POJK on the Business Operations of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessors

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 70/POJK.05/2016
ON
THE BUSINESS OPERATIONS OF INSURANCE BROKERAGE COMPANIES, REINSURANCE BROKERAGE COMPANIES, AND INSURANCE LOSS ASSESSORS BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to implement the provisions of Article 18 paragraph (4), Article 24 paragraph (3), Article 26 paragraph (2), Article 29 paragraph (5), and Article 31 paragraph (5) of Law Number 40 of 2014 concerning Insurance, it is necessary to establish a Financial Services Authority Regulation on the Business Operations of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessors; 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

DECIDES:
Establish: FINANCIAL SERVICES AUTHORITY REGULATION ON THE BUSINESS OPERATIONS OF INSURANCE BROKERAGE COMPANIES, REINSURANCE BROKERAGE COMPANIES, AND INSURANCE LOSS ASSESSORS.

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

1. Insurance Brokerage Business is a consulting and/or intermediary service business in closing insurance or sharia insurance and handling claim settlements, acting on behalf of and for the policyholder, insured, or participant as referred to in Law Number 40 of 2014 concerning Insurance.
2. Reinsurance Brokerage Business is a consulting and/or intermediary service business in placing reinsurance or sharia reinsurance and handling claim settlements, acting on behalf of and for insurance companies, sharia insurance companies, guarantee companies, sharia guarantee companies, reinsurance companies, or sharia reinsurance companies that place reinsurance or sharia reinsurance as referred to in Law Number 40 of 2014 concerning Insurance.
3. Insurance Loss Assessment Business is a claim assessment service and/or consulting service on insurance objects as referred to in Law Number 40 of 2014 concerning Insurance.
4. Insurance Brokerage Company is a company that conducts Insurance Brokerage Business.
5. Reinsurance Brokerage Company is a company that conducts Reinsurance Brokerage Business.
6. Insurance Loss Assessor Company is a company that conducts Insurance Loss Assessment Business.
7. Insurance Company is a general insurance company and life insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
8. Sharia Insurance Company is a sharia general insurance company and sharia life insurance company as referred to in Law Number 40 of 2014 concerning Insurance.
9. Reinsurance Company is a company that conducts reinsurance business against risks faced by Insurance Companies, guarantee companies, or other reinsurance companies.
10. Sharia Reinsurance Company is a company that conducts risk management based on sharia principles against risks faced by Sharia Insurance Companies, sharia guarantee companies, or other sharia reinsurance companies.
11. Insurance Broker is a person who works at an Insurance Brokerage Company and meets the requirements to provide recommendations or represent policyholders, insured, or participants in closing insurance or sharia insurance and/or claim settlements as referred to in Law Number 40 of 2014 concerning Insurance.
12. Reinsurance Broker is a person who works at a Reinsurance Brokerage Company and meets the requirements to provide recommendations or represent Insurance Companies, Sharia Insurance Companies, guarantee companies, sharia guarantee companies, Reinsurance Companies, or Sharia Reinsurance Companies in closing reinsurance or sharia reinsurance and/or claim settlements as referred to in Law Number 40 of 2014 concerning Insurance.
13. Expert Personnel is an individual who has specific qualifications and/or expertise and is appointed as expert personnel at the Insurance Brokerage Company, Reinsurance Brokerage Company, or Insurance Loss Assessor Company where they work.
14. Reinsurer is a Reinsurance Company, Sharia Reinsurance Company, general insurance company, or sharia general insurance company that accepts reinsurance including retrocession.
15. Ceding Company is:
    a. a general insurance company that transfers part of its risk to a Reinsurance Company or another general insurance company; b. a sharia general insurance company that transfers part of its risk to a Sharia Reinsurance Company, a sharia unit within a Reinsurance Company, another sharia general insurance company, or a sharia unit within a general insurance company;
    c. a sharia unit within a general insurance company that transfers part of its risk to a Sharia Reinsurance Company, a sharia unit within a Reinsurance Company, another sharia general insurance company, or a sharia unit within a general insurance company;
    d. a life insurance company that transfers part of its risk to a Reinsurance Company; e. a sharia life insurance company that transfers part of its risk to a Sharia Reinsurance Company or a sharia unit within a Reinsurance Company; f. a sharia unit within a life insurance company that transfers part of its risk to a Sharia Reinsurance Company or a sharia unit within a Reinsurance Company; g. a guarantee company that transfers part of its risk to a Reinsurance Company; or h. a sharia guarantee company or a sharia unit within a guarantee company that transfers part of its risk to a Sharia Reinsurance Company or a sharia unit within a Reinsurance Company.
16. Client is the party that provides loss assessment tasks and/or consulting services on insurance objects to an Insurance Loss Assessor Company.
17. Insurance Object is life and body, human health, legal liability, goods and services, and all other interests that can be lost, damaged, lost, and/or decreased in value as referred to in Law Number 40 of 2014 concerning Insurance.
18. Insurance Policy is an insurance agreement deed or other documents equivalent to an insurance agreement deed, and other documents that are an inseparable part of the insurance agreement, which are made in writing and contain an agreement between an Insurance Company or Sharia Insurance Company, and the policyholder, insured, or participant.
19. Premium Account is an account of an Insurance Brokerage Company or Reinsurance Brokerage Company at a conventional commercial bank or sharia commercial bank used to hold:
    a. premiums or contributions received from policyholders, insured, participants, or Ceding Companies; or b. claims received from Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, or Sharia Reinsurance Companies.
20. Operational Account is an account of an Insurance Brokerage Company or Reinsurance Brokerage Company at a conventional commercial bank or sharia commercial bank specifically used for operational activities.
21. Financial Services Authority, hereinafter abbreviated as OJK, is an independent institution that has 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 INSURANCE BROKERAGE, REINSURANCE BROKERAGE, AND INSURANCE LOSS ASSESSMENT BUSINESS
Article 2
(1) Insurance Brokerage Companies may only conduct Insurance Brokerage Business.
(2) Reinsurance Brokerage Companies may only conduct Reinsurance Brokerage Business.
(3) Insurance Loss Assessor Companies may only conduct Insurance Loss Assessment Business.

Article 3
(1) Insurance Brokerage Companies as referred to in Article 2 paragraph (1) act on behalf of and for the policyholder, insured, or participant.
(2) Reinsurance Brokerage Companies as referred to in Article 2 paragraph (2) act on behalf of and for Ceding Companies.

CHAPTER III
BUSINESS CONDUCT STANDARDS
Part One
Premiums or Contributions
Article 4
(1) Insurance Brokerage Companies may receive premium or contribution payments from policyholders, insured, or participants.
(2) Reinsurance Brokerage Companies may receive premium or contribution payments from Ceding Companies.

Article 5
(1) Insurance Brokerage Companies are obligated to hand over premiums or contributions received from policyholders, insured, or participants to Insurance Companies or Sharia Insurance Companies within a maximum of 30 (thirty) working days since the premium or contribution was received or in accordance with the premium or contribution payment period established in the relevant Insurance Policy, whichever is shorter. (2) In the event that Insurance Brokerage Companies have not handed over premium or contribution payments to Insurance Companies or Sharia Insurance Companies after the expiration of the period as referred to in paragraph (1), Insurance Brokerage Companies are obligated to be responsible for claim or benefit payments that arise. (3) In the event that Insurance Brokerage Companies hand over premiums or contributions to Insurance Companies or Sharia Insurance Companies after the expiration of the period as referred to in paragraph (1) and there is no cancellation from the Insurance Company or Sharia Insurance Company within a period of 3 (three) working days, the responsibility for claim or benefit payments that arise shifts from the Insurance Brokerage Company to the Insurance Company or Sharia Insurance Company since the premium or contribution was received by the Insurance Company or Sharia Insurance Company.

Article 6
(1) Reinsurance Brokerage Companies are obligated to hand over premiums or contributions received from Ceding Companies to Reinsurers within a maximum of 30 (thirty) working days since the premium or contribution was received or in accordance with the premium or contribution payment period established in the relevant reinsurance agreement, whichever is shorter. (2) In the event that Reinsurance Brokerage Companies have not handed over premium or contribution payments to Reinsurers after the expiration of the period as referred to in paragraph (1), Reinsurance Brokerage Companies are obligated to be responsible for claim or benefit payments that arise. (3) In the event that Reinsurance Brokerage Companies hand over premiums or contributions to Reinsurance Companies or Sharia Reinsurance Companies after the expiration of the period as referred to in paragraph (1) and there is no cancellation from the Reinsurance Company or Sharia Reinsurance Company within a period of 3 (three) working days, the responsibility for claim or benefit payments that arise shifts from the Reinsurance Brokerage Company to the Reinsurance Company or Sharia Reinsurance Company since the premium or contribution was received by the Reinsurance Company or Sharia Reinsurance Company.

Article 7
(1) The responsibility for claim or benefit payments that arise as referred to in Article 5 paragraph (2) and Article 6 paragraph (2) must be carried out by Insurance Brokerage Companies or Reinsurance Brokerage Companies in accordance with the claim or benefit payment period established in the Insurance Policy or reinsurance agreement, or within a maximum of 30 (thirty) working days since the claim or benefit payment value was approved by the policyholder, insured, participant, or Ceding Company, whichever is shorter. (2) The determination of claim or benefit payment values as referred to in paragraph (1) can be done based on:
a. the assessment results of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, or Sharia Reinsurance Companies; or b. the assessment results of Insurance Loss Assessor Companies. (3) In the event that the determination of claim or benefit payment values is done based on the assessment results of Insurance Loss Assessor Companies as referred to in paragraph (2) letter b, the costs incurred are charged to Insurance Brokerage Companies or Reinsurance Brokerage Companies.

Article 8
(1) Insurance Brokerage Companies, in making premium or contribution payments to Insurance Companies or Sharia Insurance Companies, are obligated to include payment details for each Insurance Policy within a maximum of 15 (fifteen) working days since the premium or contribution payment to the Insurance Company or Sharia Insurance Company. (2) Reinsurance Brokerage Companies, in making premium or contribution payments to Reinsurers, are obligated to include payment details for each reinsurance agreement within a maximum of 15 (fifteen) working days since the premium or contribution payment to the Reinsurer. (3) In the event that premium or contribution payments as referred to in paragraph (2) are reinsurance closures in the form of treaty reinsurance, Reinsurance Brokerage Companies, in making premium or contribution payments to Reinsurers, must be based on a statement of account and/or other documents regulated in the reinsurance agreement.

Part Two
Claim Handling
Article 9
(1) Insurance Brokerage Companies are obligated to assist policyholders, insured, or participants in meeting the requirements for submitting claims to Insurance Companies or Sharia Insurance Companies. (2) Reinsurance Brokerage Companies are obligated to assist Ceding Companies in meeting the requirements for submitting claims to Reinsurers.

Article 10
(1) In order to assist policyholders, insured, or participants as referred to in Article 9 paragraph (1), Insurance Brokerage Companies are obligated to take at least the following steps:
a. provide initial notification to Insurance Companies or Sharia Insurance Companies regarding claim or benefit submission information from policyholders, insured, or participants within a maximum of 1 (one) working day after receiving claim submission information from policyholders, insured, or participants; b. provide a response to claim or benefit notifications from policyholders, insured, or participants by informing supporting documents needed by policyholders, insured, or participants in the claim or benefit submission process within a maximum of 3 (three) working days since the claim or benefit notification was received; and
c. submit supporting documents as referred to in letter b to Insurance Companies or Sharia Insurance Companies within a maximum of 1 (one) working day since all supporting documents were received.
(2) In order to assist Ceding Companies as referred to in Article 9 paragraph (2), Reinsurance Brokerage Companies are obligated to take at least the following steps:
a. provide initial notification to Reinsurers regarding claim or benefit submission information from Ceding Companies within a maximum of 1 (one) working day after receiving claim submission information from Ceding Companies; b. provide a response to claim notifications from Ceding Companies by informing supporting documents needed by Ceding Companies in the claim or benefit submission process within a maximum of 3 (three) working days since the claim or benefit notification was received; and
c. submit supporting documents as referred to in letter b to Reinsurers within a maximum of 1 (one) working day since all supporting documents were received.

Article 11
(1) Insurance Brokerage Companies must assist policyholders, insured, or participants in obtaining information regarding the status development of claims or benefits from Insurance Companies or Sharia Insurance Companies. (2) Reinsurance Brokerage Companies must assist Ceding Companies in obtaining information regarding the status development of claims or benefits from Reinsurers.

Article 12
(1) Insurance Brokerage Companies are obligated to inform the value of claims or benefits approved by Insurance Companies or Sharia Insurance Companies to policyholders, insured, or participants. (2) Reinsurance Brokerage Companies are obligated to inform the value of claims or benefits approved by Reinsurers to Ceding Companies.

Article 13
(1) Insurance Brokerage Companies are prohibited from making promises or statements stating that claims or benefits will be paid by Insurance Companies or Sharia Insurance Companies. (2) Reinsurance Brokerage Companies are prohibited from making promises or statements stating that claims or benefits will be paid by Reinsurers.

Part Three
Expertise in the Insurance Field
Article 14
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessor Companies, in carrying out their business activities, are obligated to have Expert Personnel that match their business field and competence. (2) Regulations regarding Expert Personnel are regulated in OJK regulations concerning business licensing and institutionalization of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessor Companies.

Article 15
(1) Expert Personnel at Insurance Brokerage Companies as referred to in Article 14 paragraph (1) are obligated to fulfill at least the following duties:
a. create and apply good Insurance Brokerage work processes, including claim settlement processes; b. analyze and improve Insurance Brokerage work processes to remain in line with insurance industry developments;
c. provide current information regarding insurance industry developments and regulations in the insurance field to Insurance Brokers;
d. provide guidance to Insurance Brokers in providing input or advice regarding insurance needs for prospective policyholders, insured, or participants; e. pay attention to and provide guidance for Insurance Brokers in negotiating or formulating insurance programs; f. review the credibility of Insurance Companies or Sharia Insurance Companies from various aspects including financial aspects and ability/capacity to accept certain risks; and g. provide guidance to Insurance Brokers in claim negotiation processes. (2) In carrying out duties as referred to in paragraph (1), Expert Personnel at Insurance Brokerage Companies are obligated to refer to codes of ethics and conduct standards prepared by professional associations in Indonesia.

Article 16
Expert Personnel at Insurance Brokerage Companies as referred to in Article 14 paragraph (1) are obligated to be responsible for:
a. mentoring Insurance Brokers to act in accordance with applicable regulations; b. ensuring the truthfulness and sufficiency of data to formulate the risk profile of insured or participants;
c. maintaining the confidentiality of prospective policyholder, insured, or participant data in accordance with applicable laws and regulations;
d. submitting accurate data and information to Insurance Companies or Sharia Insurance Companies to conduct risk selection; and e. knowing more information regarding Insurance Companies or Sharia Insurance Companies and their credibility in accordance with applicable rules.

Article 17
Expert Personnel at Insurance Brokerage Companies as referred to in Article 14 paragraph (1) have the authority to:
a. sign approval documents for insurance or sharia insurance offers (quotation slip/proposal slip) addressed to prospective insured or participants; b. sign approval documents for insurance or sharia insurance placements (placing slip/closing slip) addressed to insurers;
c. remind Insurance Brokers to:

1. collect premiums or contributions from insured or participants; or
2. conduct payment processes to Insurance Companies or Sharia Insurance Companies; and
   d. provide guidance to Insurance Brokers in providing input or advice regarding the needs of other parties such as lawyers and/or forensic experts to policyholders, insured, participants, Insurance Companies, or Sharia Insurance Companies.

Article 18
(1) Expert Personnel at Reinsurance Brokerage Companies as referred to in Article 14 paragraph (1) are obligated to fulfill at least the following duties:
a. create and apply good Reinsurance Brokerage work processes, including claim settlement processes; b. analyze and improve Reinsurance Brokerage work processes to remain in line with insurance industry developments;
c. provide current information regarding insurance industry developments and regulations in the insurance field to Reinsurance Brokers;
d. provide guidance to Reinsurance Brokers in providing input or advice regarding reinsurance needs for prospective Ceding Companies; e. pay attention to and provide guidance for Reinsurance Brokers in negotiating or formulating reinsurance programs; f. review the credibility of Reinsurers from various aspects including financial aspects and ability/capacity to accept certain risks; and g. provide guidance to Reinsurance Brokers in claim negotiation processes. (2) In carrying out duties as referred to in paragraph (1), Expert Personnel at Reinsurance Brokerage Companies are obligated to refer to codes of ethics and conduct standards prepared by professional associations in Indonesia.

Article 19
Expert Personnel at Reinsurance Brokerage Companies as referred to in Article 14 paragraph (1) are obligated to be responsible for:
a. mentoring Reinsurance Brokers to act in accordance with applicable regulations; b. ensuring the truthfulness and sufficiency of data to formulate the risk profile of Ceding Companies;
c. maintaining the confidentiality of prospective Ceding Company data in accordance with applicable laws and regulations;
d. submitting accurate data and information to Reinsurers to conduct risk selection; and e. knowing more information regarding Reinsurers and their credibility in accordance with applicable rules.

Article 20
Expert Personnel at Reinsurance Brokerage Companies as referred to in Article 14 paragraph (1) have the authority to:
a. sign approval documents for reinsurance or sharia reinsurance offers (quotation slip/proposal slip) addressed to prospective Ceding Companies; b. sign approval documents for reinsurance or sharia reinsurance placements (placing slip/closing slip) addressed to Reinsurers;
c. remind Reinsurance Brokers regarding the collection of premiums or contributions from Ceding Companies and conducting payment processes to Reinsurers; and
d. provide guidance to Reinsurance Brokers in providing input or advice regarding the needs of other parties such as lawyers and/or forensic experts to Ceding Companies or Reinsurers.

Article 21
(1) Expert Personnel at Insurance Loss Assessor Companies as referred to in Article 14 paragraph (1) are obligated to fulfill at least the following duties:
a. coordinate the collection of data and information to assess insurance compensation; b. evaluate the draft report on insurance compensation assessment; and
c. verify the insurance compensation assessment report.

(2) In carrying out the duties referred to in paragraph (1), Experts in Insurance Loss Assessment Companies must adhere to the code of ethics and code of conduct developed by professional associations in Indonesia.

Article 22
Experts in Insurance Loss Assessment Companies as referred to in Article 14 paragraph (1) are responsible for:
a. ensuring the clarity, completeness, and accuracy of insurance loss assessment reports based on obtained data and information; and b. ensuring that insurance loss assessment reports are prepared in accordance with applicable professional guidelines.

Article 23
Experts in Insurance Loss Assessment Companies as referred to in Article 14 paragraph (1) have the authority to:
a. conclude the liability of the Insurance Policy for insurance losses; b. conclude the insurance loss value;
c. sign the insurance loss assessment report;
d. provide suggestions in managing risks related to the insured object; and e. provide suggestions to policyholders, insured parties, or participants regarding steps that can be taken to minimize losses.

Article 24
(1) Insurance Brokerage Companies, in carrying out their business activities, must have Insurance Brokers who possess sufficient knowledge and capability and have a good reputation.

(2) Reinsurance Brokerage Companies, in carrying out their business activities, must have Reinsurance Brokers who possess sufficient knowledge and capability and have a good reputation.

(3) Insurance Brokers and Reinsurance Brokers as referred to in paragraph (1) and paragraph (2) are Insurance Brokers and Reinsurance Brokers registered with OJK.

(4) Insurance Brokers as referred to in paragraph (1) must fulfill at least the following duties:
a. explaining to prospective policyholders, insured parties, or participants regarding:

1. insurance or sharia insurance needs;
2. terms and conditions of insurance or sharia insurance coverage; and
3. Insurance Companies or Sharia Insurance Companies that can provide the required insurance or sharia insurance coverage;
   b. assisting prospective policyholders, insured parties, or participants in the claims handling process.

(5) Reinsurance Brokers as referred to in paragraph (2) must fulfill at least the following duties:
a. explaining to Ceding Companies regarding:

1. reinsurance or sharia reinsurance needs;
2. terms and conditions of reinsurance or sharia reinsurance coverage; and
3. Reinsurers that can provide the required reinsurance or sharia reinsurance coverage;
   b. assisting Ceding Companies in the claims handling process.

Fourth Section
Complaint or Grievance Handling

Article 25
(1) Insurance Brokerage Companies and Reinsurance Brokerage Companies must handle every complaint or grievance submitted by policyholders, insured parties, participants, or Ceding Companies within a maximum period of 20 (twenty) working days after the date of receipt of the complaint or grievance.

(2) In certain conditions, Insurance Brokerage Companies and Reinsurance Brokerage Companies may extend the period as referred to in paragraph (1) by a maximum of 20 (twenty) additional working days.

(3) Certain conditions as referred to in paragraph (2) are:
a. the office of the Insurance Brokerage Company or Reinsurance Brokerage Company receiving the complaint or grievance is not the same as the office of the Insurance Brokerage Company or Reinsurance Brokerage Company where the complained or reported issue occurred, and there are communication constraints between the two offices; b. complaints or grievances from policyholders, insured parties, participants, or Ceding Companies that require special research into the documents of the Insurance Brokerage Company or Reinsurance Brokerage Company; and/or
c. other matters beyond the control of the Insurance Brokerage Company or Reinsurance Brokerage Company, such as the involvement of third parties outside the Insurance Brokerage Company or Reinsurance Brokerage Company in financial transactions conducted by policyholders, insured parties, participants, or Ceding Companies.

(4) The extension of the complaint or grievance handling period as referred to in paragraph (2) must be notified in writing to the policyholders, insured parties, participants, or Ceding Companies submitting the complaint or grievance before the period as referred to in paragraph (1) expires.

Article 26
(1) Insurance Brokerage Companies and Reinsurance Brokerage Companies must have and implement a complaint or grievance handling mechanism for policyholders, insured parties, participants, or Ceding Companies.

(2) Insurance Brokerage Companies and Reinsurance Brokerage Companies must inform the complaint or grievance handling mechanism as referred to in paragraph (1) to policyholders, insured parties, participants, or Ceding Companies.

(3) Insurance Brokerage Companies and Reinsurance Brokerage Companies must administrate and electronically document the handling of complaints or grievances as referred to in paragraph (1).

Fifth Section
Service Fees

Article 27
(1) Insurance Brokerage Companies are entitled to receive brokerage service fees from policyholders, insured parties, or participants for their brokerage services.

(2) Reinsurance Brokerage Companies are entitled to receive brokerage service fees from Ceding Companies for their brokerage services.

(3) In addition to receiving brokerage service fees as referred to in paragraph (1) and paragraph (2), Insurance Brokerage Companies and Reinsurance Brokerage Companies may also obtain consultation service fees and claims settlement handling service fees.

(4) Claims settlement handling service fees as referred to in paragraph (3) are charged to policyholders, insured parties, participants, or Ceding Companies fairly.

(5) Brokerage service fees as referred to in paragraph (1) and paragraph (2) may be paid directly by policyholders, insured parties, participants, or Ceding Companies, or become part of the premium or contribution.

(6) In the event that brokerage service fees as referred to in paragraph (1) and paragraph (2) are part of the premium or contribution, Insurance Brokerage Companies or Reinsurance Brokerage Companies may explain the brokerage service fees they receive to policyholders, insured parties, participants, or Ceding Companies regarding such brokerage service fees.

Article 28
(1) Insurance Loss Assessment Companies are entitled to receive claim assessment service fees for Insured Objects from the Engaging Party.

(2) In addition to receiving claim assessment service fees for Insured Objects as referred to in paragraph (1), Insurance Loss Assessment Companies may also obtain consultation service fees for Insured Objects to be covered by insurance.

(3) Insurance Loss Assessment Companies must include claim assessment service fees for Insured Objects as referred to in paragraph (1) in a written cooperation agreement.

(4) The written cooperation agreement as referred to in paragraph (3) must contain at least:
a. the rights and obligations of the Insurance Loss Assessment Company and the Engaging Party; and b. the payment period for claim assessment service fees and/or consultation service fees related to losses occurring on the Insured Object.

(5) Every implementation of claim assessment services for Insured Objects by Insurance Loss Assessment Companies must be based on a written assignment from the Engaging Party.

Sixth Section
Premium Accounts and Operational Accounts

Article 29
In the event that Insurance Brokerage Companies and Reinsurance Brokerage Companies receive premiums or contributions from policyholders, insured parties, participants, or Ceding Companies, Insurance Brokerage Companies and Reinsurance Brokerage Companies must separate Premium Accounts from Operational Accounts.

Article 30
(1) Premiums or contributions received by Insurance Brokerage Companies and Reinsurance Brokerage Companies from policyholders, insured parties, participants, or Ceding Companies must be deposited into Premium Accounts.

(2) Premium Accounts as referred to in paragraph (1) may only be used for:
a. transfers for payment of premiums or contributions that are the rights of Insurance Companies, Sharia Insurance Companies, or Reinsurers; b. transfers of service fees that are the rights of Insurance Brokerage Companies and Reinsurance Brokerage Companies to Operational Accounts;
c. transfers for payments of refunds for premiums or contributions to policyholders, insured parties, participants, or Ceding Companies caused by payment adjustments;
d. transfers of account interest; e. transfers for the receipt of claims or benefits from Insurance Companies, Sharia Insurance Companies, or Reinsurers; and/or f. transfers for the payment of claims or benefits to policyholders, insured parties, participants, or Ceding Companies.

(3) Insurance Brokerage Companies and Reinsurance Brokerage Companies are prohibited from using funds in Premium Accounts as referred to in paragraph (1) for:
a. providing advances in the form of premium or contribution payments to Insurance Companies, Sharia Insurance Companies, or Reinsurers for premiums or contributions not yet paid by policyholders or prospective policyholders, insured parties or prospective insured parties, participants or prospective participants, or Ceding Companies or prospective Ceding Companies; b. providing advances in the form of claim or benefit payments to policyholders, insured parties, participants, or Ceding Companies; and/or
c. operational activities of Insurance Brokerage Companies and Reinsurance Brokerage Companies, including costs to obtain business.

Article 31
Operational Accounts as referred to in Article 29 are used to receive transfers of service fees that are the rights of Insurance Brokerage Companies and Reinsurance Brokerage Companies, as well as for the operational activities of Insurance Brokerage Companies and Reinsurance Brokerage Companies.

Seventh Section
Insured Objects

Article 32
(1) Insurance Brokerage Companies must provide clear information about the Insured Objects being covered to Insurance Companies or Sharia Insurance Companies.

(2) Reinsurance Brokerage Companies must provide clear information about the Insured Objects being covered to Reinsurers.

Article 33
(1) Insurance Brokerage Companies must accurately explain the contents of Insurance Policies, including rights and obligations, to:
a. policyholders or prospective policyholders; b. insured parties or prospective insured parties; or
c. participants or prospective participants.

(2) Reinsurance Brokerage Companies must accurately explain the contents of reinsurance agreements, including rights and obligations, to Ceding Companies or prospective Ceding Companies.

Article 34
Reinsurance Brokerage Companies must submit documents evidencing reinsurance or sharia reinsurance placements to Ceding Companies.

Article 35
(1) In order to provide freedom to prospective policyholders, insured parties, or participants to choose Insurance Companies or Sharia Insurance Companies, Insurance Brokerage Companies must strive to provide more than 1 (one) choice of Insurance Companies or Sharia Insurance Companies that can cover the Insured Objects, except when only 1 (one) Insurance Company or Sharia Insurance Company is willing or capable of managing risks related to the Insured Objects.

(2) In order to provide freedom to Ceding Companies to choose Reinsurers, Reinsurance Brokerage Companies must strive to provide more than 1 (one) choice of Reinsurers that can cover the Insured Objects, except when only 1 (one) Reinsurer is willing or capable of managing risks related to the Insured Objects.

(3) Insurance Brokerage Companies and Reinsurance Brokerage Companies act independently in recommending Insurance Companies, Sharia Insurance Companies, or Reinsurers as referred to in paragraph (1) and paragraph (2).

Eighth Section
Business Activities

Article 36
(1) Insurance Brokerage Companies may only place insurance or sharia insurance coverage with Insurance Companies or Sharia Insurance Companies that:
a. have business licenses from OJK; and b. meet the applicable financial health standards.

(2) In the event that Insurance Companies and Sharia Insurance Companies in Indonesia with business licenses from OJK as referred to in paragraph (1) letter a, either individually or collectively, are not willing or capable of retaining or managing insurance or sharia insurance risks from the relevant Insured Objects, Insurance Brokerage Companies may only place insurance or sharia insurance coverage with Insurance Companies or Sharia Insurance Companies outside Indonesia that:
a. have business licenses from foreign insurance authorities; and b. have a rating of at least BBB or equivalent from internationally recognized rating agencies.

(3) In the event that the ratings of foreign Insurance Companies or Sharia Insurance Companies as referred to in paragraph (2) letter b are issued by more than one rating agency, the rating used is the lowest rating.

(4) Regulations regarding the financial health of Insurance Companies or Sharia Insurance Companies as referred to in paragraph (1) letter b follow regulations issued by OJK regarding the financial health of insurance companies, sharia insurance companies, reinsurance companies, or sharia reinsurance companies.

Article 37
(1) Reinsurance Brokerage Companies may only place reinsurance or sharia reinsurance coverage with Reinsurers that:
a. have business licenses from OJK; and b. meet the applicable financial health standards.

(2) In the event that Reinsurers with business licenses from OJK as referred to in paragraph (1) letter a are unable or unwilling to provide reinsurance or sharia reinsurance support, Reinsurance Brokerage Companies, upon request from Ceding Companies, may only place reinsurance or sharia reinsurance coverage with foreign Reinsurers that:
a. have business licenses from foreign insurance authorities; and b. have a rating of at least BBB or equivalent from internationally recognized rating agencies.

(3) In the event that the ratings of foreign Reinsurers as referred to in paragraph (2) letter b are issued by more than one rating agency, the rating used is the lowest rating.

(4) Regulations regarding the financial health of Reinsurers as referred to in paragraph (1) letter b follow regulations issued by OJK regarding the financial health of insurance companies, sharia insurance companies, reinsurance companies, or sharia reinsurance companies.

(5) Regulations regarding reinsurance or sharia reinsurance placements follow regulations issued by OJK regarding own retention and domestic reinsurance support.

Article 38
(1) Insurance Brokerage Companies are prohibited from placing insurance or sharia insurance coverage with Insurance Companies or Sharia Insurance Companies that are affiliates of the respective Insurance Brokers or Insurance Brokerage Companies.

(2) Insurance Brokerage Companies are affiliates with Insurance Companies or Sharia Insurance Companies if the Insurance Brokerage Companies have such relationships that can influence the management or policies of the Insurance Companies or Sharia Insurance Companies, or vice versa.

(3) Influence as referred to in paragraph (2) exists in cases of control by Insurance Companies, Sharia Insurance Companies, or Insurance Brokerage Companies, in cases where:
a. one party has one or more directors or officials at a level below directors or commissioners, who also serve as directors, officials at a level below directors, or commissioners on the other party; b. one party has one or more directors, commissioners, or controlling shareholders, who have family relationships due to marriage or descent up to the second degree, either horizontally or vertically, who serve as directors, commissioners, or controlling shareholders on the other party;
c. one party holds 25% (twenty-five percent) or more of the shares of the other party;
d. one party is the largest shareholder of the other party; e. the parties are controlled by the same controllers; and/or f. one party has voting rights on the other party exceeding 50% (fifty percent) based on an agreement.

(4) Regulations as referred to in paragraph (3) letters a through f do not apply in cases where control is exercised by the Government of the Republic of Indonesia.

(5) Regulations regarding affiliates for Insurance Brokerage Companies as referred to in paragraph (1) through paragraph (4) apply mutatis mutandis to Reinsurance Brokerage Companies.

Article 39
Insurance Brokerage Companies are prohibited from arranging reinsurance or sharia reinsurance placements by requiring Insurance Companies or Sharia Insurance Companies to place reinsurance or sharia reinsurance through Reinsurance Brokerage Companies or directly to specific Reinsurers.

Article 40
(1) Insurance Brokerage Companies may offer consultation and/or brokerage services in insurance or sharia insurance coverage and/or claims settlement handling digitally or electronically.

(2) Reinsurance Brokerage Companies may offer consultation and/or brokerage services in reinsurance or sharia reinsurance placements and/or claims settlement handling digitally or electronically.

Article 41
Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessment Companies are prohibited from providing loans or placing assets, directly or indirectly, to shareholders and their affiliates.

Article 42
Insurance Brokerage Companies and Reinsurance Brokerage Companies are prohibited from issuing temporary coverage documents, Insurance Policies or reinsurance agreements, and/or temporary reinsurance coverage documents.

Article 43
Insurance Loss Assessment Companies must submit final insurance loss assessment reports to policyholders, insured parties, or participants if requested by policyholders, insured parties, or participants in cases where:
a. claims or benefits are rejected by Insurance Companies or Sharia Insurance Companies; or b. there is no agreement regarding the loss amount.

Article 44
Contracts for the appointment of insurance loss assessments between Insurance Loss Assessment Companies and Insurance Companies or Sharia Insurance Companies are prohibited from containing clauses that restrict Insurance Loss Assessment Companies from providing final insurance loss assessment reports to policyholders, insured parties, or participants.

Article 45
(1) Insurance Brokerage Companies must assist policyholders, insured parties, or participants in the process of resolving insurance or sharia insurance disputes through courts or out of court.

(2) Reinsurance Brokerage Companies must assist Ceding Companies in the process of resolving reinsurance or sharia reinsurance disputes through courts or out of court.

Article 46
(1) Insurance Brokerage Companies and Reinsurance Brokerage Companies must continuously conduct Insurance Brokerage or Reinsurance Brokerage business activities since obtaining business licenses.

(2) Insurance Brokerage Companies and Reinsurance Brokerage Companies are deemed not to be conducting Insurance Brokerage or Reinsurance Brokerage business activities continuously as referred to in paragraph (1) if, within a period of 6 (six) months, they meet the criteria:
a. not conducting Insurance Brokerage or Reinsurance Brokerage business activities; and/or b. not conducting business transactions.

Article 47
(1) Insurance Loss Assessment Companies must continuously conduct Insurance Loss Assessment business activities since obtaining business licenses.

(2) Insurance Loss Assessment Companies are deemed not to be conducting Insurance Loss Assessment business activities continuously as referred to in paragraph (1) if, within a period of 6 (six) months, they meet the criteria:
a. not conducting Insurance Loss Assessment business activities; and/or b. not conducting business transactions.

Article 48
Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessment Companies must include business license numbers on official company letters and/or documents.

Ninth Section
Data Confidentiality

Article 49
(1) Insurance Brokerage Companies and Reinsurance Brokerage Companies are prohibited from providing data and/or information regarding policyholders, insured parties, participants, or Ceding Companies to third parties in any manner.

(2) The prohibition as referred to in paragraph (1) is excepted in cases where:
a. policyholders, insured parties, participants, or Ceding Companies provide written consent; and/or b. required by legislation.

Article 50
In the event that Insurance Brokerage Companies and Reinsurance Brokerage Companies obtain personal data and/or information of individuals and/or corporations from other parties, and Insurance Brokerage Companies and Reinsurance Brokerage Companies will use such data and/or information to carry out their activities, Insurance Brokerage Companies and Reinsurance Brokerage Companies must have written statements that the other parties concerned have obtained written consent from such individuals and/or corporations to provide such personal data and/or information to any party, including Insurance Brokerage Companies and Reinsurance Brokerage Companies.

Article 51
The cancellation or partial change of consent regarding the disclosure of data and/or information as referred to in Article 49 paragraph (2) letter a is done in writing by policyholders, insured parties, participants, or Ceding Companies.

CHAPTER IV
COOPERATION WITH OTHER PARTIES

Article 52
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Assessment Companies

Asuransi can cooperate with other parties in order to obtain business or to carry out part of the functions in the conduct of its business.

(2) Cooperation as referred to in paragraph (1) must meet the following provisions:
a. not hinder the operational and non-operational activities of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies; and b. be stipulated in a written agreement.

(3) The written agreement as referred to in paragraph (2) letter b must contain at least:
a. the term of the agreement; b. the duties and responsibilities of each party in the implementation of tasks; and
c. the obligation of technology and knowledge transfer in the event that the cooperation agreement is made with foreign parties.

(4) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies that conduct cooperation as referred to in paragraph (1) must ensure that the other party meets the following provisions:
a. having a business license from the competent authority; b. not having a conflict of interest with policyholders, insured parties, participants, Ceding Companies, and/or insurers; and
c. having the capability and experience to support the implementation of tasks.

Article 53
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies must ensure that cooperation as referred to in Article 52 paragraph (1) has complied with the agreements made and applicable laws and regulations.

(2) In the implementation of cooperation as referred to in Article 52 paragraph (1), Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies must have and apply selection standards and accountability.

Article 54
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies that conduct cooperation with other parties in order to carry out part of the functions in the conduct of its business as referred to in Article 52 paragraph (1) are conducted with service providers through outsourcing agreements.

(2) The outsourcing agreement as referred to in paragraph (1) is conducted through:
a. work contracting; and/or b. provision of labor services.

(3) The outsourcing agreement as referred to in paragraph (2) must contain provisions regulating at least the type, value, and term of the transfer of business operation functions.

Article 55
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies are prohibited from conducting outsourcing in the context of the main activities of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies.

(2) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies must exercise control over part of the business operation functions outsourced to other parties at a level equivalent to the control exercised internally within Insurance Brokerage Companies and Reinsurance Brokerage Companies.

(3) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies remain responsible for the functions outsourced to service provider companies.

CHAPTER V
MINIMUM EQUITY

Article 56
(1) Insurance Brokerage Companies must at all times have equity of at least IDR 2,000,000,000.00 (two billion rupiah).

(2) Insurance Brokerage Companies that have obtained business licenses before this OJK Regulation was enacted and have equity below the provisions as referred to in paragraph (1), must have equity with the following stages:
a. at least IDR 1,300,000,000.00 (one billion three hundred million rupiah) no later than June 30, 2017; b. at least IDR 1,600,000,000.00 (one billion six hundred million rupiah) no later than June 30, 2018; and
c. at least IDR 2,000,000,000.00 (two billion rupiah) no later than June 30, 2019.

Article 57
(1) Reinsurance Brokerage Companies must at all times have equity of at least IDR 3,000,000,000.00 (three billion rupiah).

(2) Reinsurance Brokerage Companies that have obtained business licenses before this OJK Regulation was enacted and have equity below the provisions as referred to in paragraph (1), must have equity with the following stages:
a. at least IDR 1,500,000,000.00 (one billion five hundred million rupiah) no later than June 30, 2017; b. at least IDR 2,200,000,000.00 (two billion two hundred million rupiah) no later than June 30, 2018; and
c. at least IDR 3,000,000,000.00 (three billion rupiah) no later than June 30, 2019.

Article 58
(1) Insurance Loss Appraisal Companies must at all times have equity of at least IDR 500,000,000.00 (five hundred million rupiah).

(2) Insurance Loss Appraisal Companies that have obtained business licenses before this OJK Regulation was enacted and have equity below the provisions as referred to in paragraph (1), must have equity with the following stages:
a. at least IDR 100,000,000.00 (one hundred million rupiah) no later than June 30, 2017; b. at least IDR 300,000,000.00 (three hundred million rupiah) no later than June 30, 2018; and
c. at least IDR 500,000,000.00 (five hundred million rupiah) no later than June 30, 2019.

CHAPTER VI
REPORTING
First Section
Reports of Insurance Brokerage Companies and Reinsurance Brokerage Companies

Article 59
(1) Insurance Brokerage Companies and Reinsurance Brokerage Companies must submit to OJK:
a. semi-annual reports; b. annual reports; and
c. financial reports audited by public accountants.

(2) Insurance Loss Appraisal Companies must submit to OJK:
a. annual reports; and b. financial reports audited by public accountants.

(3) Semi-annual reports as referred to in paragraph (1) letter a, which are reports ending on June 30 and December 31, must be submitted no later than 1 (one) month after the end of the respective semester.

(4) Annual reports as referred to in paragraph (1) letter b and paragraph (2) letter a, and financial reports audited by public accountants as referred to in paragraph (1) letter c and paragraph (2) letter b, which are reports ending on December 31, must be submitted no later than April 30 of the following year.

Second Section
Reporting Standardization

Article 60
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies must submit reports as referred to in Article 59 paragraph (1) letter c and paragraph (2) letter b in hard copy.

(2) Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies must submit reports as referred to in Article 59 paragraph (1) letter a, letter b, and paragraph (2) letter a in soft copy.

(3) If the deadline for submitting reports as referred to in Article 59 paragraph (3) and paragraph (4) falls on a holiday, the submission deadline is the next working day.

(4) In the event that Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies obtain business licenses less than 6 (six) months before the end of the calendar year, the obligation to submit reports as referred to in paragraph (1) and paragraph (2) shall apply starting from the following calendar year.

(5) OJK may at any time request reports or information other than reports as referred to in paragraph (1) and paragraph (2).

(6) Provisions regarding the form, structure, and procedures for submitting reports as referred to in paragraph (1) and paragraph (2) are regulated in an OJK Circular Letter.

Article 61
(1) Financial reports audited by public accountants as referred to in Article 59 paragraph (1) letter c and paragraph (2) letter b must be prepared based on applicable financial accounting standards in Indonesia.

(2) Public accountants as referred to in paragraph (1) must be public accountants registered with OJK.

Article 62
Financial reports audited by public accountants as referred to in Article 59 paragraph (1) letter c and paragraph (2) letter b must be prepared in Indonesian Rupiah.

CHAPTER VII
SANCTIONS

Article 63
(1) Violations of the provisions in Article 2, Article 5 paragraph (1), paragraph (2), Article 6 paragraph (1), paragraph (2), Article 7 paragraph (1), Article 8, Article 9, Article 10 paragraph (1), paragraph (2), Article 12, Article 13, Article 14 paragraph (1), Article 24 paragraph (1), paragraph (2), Article 25 paragraph (1) and paragraph (4), Article 26, Article 28 paragraph (3) and paragraph (4), Article 29, Article 30, Article 32, Article 33, Article 34, Article 35 paragraph (1) and paragraph (2), Article 36 paragraph (1) and paragraph (2), Article 37 paragraph (1) and paragraph (2), Article 38 paragraph (1) and paragraph (5), Article 39, Article 41, Article 42, Article 43, Article 44, Article 45, Article 46 paragraph (1), Article 47 paragraph (1), Article 48, Article 49 paragraph (1), Article 50, Article 52 paragraph (2) and paragraph (4), Article 53 paragraph (1) and paragraph (2), Article 54 paragraph (3), Article 55 paragraph (1) and paragraph (2), Article 56, Article 57, Article 58, Article 59, Article 60 paragraph (1) and paragraph (2), Article 61 paragraph (1), and Article 62 of this OJK Regulation are subject to administrative sanctions consisting of:
a. written warnings; b. restrictions on business activities, for part or all of the business activities; and
c. revocation of business licenses.

(2) Administrative sanctions as referred to in paragraph (1) are imposed progressively.

(3) In addition to the administrative sanctions as referred to in paragraph (1), OJK may impose additional sanctions consisting of prohibitions on becoming shareholders, controllers, directors, commissioners, or equivalents of shareholders, controllers, directors, and commissioners, or holding executive positions below the board of directors, or equivalents of executive positions below the board of directors, in Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, Sharia Reinsurance Companies, Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies.

Article 64
(1) OJK may impose license revocation sanctions without prior imposition of other administrative sanctions for violations of the provisions in Article 7 paragraph (1), Article 42, Article 46 paragraph (1), and Article 47 paragraph (1) of this OJK Regulation.

(2) For Insurance Brokerage Companies and Reinsurance Brokerage Companies that have violated the provisions in Article 7 paragraph (1) and had their business licenses revoked as referred to in paragraph (1), they remain responsible for fulfilling obligations regarding the payment of claims or benefits arising from losses as referred to in Article 7 paragraph (1).

Article 65
In the event that Insurance Brokerage Companies and Reinsurance Brokerage Companies violate the provisions in Article 42 of this OJK Regulation 3 (three) times, OJK imposes administrative sanctions consisting of license revocation.

Article 66
Violations of the provisions in Article 15, Article 16, Article 18, Article 19, Article 21, Article 22, and Article 24 paragraph (4) and paragraph (5) of this OJK Regulation may be subject to administrative sanctions consisting of:
a. written warnings; and b. cancellation of registration statements for Insurance Brokers and Reinsurance Brokers.

Article 67
(1) Insurance Brokerage Companies, Reinsurance Brokerage Companies, or Insurance Loss Appraisal Companies that violate the provisions of Article 38 paragraph (1) and paragraph (5) and Article 59 paragraph (3) and paragraph (4) of this OJK Regulation are subject to additional administrative sanctions consisting of administrative fines.

(2) The amount of administrative fines for violations of the provisions in Article 38 paragraph (1) and paragraph (5) is as follows:
a. IDR 1,000,000.00 (one million rupiah) for each insurance or Sharia insurance closure. b. IDR 1,000,000.00 (one million rupiah) for each reinsurance or Sharia reinsurance closure.

(3) The amount of administrative fines for violations of the provisions in Article 59 paragraph (3) and paragraph (4) is as follows:
a. IDR 500,000.00 (five hundred thousand rupiah) for each type of report and for each day of delay. b. at most IDR 180,000,000.00 (one hundred eighty million rupiah) for each report submitted late.

Article 68
Procedures and methods for imposing sanctions are regulated in OJK regulations regarding procedures and methods for imposing administrative sanctions.

CHAPTER VIII
TRANSITIONAL PROVISIONS

Article 69
For Insurance Brokerage Companies and Reinsurance Brokerage Companies that have obtained business licenses before this OJK Regulation was enacted, provisions regarding the separation of Premium Accounts and Operational Accounts as referred to in Article 29 must be fulfilled no later than 30 (thirty) working days from the enactment of this OJK Regulation.

Article 70
Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies that have conducted cooperation with other parties in order to obtain business or to carry out part of the functions in the conduct of its business as referred to in Article 52 paragraph (1) before this OJK Regulation was enacted are declared to remain valid until the end of the agreement.

Article 71
In the event that OJK regulations regarding procedures and methods for imposing administrative sanctions have not been enacted, provisions regarding procedures and methods for imposing administrative sanctions are subject to Government Regulation Number 73 of 1992 concerning the Conduct of Insurance Business as last amended by Government Regulation Number 81 of 2008 concerning the Third Amendment to Government Regulation Number 73 of 1992 concerning the Conduct of Insurance Business.

CHAPTER IX
CLOSING PROVISIONS

Article 72
At the time this OJK Regulation is enacted, provisions concerning the conduct of business of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies are subject to this OJK Regulation.

Article 73
This OJK Regulation takes effect on the date of enactment.

In order that everyone may know it, it is ordered to enact 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 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 303 A copy in accordance with the original Legal Director 1 Legal Department signed Yuliana

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 70 /POJK.05/2016
CONCERNING
THE CONDUCT OF BUSINESS OF INSURANCE BROKERAGE COMPANIES, REINSURANCE BROKERAGE COMPANIES, AND INSURANCE LOSS APPRAISAL 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 within the Law there are new matters related to the supervision and development of the insurance industry. Law Number 40 of 2014 concerning Insurance mandates the improvement of regulations and supervision of all activities of the insurance industry, which has developed rapidly, marked by increasing business volume, increasing use of insurance services by the public, and increasingly varied insurance services in line with public needs. The increased role of the insurance industry in driving national development occurs if the insurance industry can better meet public needs in facing risks and in conducting its business. In addition, efforts to create a healthier, reliable, trustworthy, and competitive insurance industry in general can be done by establishing new regulations or improving existing regulations.

• 2 - -
  In order to optimize the role of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies, which are part of the insurance industry, to support the increase in national economic growth, maintain financial system stability as a foundation for sustainable development, and realize public financial independence and support efforts to increase equity in development, one of the strategies developed by OJK is the strengthening of regulatory and supervisory aspects comprehensively with an emphasis on industry competitiveness to support financial system stability. Regulations concerning the conduct of business of Insurance Brokerage Companies, Reinsurance Brokerage Companies, and Insurance Loss Appraisal Companies are one of the regulations that fulfill 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
Clear enough.

Article 5
Clear enough.

Article 6
Clear enough.

• 3 - -
  Article 12
  Article 7
  Clear enough.

Article 8
Clear enough.

Article 9
Paragraph (1)
What is meant by "helping" is conducting an examination of the completeness of claim submission documents and submitting them to Insurance Companies or Sharia Insurance Companies.

Paragraph (2)
What is meant by "helping" is conducting an examination of the completeness of claim submission documents and submitting them to Reinsurers.

Article 10
Paragraph (1)
Letter a
Initial notification regarding claim submission information can be conducted through telecommunications facilities such as telephone, facsimile, e-mail, and/or other telecommunications facilities without documents being completed first.

Letter b
Clear enough.

Letter c
Clear enough.

Paragraph (2)
Letter a
Initial notification regarding claim submission information can be conducted through telecommunications facilities such as telephone, facsimile, email, and/or other telecommunications facilities without documents being completed first.

Letter b
Clear enough.

• 4 - -
  Paragraph (4) ...
  Letter c
  Clear enough.

Article 11
Clear enough.

Article 12
Clear enough.

Article 13
Clear enough.

Article 14
Clear enough.

Article 15
Clear enough.

Article 16
Clear enough.

Article 17
Clear enough.

Article 18
Clear enough.

Article 19
Clear enough.

Article 20
Clear enough.

Article 21
Clear enough.

• 5 - -
  Article 22
  Clear enough.

Article 23
Clear enough.

Article 24
Clear enough.

Article 25
Paragraph (1)
What is meant by "handling" is the follow-up actions taken by Insurance Brokerage Companies and Reinsurance Brokerage Companies to resolve complaints or complaints, such as:
a. for Insurance Brokerage Companies, facilitating meetings between policyholders, insured parties, and participants, with Insurance Companies or Sharia Insurance Companies; or b. for Reinsurance Brokerage Companies, facilitating meetings between Ceding Companies and Reinsurers.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Article 26
Paragraph (1)
Clear enough.

Paragraph (2)
What is meant by notification of complaint handling mechanisms contains at least information about service locations, service working hours, service telephone numbers, and service email addresses for complaints.

Paragraph (3)
Clear enough.

Article 27
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
What is meant by "fairly" is that the service fees charged have been in accordance with the value of coverage and have been in accordance with agreements between policyholders, insured parties, participants, or Ceding Companies with Insurance Brokerage Companies and Reinsurance Brokerage Companies.

Paragraph (5)
Clear enough.

Paragraph (6)
Clear enough.

Article 28
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
What is meant by "written assignment" can include work order letters, duty letters, and others.

Article 29
Clear enough.

• 7 - -
  Article 38 ...

Article 30
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Letter d
What is meant by "account interest" is premium or contribution account interest which subsequently becomes the right of Insurance Brokerage Companies and Reinsurance Brokerage Companies.

Letter e
Clear enough.

Letter f
Clear enough,

Paragraph (3)
Clear enough.

Article 31
Clear enough.

Article 32
Clear enough.

Article 33
Clear enough.

Article 34
Clear enough.

• 8 - -
  Article 35
  Paragraph (1)
  What is meant by "seeking more than 1 (one) choice" is that Insurance Brokerage Companies provide alternative Insurance Companies to be chosen by prospective policyholders, insured parties, or participants, for example through auctions. The appointment of Insurance Companies through auction mechanisms is conducted by policyholders, insured parties, or participants.

Paragraph (2)
What is meant by "seeking more than 1 (one) choice" is that Reinsurance Brokerage Companies provide alternative Reinsurance Companies or Sharia Reinsurance Companies to be chosen by prospective Ceding Companies, for example, Insurance Brokerage Companies do not direct the placement of specific reinsurance or Sharia reinsurance.

Paragraph (3)
What is meant by "independent" is not influenced by other parties.

Article 36
Paragraph (1)
Letter a
Clear enough.

Letter b
The information on financial health levels referred to is the solvency level of the latest reporting period.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

• 9 - -
  Article 37
  Paragraph (1)
  What is meant by "placing reinsurance or Sharia reinsurance closure" is placing reinsurance or Sharia reinsurance that has received approval from Ceding Companies.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.

Article 38
Clear enough.

Article 39
Clear enough.

Article 40
Clear enough.

Article 41
Clear enough.

Article 42
What is meant by "temporary closure documents" includes cover notes and reinsurance closure confirmations.

Article 43
Clear enough.

Article 44
Clear enough.

• 10 - -
  Article 45
  Paragraph (1)
  What is meant by "helping" includes providing data or information owned by Insurance Brokerage Companies for court or out-of-court needs.

Paragraph (2)
What is meant by "helping" includes providing data or information owned by Reinsurance Brokerage Companies for court or out-of-court needs.

Article 46
Paragraph (1)
What is meant by "conducting Insurance Brokerage Business or Reinsurance Brokerage Business" is evidenced by proof of insurance or Sharia insurance placement for Insurance Brokerage Companies or proof of reinsurance or Sharia reinsurance placement for Reinsurance Brokerage Companies.

Paragraph (2)
Letter a
What is meant by "not conducting Insurance Brokerage Business or Reinsurance Brokerage Business" is not conducting Insurance Brokerage Business or Reinsurance Brokerage Business for 6 (six) consecutive months.

Letter b
What is meant by "not conducting business transactions" is no business transactions for 6 (six) consecutive months.

Article 47
Clear enough.

Article 48
Clear enough.

• 11 - -
  Article 49
  This is clear.

Article 50
The term "personal data and/or information" includes:
a. Individuals:

1. Name;
2. Address;
3. Date of birth and/or age;
4. Telephone number; and/or
5. Mother's maiden name; and
   b. Corporations:
6. Name;
7. Address;
8. Telephone number;
9. Composition of directors and commissioners, including identity documents such as ID cards/passports/residence permits; and/or
10. Composition of shareholders.

Article 51
This is clear.

Article 52
Paragraph (1)
The term "cooperation with other parties" includes among others:
a. Cooperation between an Insurance Broker Company and banks, financing companies, online marketers, and/or direct marketers; or b. Cooperation between an Insurance Loss Assessor Company and foreign insurance loss assessors.

Paragraph (2)
This is clear.

Paragraph (3)
This is clear.

• 12 - -
  Paragraph (4)
  Letter a
  This is clear.

Letter b
The term "insurer" refers to an Insurance Company, Sharia Insurance Company, Reinsurance Company, or Sharia Reinsurance Company.

Letter c
This is clear.

Article 53
This is clear.

Article 54
Paragraph (1)
Cooperation between an Insurance Loss Assessor Company and an insurance loss assessor may take the form of a technical supporting agreement or an affiliate relationship.

Paragraph (2)
This is clear.

Paragraph (3)
This is clear.

Article 55
Paragraph (1)
The term "main activity of an Insurance Broker Company" refers to consultation and/or intermediation in closing insurance or Sharia insurance policies and handling claim settlements. The term "main activity of a Reinsurance Broker Company" refers to consultation and/or intermediation in placing reinsurance or Sharia reinsurance and handling claim settlements. The term "main activity of an Insurance Loss Assessor Company" refers to claim assessment services and consultation services regarding insured objects.

• 13 - -
  Paragraph (2)
  This is clear.

Paragraph (3)
This is clear.

Article 56
Equity consists of:
a. Paid-in capital; b. Additional paid-in capital, consisting of:

1. Share premium/discount;
2. Equity issuance costs; and
3. Other items in accordance with financial accounting standard principles;
   c. Transaction differences from restructuring entities under common control;
   d. Retained earnings/losses balance; e. Current year profit/loss; f. Treasury stock; and/or g. Other equity components.

Article 57
This is clear.

Article 58
This is clear.

Article 59
This is clear.

Article 60
Paragraph (1)
This is clear.

Paragraph (2)
This is clear.

Paragraph (3)
This is clear.

• 14 - -
  Paragraph (4)
  The term "less than 6 (six) months until the end of the calendar year" means from July 1 to December 31.

Paragraph (5)
This is clear.

Paragraph (6)
This is clear.

Article 61
This is clear.

Article 62
This is clear.

Article 63
This is clear.

Article 64
This is clear.

Article 65
This is clear.

Article 66
This is clear.

Article 67
This is clear.

Article 68
This is clear.

Article 69
This is clear.

• 15 - -
  Article 70
  This is clear.

Article 71
This is clear.

Article 72
This is clear.

Article 73
This is clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5993