragraph (2), Article 47, Article 48 paragraph (1) and paragraph (2), Article 49, Article 50, Article 51 paragraph (2), Article 53, Article 54 paragraph (1), paragraph (2), paragraph (4), paragraph (5), paragraph (6), and paragraph (8), Article 55 paragraph (2), Article 56 paragraph (2) and paragraph (4), Article 57 paragraph (2), Article 58 paragraph (2), Article 59 paragraph (2), Article 60 paragraph (1), paragraph (6), and paragraph (7), Article 61, Article 63, Article 65 paragraph (2), Article 66 paragraph (1), paragraph (4), and paragraph (5), Article 67 paragraph (3), paragraph (5), paragraph (6), and paragraph (7), Article 68, Article 69, Article 71 paragraph (1), paragraph (2), paragraph (3), paragraph (5), paragraph (6), and paragraph (7), Article 72 paragraph (1), paragraph (3), and paragraph (4), Article 73, Article 75 paragraph (1), and Article 76 paragraph (1) of this OJK Regulation are subject to administrative sanctions in the form of:
a. written warnings; b. restrictions on business activities, for part or all of the business activities; and
c. revocation of business licenses.

(2) In the event that violations of the provisions in Article 3, Article 5, Article 7 paragraph (2) and paragraph (3), Article 8 paragraph (1) and paragraph (2), Article 9, Article 12 paragraph (3), Article 14, Article 15 paragraph (1), paragraph (2), paragraph (4), and paragraph (5), Article 16 paragraph (1) and paragraph (2), Article 17, Article 18, Article 19, Article 20, paragraph (3), and paragraph (4), Article 24, Article 25 paragraph (1), Article 26, Article 27 paragraph (2), Article 28, Article 29 paragraph (5), paragraph (6), and paragraph (8), Article 30, Article 31, Article 32, Article 33, Article 34, Article 35, Article 36, Article 37 paragraph (1) and paragraph (3), Article 38 paragraph (1) and paragraph (3), Article 39 paragraph (1), paragraph (2), and paragraph (3), Article 40, Article 41, Article 44 paragraph (3), Article 45 paragraph (1), paragraph (2), and paragraph (3), Article 47, Article 48 paragraph (1) and paragraph (2), Article 49, Article 50, Article 51 paragraph (2), Article 53, Article 54 paragraph (1), paragraph (2), paragraph (4), paragraph (5), paragraph (6), and paragraph (8), Article 55 paragraph (2), Article 56 paragraph (2) and paragraph (4), Article 57 paragraph (2) and paragraph (4), Article 58 paragraph (2), Article 59 paragraph (2), Article 60 paragraph (1), paragraph (6), and paragraph (7), Article 61, Article 63, Article 65 paragraph (2), Article 66 paragraph (1), paragraph (4), and paragraph (5), Article 67 paragraph (3), paragraph (5), paragraph (6), and paragraph (7), Article 68, Article 69, Article 71 paragraph (1), paragraph (2), paragraph (3), paragraph (5), paragraph (6), and paragraph (7), Article 72 paragraph (1), paragraph (3), and paragraph (4), Article 73, Article 75 paragraph (1), and Article 76 paragraph (1) of this OJK Regulation are conducted by Sharia Units, they are subject to administrative sanctions in the form of:
a. written warnings; b. restrictions on the business activities of the Sharia Unit, for part or all of the business activities; and
c. revocation of the license to establish the Sharia Unit.
(3) Administrative sanctions as referred to in paragraph (1) or paragraph (2) are conducted in a phased manner.

(4) In addition to administrative sanctions as referred to in paragraph (1) and paragraph (2), the OJK may impose additional sanctions in the form of:
a. a ban on marketing insurance products or Sharia insurance products for specific business lines; and/or b. a ban on becoming a shareholder, controller, Board of Directors, Board of Commissioners, or equivalent to a shareholder, controller, Board of Directors, and Board of Commissioners, or holding an executive position below the Board of Directors, or equivalent to an executive position below the Board of Directors, in an insurance company. (5) The OJK may impose the revocation of a business license without prior imposition of other administrative sanctions for violations of the provisions of Article 8 paragraph (3) of this OJK Regulation.

Article 78
(1) In the event that a Company violates the provisions in Article 16 paragraph (1) and Article 76 paragraph (1) of this OJK Regulation, it shall be subject to additional administrative sanctions in the form of administrative fines. (2) Violations of the provisions in Article 16 paragraph (1) as referred to in paragraph (1) shall be subject to an administrative fine of IDR 100,000,000.00 (one hundred million Rupiah) for the use of each Insurance Agent. (3) Violations of the provisions in Article 76 paragraph (1) as referred to in paragraph (1) shall be subject to an administrative fine of IDR 100,000,000.00 (one hundred million Rupiah).

Article 79
Procedures and procedures for the imposition of sanctions are regulated in OJK regulations regarding procedures and procedures for the imposition of administrative sanctions.

CHAPTER XI
TRANSITIONAL PROVISIONS

Article 80
(1) General Insurance Companies that have conducted Credit Insurance and Suretyship business activities prior to the enactment of this OJK Regulation must adjust to the provisions of this OJK Regulation within a maximum period of 1 (one) year from the enactment of this OJK Regulation. (2) In the event that implementing regulations regarding the conduct of Credit Insurance and Suretyship business activities have not been established, provisions regarding the conduct of Credit Insurance and Suretyship business shall be subject to the Minister of Finance Regulation Number 124/PMK.010/2008 concerning the Conduct of Credit Insurance and Suretyship Business Lines.

Article 81
(1) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies that have conducted fee-based business activities in administrative service only (ASO) prior to the enactment of this OJK Regulation shall remain valid until the expiration of the aforementioned administrative service only (ASO) agreement. (2) Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies that have conducted insurance coverage for risk spreading for a single insured object on a case-by-case basis prior to the enactment of this OJK Regulation shall remain valid until the expiration of the aforementioned coverage. (3) Companies or Sharia Units that have conducted cooperation for business acquisition or cooperation for implementing part of the functions in conducting their business prior to the enactment of this OJK Regulation shall remain valid until the expiration of the aforementioned cooperation.

Article 82
In the event that OJK regulations regarding procedures and procedures for the imposition of administrative sanctions have not been enacted, provisions regarding procedures and procedures for the imposition of administrative sanctions shall be subject to Government Regulation Number 73 of 1992 concerning the Conduct of Insurance Business as amended several times, lastly by Government Regulation Number 81 of 2008 concerning the Third Amendment to Government Regulation Number 73 of 1992 concerning the Conduct of Insurance Business.

Article 83
Insurance Companies or Sharia Insurance Companies that have placed data in data centers and disaster recovery centers outside the territory of Indonesia at the time this OJK Regulation is enacted must adjust to this OJK Regulation within a maximum period of October 12, 2017.

CHAPTER XII
CLOSING PROVISIONS

Article 84
This OJK Regulation shall come into force on the date of enactment.

In order that everyone knows it, ordering the enactment of this OJK Regulation by placing it in the State Bulletin of the Republic of Indonesia.

Established in Jakarta on December 23, 2016
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY,

signed
MULIAMAN D. HADAD

Enacted in Jakarta on December 28, 2016
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE BULLETIN OF THE REPUBLIC OF INDONESIA YEAR 2016 NUMBER 302 A copy in accordance with the original Legal Director 1 Legal Department signed Yuliana

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 69 /POJK.05/2016
CONCERNING
THE CONDUCT OF BUSINESS OF INSURANCE COMPANIES, SHARIA INSURANCE COMPANIES, REINSURANCE COMPANIES, AND SHARIA REINSURANCE COMPANIES

I. GENERAL
The issuance of Law Number 40 of 2014 concerning Insurance is one of the important milestones in the history of insurance in Indonesia, considering that in the aforementioned Law there are new matters related to supervision and the development of the insurance industry. Law Number 40 of 2014 concerning Insurance mandates the refinement of regulations and supervision of all insurance industry activities that have developed rapidly, marked by increasing business volume, increasing utilization of insurance services by the public, and increasingly varied insurance services in line with the development of public needs. The increased role of the insurance industry in driving national development will occur if the insurance industry can better meet the needs of the public in facing the risks they face and in conducting their business activities. In addition, efforts to create a healthier, reliable, trustworthy, and generally competitive insurance industry can be carried out by establishing new regulations or refining existing regulations.

In order to optimize the role of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies, which are part of the insurance industry, to support the increase in national economic growth and maintain financial system stability as a foundation for sustainable development, and to realize public financial independence and support efforts to increase equity in development, one of the strategies developed by the OJK is the strengthening of regulatory and supervisory aspects comprehensively with an emphasis on industry competitiveness to support financial system stability. Regulations regarding the conduct of business of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies are one of the regulations that are the fulfillment of the mandate of Law Number 40 of 2014 concerning Insurance.

II. ARTICLE BY ARTICLE
Article 1
Clear enough.

Article 2
Clear enough.

Article 3
Clear enough.

Article 4
Letter a
Number 1
Clear enough.
Number 2
What is meant by fee-based business activities is business activities to

3 - -
Discussion... Pension ... to market financial services products including, money market funds or other products that are products of financial services institutions that have received permission from the OJK. Number 3 Clear enough. Number 4 What is meant by "other business activities based on government assignment" includes assignments for the guarantee of people's business credit (KUR). Letter b Clear enough. Letter c Clear enough. Letter d Number 1 What is meant by administrative service only (ASO) in the context of employee benefits is the provision of services by Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies in managing health facilities or pension programs of a company for its employees. Number 2 What is meant by marketing products from financial services institutions includes, among others, selling mutual fund securities based on cooperation contracts with mutual fund investment managers. Letter e Clear enough.

Article 5
Clear enough.

Article 6
Clear enough.

4 - -
Article 7
Paragraph (1)
Letter a
Clear enough.
Letter b
Clear enough.
Letter c
What is meant by "having an actuary" is that the company has employed an actuary.
Letter d
What is meant by "investment manager" is an investment expert who has passed the exam as a deputy investment manager and has experience in the field for 3 (three) years.
Letter e
Clear enough.
Letter f
What is meant by "adequate supporting resources" is supporting resources that are appropriate for the type of expansion of the business scope to be conducted by Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies, including human resources and information systems. Paragraph (2) Clear enough. Paragraph (3) What is meant by the cessation of PAYDI product marketing is the cessation of the issuance of new PAYDI policies. Paragraph (4) Clear enough. Paragraph (5) Clear enough. Paragraph (6) Clear enough.
5 - -
Article 8
Paragraph (1)
Letter a
What is meant by "employees assigned to conduct fee-based business activities" are employees of the Company, Sharia Units, and/or marketing personnel (company agents) who have undergone special education and training in the field of products to be marketed and have proof of membership, certificates and/or permits unless otherwise regulated in laws and regulations governing the marketed products. Letter b Clear enough. Letter c Clear enough. Paragraph (2) What is meant by "ceasing fee-based business activities" includes:
a. for administrative service only (ASO) is not making new agreements or extending agreements that have expired; and b. for the sale of mutual fund securities based on cooperation contracts with mutual fund investment managers is the cessation of marketing mutual fund products. Paragraph (3) Clear enough. Paragraph (4) Clear enough.

Article 9
Clear enough.

Article 10
Paragraph (1)
Clear enough.

6 - -
Paragraph (4) ...
Paragraph (2)
What is meant by "complete" is documents and their contents in accordance with the provisions required in laws and regulations.

Article 11
Clear enough.

Article 12
Clear enough.

Article 13
Clear enough.

Article 14
Clear enough.

Article 15
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Letter a
What is meant by "easy to understand" is avoiding foreign languages and technical terms that have not been generally accepted.
Letter b
Clear enough.
Letter c
Clear enough.
Letter d
Clear enough.

7 - -
Letter e
Clear enough.
Letter f
Clear enough.
Paragraph (5)
Clear enough.

Article 16
Clear enough.

Article 17
Paragraph (1)
What is meant by "Insurance Companies, Sharia Insurance Companies, or Sharia Units in other similar Insurance Companies" are:
a. General Sharia Insurance Companies similar to other General Sharia Insurance Companies and General Insurance Companies that have Sharia Units; b. Life Sharia Insurance Companies similar to Life Sharia Insurance Companies and Life Insurance Companies that have Sharia Units;
c. General Insurance Companies similar to General Insurance Companies; or
d. Life Insurance Companies similar to Life Insurance Companies.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.

Article 18
Letter a
Clear enough.
Letter b
What is meant by "information regarding insurance products" includes:

8 - -
a. benefits; b. conditions and documents for claim submission;
c. risks covered and excluded;
d. amount and method of Premium payment; and e. costs charged to policyholders, insured parties, or participants.
What is meant by "important information" includes:
a. conditions under which coverage becomes void; and b. lapse conditions and their restoration.
Letter c
Acceptance or rejection can be done through electronic communication media or other nonelectronic media.
Letter d
Clear enough.
Letter e
Clear enough.
Letter f
Clear enough.

Article 19
Letter a
Notifications can be done through communication means including:

notification letters;
SMS;
mass media;
email;
facsimile; or
websites.
Letter b
Clear enough.

Article 20
Clear enough.

9 - -
Article 21
Paragraph (1)
What is meant by "dispute" is disputes in cases of twisting (policy transfer) or poaching (Insurance Agent poaching).
Paragraph (2)
Clear enough.

Article 22
Clear enough.

Article 23
Clear enough.

Article 24
Paragraph (1)
Clear enough.
Paragraph (2)
What is meant by "receiving policies" is receiving policies in hard copy or soft copy form (delivery via digital or electronic means).
Paragraph (3)
Clear enough.
Paragraph (4)
What is meant by "costs" is as follows:
a. stamp duty; b. administrative costs;
c. health examination costs and/or survey costs (if any);
d. risk premiums that have run (from issuance until the cancellation request); and e. investment losses (if any).
Paragraph (5)
Clear enough.

Article 38 ...
Article 25
Paragraph (1)
What is meant by "policy cost details" are administrative costs, and other costs paid in the context of policy issuance.
Paragraph (2)
Clear enough.

Article 26
What is meant by "part of the Premium or contribution paid to Insurance Brokers" is brokerage fees.

Article 27
Paragraph (1)
What is meant by "giving approval" is to provide a limitation that Insurance Agents can only receive Premium or contribution payments from policyholders, insured parties, or participants after receiving approval from Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies. Paragraph (2) Clear enough.

Article 28
Clear enough.

Article 29
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.
Paragraph (6)
Clear enough.
Paragraph (7)
What is meant by assisting the insured in claim settlement includes, among others, claiming claims from Insurance Brokers or advancing claim payments first.
Paragraph (8)
What is meant by "off-set" is reconciliation between debtors and creditors to adjust or settle debts.
Paragraph (9)
Clear enough.

Article 30
Clear enough.

Article 31
Paragraph (1)
What is meant by "brokerage fees" is remuneration received by Insurance Brokers or Reinsurance Brokers that can be paid directly by policyholders, insured parties, or participants or become part of the Premium. Paragraph (2) Clear enough.

Article 32
Clear enough.

Article 33
Paragraph (1)
What is meant by "guaranteeing certain profits" is the existence of clauses that can be interpreted as meaning that

the reinsurer or retrocessionaire will definitely receive profits from the agreement.
Paragraph (2)
Clear enough.

Article 34
What is meant by "underwriting guidelines" are guidelines containing or considering matters including:
a. the possibility of risks occurring in the future; b. mitigation steps to reduce the possibility of risks occurring; and
c. types of risks to be covered.

Article 35
What is meant by "all covered risks are fully covered" is that the application or proposal of prospective insured parties has gone through the underwriting process and has received approval for coverage, including the necessary reinsurance or co-insurance support.

Article 36
Clear enough.

Article 37
Paragraph (1)
What is meant by actions that can be categorized as delaying claim settlement or payment include:
a. extending the claim settlement process by requesting the submission of certain documents, which is then followed by requesting the submission of other documents that essentially contain the same information; b. delaying claim settlement and payment due to waiting for the settlement and/or payment of reinsurance claims;
c. not settling claims that are part of insurance coverage due to reasons related to the settlement of claims that are part of insurance coverage in 1 (one) policy;
d. delaying the appointment of insurance loss assessors, if insurance loss assessor services are needed in the claim settlement process; and e. applying claim settlement procedures that are not in accordance with general insurance business practices. Paragraph (2) What is meant by "insurance loss assessment companies" are companies conducting business activities in claim assessment services and/or consultation services for insurance objects. Paragraph (3) Clear enough.

Article 38
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
What is meant by "claim service providers" includes, among others, hospitals cooperating in health insurance and partner workshops in motor vehicle insurance.

Article 39
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Letter a
Clear enough.
Letter b
What is meant by "insurance objects" are life and body, human health, legal liability,

property and services, and all other interests that can be lost, damaged, depreciated, and/or decreased in value.
Letter c
Clear enough.
Paragraph (4)
Clear enough.

Article 40
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
What is meant by "written approval" is the existence of a statement letter or power of attorney from policyholders, insured parties, or participants to insurance brokers.

Article 41
Clear enough.

Article 42
Paragraph (1)
Letter a
Clear enough.
Letter b
What is meant by "technical aspects" includes:
a. development of product strategies and concepts; b. design and market identification analysis;
c. operational underwriting management; and
d. claim verification.
Letter c
Clear enough.
Letter d
Clear enough.

Letter e
Clear enough.
Paragraph (2)
Letter a
What is meant by "certain amounts determined by Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies" are amounts determined by Insurance Companies, Sharia Insurance Companies, or Sharia Units in Insurance Companies of at least the amount given to officials 1 (one) level below the Board of Directors. Letter b Clear enough.

Article 43
Paragraph (1)
Clear enough.
Paragraph (2)
Letter a
What is meant by "certain amounts" determined by Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units in Reinsurance Companies are amounts determined by Reinsurance Companies, Sharia Reinsurance Companies, or Sharia Units in Reinsurance Companies of at least the amount given to officials 1 (one) level below the Board of Directors. Letter b Clear enough.

Article 44
Clear enough.

Article 45
Clear enough.

Article 46
Clear enough.

Article 47
Clear enough.

Article 48
Clear enough.

Article 49
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
What is meant by "data centers (data center)" are facilities used to place electronic systems and related components for the purpose of placing, storing, and processing data.
What is meant by "disaster recovery centers" are facilities used to restore data or information and important electronic system functions that are disrupted or damaged due to disasters caused by nature or humans.

Article 50
Letter a
What is meant by "personal data of policyholders, insured parties, or participants" includes the following:

individuals:
a) name; b) address; c) date of birth and/or age; d) telephone number; and/or e) mother's maiden name; and
corporations:
a) name:
b) address; c) telephone number; d) composition of the Board of Directors and Commissioners or equivalents, including identity documents such as ID cards/passports/residence permits; and/or e) composition of shareholders. Letter b Clear enough. Letter c What is meant by "population data and information" includes:
identity cards (KTP); and
passports.
Letter d
What is meant by "data and information in the field of legal entity administration" includes:
company registration certificates (TDP);
tax identification numbers (NPWP);
business trade permits; and
other legalities.

Article 51
Clear enough.

Article 52
Clear enough.

Article 53
Clear enough.

Article 54
Clear enough.

Article 55
Clear enough.

Article 56
Clear enough.

Article 57
Clear enough.

Article 58
Clear enough.

Article 59
Clear enough.

Article 60
Clear enough.

Article 61
Clear enough.

Article 62
Clear enough.

Article 63
Clear enough.

Article 64
Clear enough.

Article 65
Paragraph (1)
What is meant by "business entities that employ Insurance Agents" are insurance agent companies.
Paragraph (2)
Clear enough.

Article 66
Paragraph (1)
What is meant by "active" is activities that provide explanations regarding insurance product information including:
a. benefits; b. conditions and documents for claim submission;
c. risks covered and excluded;
d. amount and method of Premium or contribution payment; and e. costs charged to policyholders, insured parties, or participants.
Paragraph (2)
Clear enough.
Paragraph (3)
Clear enough.
Paragraph (4)
Clear enough.
Paragraph (5)
Clear enough.

Article 67
Clear enough.

Article 68
Clear enough.

Article 69
Clear enough.

Article 70
Paragraph (1)
Clear enough.
Paragraph (2)
What is meant by "insurance products designed to be marketed and risks managed jointly" are mutual insurance products.

Paragraph (3)
What is meant by "insurance products in the same business lines" are insurance products that guarantee the same risk causes.
Paragraph (4)
Clear enough.

Article 71
Clear enough.

Article 72
Paragraph (1)
What is meant by "fraud" is intentional deviation or tolerance actions to deceive, trick, or manipulate Companies or Sharia Units, policyholders, insured parties, participants, or other parties, so that Companies, Sharia Units, policyholders, insured parties, participants, or other parties suffer losses and/or fraud perpetrators obtain financial benefits, directly or indirectly. Paragraph (2) Clear enough. Paragraph (3) Clear enough. Paragraph (4) Clear enough. Paragraph (5) Clear enough.

Article 73
Paragraph (1)
What is meant by "anti-money laundering and prevention of terrorism financing" is efforts to prevent and eradicate the crimes of Money Laundering and Terrorism Financing.
What is meant by "money laundering" is money laundering as referred to in Law Number 8 of 2010 concerning the Prevention and Eradication of Money Laundering Crimes.
What is meant by "terrorism financing" is terrorism financing as referred to in Law Number 9 of 2013 concerning the Prevention and Eradication of Terrorism Financing Crimes.
Paragraph (2)
Clear enough.

Article 74
Paragraph (1)
Clear enough.
Paragraph (2)
Clear enough.
Paragraph (3)
What is meant by "competitive" is not conducted by one Company or one Sharia Unit alone.

Article 75
Paragraph (1)
Letter a
Clear enough.
Letter b
What is meant by "solvency level" in paragraph (1) includes the solvency level of Tabarru' Funds and Tanahud Funds and the solvency level of Company funds for Sharia Insurance Companies and Sharia Units in Insurance Companies. Letter c What is meant by "liquidity level" is the ratio of current assets to current liabilities as referred to in the latest annual financial reports audited by public accountants registered with the OJK.

Letter d
Clear enough.
Paragraph (2)
Clear enough.

Article 76
Clear enough.

Article 77
Clear enough.

Article 78
Clear enough.

Article 79
Clear enough.

Article 80
Clear enough.

Article 81
Clear enough.

Article 82
Clear enough.

Article 83
Clear enough.

Article 84
Clear enough.

SUPPLEMENT TO THE STATE BULLETIN OF THE REPUBLIC OF INDONESIA NUMBER 5992

POJK on the Business Operation of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies

Lineage: Superseded

Timeline