POJK on the Supervision of Social Security Administration Bodies by the Financial Services Authority

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER: 5/POJK.05/2013
ON
SUPERVISION OF SOCIAL SECURITY ADMINISTRATION BODIES BY THE FINANCIAL SERVICES AUTHORITY BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to carry out supervision over Social Security Administration Bodies as mandated in Law Number 24 of 2011 concerning Social Security Administration Bodies, it is necessary to establish a Financial Services Authority Regulation concerning the Supervision of Social Security Administration Bodies by the Financial Services Authority; Recalling: 1. Law Number 40 of 2004 concerning the National Social Security System (State Gazette of the Republic of Indonesia Year 2004 Number 150, Supplement to the State Gazette of the Republic of Indonesia Number 4456);
2. 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);
3. Law Number 24 of 2011 concerning Social Security Administration Bodies (State Gazette of the Republic of Indonesia Year 2011 Number 116, Supplement to the State Gazette of the Republic of Indonesia Number 5256);
DECIDING:
Establishing: FINANCIAL SERVICES AUTHABILITY REGULATION CONCERNING THE SUPERVISION OF SOCIAL SECURITY ADMINISTRATION BODIES BY THE FINANCIAL SERVICES AUTHORITY.

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

1. Financial Services Authority, hereinafter abbreviated as OJK, is the Financial Services Authority as referred to in Law Number 21 of 2011 concerning the Financial Services Authority.
2. National Social Security Council, hereinafter abbreviated as DJSN, is the National Social Security Council as referred to in Law Number 24 of 2011 concerning Social Security Administration Bodies.
3. Social Security Administration Body, hereinafter abbreviated as BPJS, is the Social Security Administration Body as referred to in Law Number 24 of 2011 concerning Social Security Administration Bodies, which consists of BPJS Kesehatan and BPJS Ketenagakerjaan.
4. BPJS Kesehatan is a public legal entity established to administer the health insurance program as referred to in Law Number 24 of 2011 concerning Social Security Administration Bodies.
5. BPJS Ketenagakerjaan is a public legal entity established to administer work accident insurance, old age savings, pension insurance, and death benefits as referred to in Law Number 24 of 2011 concerning Social Security Administration Bodies.
6. Examination is a series of activities to search for, collect, process, and evaluate data and/or information, and to assess and provide conclusions regarding the administration of social security programs by BPJS.
7. Supervision is the process of evaluating BPJS to ensure that BPJS executes its functions well and successfully achieves the established objectives.
8. Labor Social Security Fund is a trust fund owned by all participants of work accident insurance, old age savings, pension insurance, and death benefits, which is the collection of contributions plus the results of their development, managed by BPJS Ketenagakerjaan for benefit payments to participants and operational financing of social security program administration.
9. Health Social Security Fund is a trust fund owned by all health insurance participants, which is the collection of contributions plus the results of their development, managed by BPJS Kesehatan for benefit payments to participants and operational financing of social security program administration.
10. Examiner is an OJK employee or a party designated by OJK to conduct Examinations.
11. Participant is any person, including foreigners, who works in Indonesia for at least 6 (six) months and has paid contributions as referred to in Law Number 24 of 2011 concerning Social Security Administration Bodies.

CHAPTER II
SCOPE OF SUPERVISION OF BPJS BY OJK
Article 2
(1) OJK conducts supervision over BPJS.
(2) The scope of OJK supervision over BPJS as referred to in paragraph (1) includes:
a. financial health; b. implementation of good corporate governance including business processes;
c. management and investment performance;
d. implementation of good risk management and controls; e. detection and resolution of financial crimes (fraud); f. valuation of assets and liabilities; g. compliance with laws and regulations; h. information openness to the public (public disclosure);
i. consumer protection;
j. contribution collectibility ratios; k. monitoring of systemic impact; and
l. other aspects that are functions, duties, and authorities of OJK based on laws and regulations.
(3) Supervision over the aspects referred to in paragraph (2) is based on laws and regulations.
(4) In the event that laws and regulations as referred to in paragraph (3) do not yet regulate the aspects referred to in paragraph (2), supervision is conducted by referring to standards, principles, and practices of healthy social security administration.

Article 3
(1) OJK supervision over BPJS as referred to in Article 2 paragraph (1) consists of:
a. direct supervision; and b. indirect supervision.
(2) Supervision as referred to in paragraph (1) is conducted by operational units within the Non-Bank Financial Industry Supervision division of OJK.

CHAPTER III
DIRECT SUPERVISION
Article 4
Direct supervision as referred to in Article 3 paragraph (1) letter a is conducted through Examinations.

Article 5
(1) Examinations of BPJS are conducted by Examiners.
(2) In carrying out Examinations as referred to in paragraph (1), Examiners may conduct Examinations of other companies owned by BPJS and/or other related parties. (3) Examinations aim to:
a. obtain an overview of the actual condition of BPJS; b. ensure that BPJS has complied with laws and regulations;
c. ensure that BPJS has implemented good governance, risk management, and controls; and/or
d. ensure that BPJS has made efforts to fulfill obligations to Participants.

Article 6
Examinations conducted by OJK over BPJS may cover all aspects or some aspects as referred to in Article 2 paragraph (2).

Article 7
Examinations of BPJS are conducted at least 1 (one) time in 1 (one) year.

Article 8
(1) Examiners must conduct Examinations in accordance with this Financial Services Authority Regulation and BPJS Examination guidelines.
(2) Further provisions regarding the BPJS Examination guidelines as referred to in paragraph (1) are regulated by a Regulation of the OJK Commissioners.

Article 9
(1) BPJS and other examined parties as referred to in Article 5 paragraph (1) and paragraph (2) are prohibited from refusing and/or hindering the Examination process. (2) BPJS and other examined parties as referred to in Article 5 paragraph (1) and paragraph (2) are obligated to:
a. fulfill requests to provide or lend books, files, notes, dispositions, memoranda, documents, electronic data, including copies thereof; b. provide statements and explanations related to the aspects examined, both orally and in writing;
c. give Examiners the opportunity to enter and examine places or rooms deemed necessary;
d. give Examiners the opportunity to study the existence and use of physical facilities related to the aspects examined; and/or e. present third parties, including independent auditors and independent actuaries, to provide data, documents, and/or statements to Examiners related to the Examination. (3) Examined parties are deemed to be hindering the smooth progress of the examination process if they do not fulfill the obligations as referred to in paragraph (2) or lend books, provide notes, documents, or statements that are incorrect.

Article 10
(1) Examinations are conducted by Examiners based on an Examination Order issued by OJK.
(2) Examiners are obligated to submit the Examination Order to BPJS and other examined parties as referred to in Article 5 paragraph (1) and paragraph (2).
(3) Before conducting Examinations as referred to in paragraph (1), OJK submits an Examination Notification to BPJS and other examined parties as referred to in Article 5 paragraph (1) and paragraph (2). (4) The Examination Notification as referred to in paragraph (3) contains the following information:
a. number and date of the Examination Order; b. name of the Examiner;
c. scope of the Examination;
d. objectives of the Examination; e. duration of the Examination; and f. initial documents required for the Examination.
(5) OJK may conduct Examinations without prior submission of an Examination Notification if:
a. such notification is suspected to complicate or hinder the Examination process; b. there are suspicions of actions to obscure the actual state of affairs; or
c. there are suspicions of actions to conceal, eliminate, or withhold data, statements, or reports required for the Examination.

Article 11
(1) Before the Examination ends, the Examiner must conduct confirmation with the Board of Directors of BPJS regarding the Examination results.
(2) If, after the confirmation process as referred to in paragraph (1), differences of opinion remain, the Board of Directors of BPJS may submit written explanations to OJK no later than 10 (ten) calendar days after the end of the Examination process.

Article 12
(1) After the Examination process ends, the Examiner prepares an Examination Results Report.
(2) OJK submits the Examination Results Report as referred to in paragraph (1) to BPJS no later than 20 (twenty) calendar days after the deadline for submitting written explanations as referred to in Article 11 paragraph (2). (3) The Examination Results Report as referred to in paragraph (1) is confidential. (4) The confidential status of the Examination Results Report as referred to in paragraph (3) may be lifted after obtaining written approval from OJK or based on laws and regulations.

Article 13
(1) The Examination Results Report as referred to in Article 12 paragraph (1) may contain follow-up steps to be taken by BPJS or other stakeholders.
(2) In the event that there are follow-up steps to be taken by BPJS as referred to in paragraph (1), BPJS is obligated to implement such follow-up steps.
(3) BPJS is obligated to report the implementation of follow-up steps as referred to in paragraph (2) to OJK within the time limit established in the Examination Results Report. (4) The obligation to report the implementation of follow-up steps as referred to in paragraph (3) ends when OJK assesses that BPJS has implemented the aforementioned follow-up steps.

CHAPTER IV
INDIRECT SUPERVISION
Article 14
Indirect supervision as referred to in Article 3 paragraph (1) letter b is conducted through:
a. analysis of reports submitted by BPJS to OJK; and/or b. analysis of reports submitted by other parties to OJK.

Article 15
OJK may request BPJS to submit specific information and/or documents in the context of indirect supervision over BPJS.

CHAPTER V
REPORTING
Article 16
(1) BPJS Kesehatan and BPJS Ketenagakerjaan are obligated to prepare financial reports as follows:
a. annual financial reports of BPJS Kesehatan and BPJS Ketenagakerjaan for the period from January 1 to December 31; b. annual financial reports of the Health Social Security Fund and Labor Social Security Fund for each labor program for the period from January 1 to December 31;
c. semi-annual financial reports of BPJS Kesehatan and BPJS Ketenagakerjaan ending on June 30 and December 31;
d. semi-annual financial reports of the Health Social Security Fund and Labor Social Security Fund for each labor program ending on June 30 and December 31; e. monthly financial reports of BPJS Kesehatan and BPJS Ketenagakerjaan for periods ending on January 31, February 28 or 29, March 31, April 30, May 31, June 30, July 31, August 31, September 30, October 31, November 30, and December 31; and f. monthly financial reports of the Health Social Security Fund and Labor Social Security Fund for each labor program for periods ending on January 31, February 28 or 29, March 31, April 30, May 31, June 30, July 31, August 31, September 30, October 31, November 30, and December 31. (2) BPJS Kesehatan and BPJS Ketenagakerjaan are obligated to prepare program management reports as follows:
a. annual program management reports for health insurance and each labor program for the period from January 1 to December 31; b. semi-annual program management reports for health insurance and each labor program ending on June 30 and December 31; and
c. monthly program management reports for health insurance and each labor program for periods ending on January 31, February 28 or 29, March 31, April 30, May 31, June 30, July 31, August 31, September 30, October 31, November 30, and December 31.
(3) BPJS Kesehatan and BPJS Ketenagakerjaan are obligated to prepare annual actuarial reports for the health insurance program and for each labor program for the period from January 1 to December 31. (4) Reports as referred to in paragraph (1) are prepared and presented based on applicable financial accounting standards. (5) Reports as referred to in paragraph (1) letters a and b, and paragraph (2) letter a, must be audited by independent auditors. (6) Reports as referred to in paragraph (2) are prepared and presented based on laws and regulations. (7) Annual actuarial reports as referred to in paragraph (3) are reports that estimate the ability of the Social Security Funds to fulfill their future obligations. (8) Reports as referred to in paragraph (3) must be signed by the actuaries of BPJS Kesehatan and BPJS Ketenagakerjaan. (9) Annual actuarial reports as referred to in paragraph (3) must be reviewed and assessed for presentation fairness by independent actuaries who are not affiliated with the management of BPJS Kesehatan and BPJS Ketenagakerjaan at least 1 (one) time in 3 (three) years. (10) Further provisions regarding the form and structure of reports as referred to in paragraph (1) letters e and f, paragraph (2) letter c, and paragraph (3) are regulated by an OJK Circular Letter.

Article 17
(1) BPJS Kesehatan and BPJS Ketenagakerjaan are obligated to submit:
a. annual reports as referred to in Article 16 paragraph (1) letters a and b, Article 16 paragraph (2) letter a, and Article 16 paragraph (3) no later than June 30 of the following year; b. semi-annual reports as referred to in Article 16 paragraph (1) letters c, d, and Article 16 paragraph (2) letter b no later than 1 (one) month after the end of the relevant semester; and
c. monthly reports as referred to in Article 16 paragraph (1) letters e and f, and Article 16 paragraph (2) letter c no later than 15 (fifteen) days after the end of the relevant month, to OJK.
(2) In the event that the deadline for submitting reports as referred to in paragraph (1) falls on a holiday, the submission deadline is the first working day after the aforementioned deadline.

CHAPTER VI
SANCTIONS AND RECOMMENDATIONS
Article 18
(1) In the event that BPJS is proven to have violated provisions as referred to in Article 9, Article 13 paragraph (2) and (3), Article 16 paragraph (1) to (7), and Article 17 paragraph (1) and/or findings from Examination results, OJK may impose administrative sanctions in the form of written warnings and/or provide recommendations to DJSN and/or the President. (2) Written warnings as referred to in paragraph (1) are given at most 3 (three) times consecutively with a maximum duration of 2 (two) months each. (3) In the event that OJK assesses that the type of violation and/or Examination findings cannot be resolved within the time limit as referred to in paragraph (2), OJK may establish an additional time limit of at most 6 (six) months. (4) OJK may provide recommendations to DJSN and/or the President in the event that BPJS fails to fulfill the obligation to follow up on the final written warning or Examination findings. (5) Recommendations as referred to in paragraph (1) include but are not limited to:
a. review of health insurance contribution amounts and each labor program contribution amounts; b. review of health insurance benefits and each labor program benefits;
c. review of investment policies of BPJS Kesehatan and BPJS Ketenagakerjaan;
d. review of investment policies of health insurance funds and labor insurance funds for each labor program; and/or e. replacement of part or all of the management of BPJS Kesehatan and BPJS Ketenagakerjaan.

CHAPTER VII
TRANSITIONAL PROVISIONS
Article 19
Upon the commencement of this Financial Services Authority Regulation, Financial Services Authority Regulation Number: 3/POJK.05/2013 concerning Monthly Reports of Non-Bank Financial Institutions is declared invalid for BPJS Kesehatan and BPJS Ketenagakerjaan.

Article 20
(1) The obligation to submit monthly reports as referred to in Article 17 paragraph (1) letter c is carried out by BPJS Kesehatan and BPJS Ketenagakerjaan starting from March 2014. (2) Submission of monthly reports starting from March 2014 as referred to in paragraph (1) includes monthly reports for periods ending on January 31, 2014, and February 28, 2014.

CHAPTER VIII
CLOSING PROVISIONS
Article 21
This Financial Services Authority Regulation takes effect upon being promulgated.
For the knowledge of everyone, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia. Established in Jakarta on December 31, 2013 CHAIRMAN OF THE COMMISSIONERS FINANCIAL SERVICES AUTHORITY, Signed, MULIAMAN D. HADAD Promulgated in Jakarta on December 31, 2013 MINISTER OF LAW AND HUMAN RIGHTS REPUBLIC OF INDONESIA, Signed, AMIR SYAMSUDIN STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2013 NUMBER 258 Copy matches the original HEAD OF LEGAL ASSISTANCE DIVISION LAW DIRECTORATE, Signed, MUFLI ASMAWIDJAJA