FINANCIAL SERVICES AUTHORITY

REPUBLIC OF INDONESIA

COPY

FINANCIAL SERVICES AUTHORITY REGULATION

OF THE REPUBLIC OF INDONESIA

NUMBER 9 /POJK.05/2021

CONCERNING

DETERMINATION OF STATUS AND SUPERVISORY FOLLOW-UP

FOR NON-BANK FINANCIAL SERVICE INSTITUTIONS

BY THE GRACE OF GOD THE ALMIGHTY

THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering:

a. that to support a sustainable and stable financial system, it is necessary to have healthy non-bank financial service institutions;

b. that as part of risk-based supervision, problems arising in the non-bank financial service institution sector need to be addressed early by increasing supervisory steps against non-bank financial service institutions starting from normal supervision, which then has the potential to worsen their health;

c. that based on the considerations referred to in letters a and b, and to implement the authority and duties of regulation and supervision in the non-bank financial service institution sector as referred to in Article 8 and Article 9 of Law Number 21 of 2011 concerning the Financial Services Authority, it is necessary to establish a Financial Services Authority Regulation concerning the Determination of Status and Supervisory Follow-up for Non-Bank Financial Service Institutions;

Recalling:

1. Law Number 11 of 1992 concerning Pension Funds (State Gazette of the Republic of Indonesia Year 1992 Number 37, Supplement to the State Gazette of the Republic of Indonesia Number 3477);

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 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);

DECIDES:

To establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING THE DETERMINATION OF STATUS AND SUPERVISORY FOLLOW-UP FOR NON-BANK FINANCIAL SERVICE INSTITUTIONS.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation:

1. Non-Bank Financial Service Institutions, hereinafter referred to as NBFIs, are institutions that carry out activities in the insurance, pension fund, and financing institution sectors.

2. Board of Directors is the corporate organ authorized and fully responsible for managing the corporation for the interests of the corporation, in accordance with the purpose and objectives of the corporation and representing the corporation, both inside and outside of court, in accordance with the articles of association for NBFIs in the form of a limited liability company or equivalent to the Board of Directors for NBFIs in the form of a cooperative, joint venture, and pension fund legal entity.

3. Board of Commissioners is the corporate organ tasked with conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors for NBFIs in the form of a limited liability company or equivalent to the Board of Commissioners for NBFIs in the form of a cooperative, joint venture, and pension fund legal entity.

4. NBFI Health Level is the result of an assessment of the NBFI's condition conducted regarding good corporate governance, risk profile, profitability, and capital or funding.

5. Composite Rating is the final result of the assessment of the NBFI Health Level.

6. Controlling Shareholders, hereinafter abbreviated as CS, are individuals, legal entities, and/or business groups that own insurance company or financing institution shares or capital amounting to 25% (twenty-five percent) or more of the issued shares with voting rights, or own shares or capital of an insurance company or financing institution less than 25% (twenty-five percent) of the issued shares with voting rights but can be proven to have controlled the insurance company or financing institution, directly or indirectly.

7. Insurance Company Controller is a party that directly or indirectly has the ability to determine the Board of Directors or Board of Commissioners, and/or influence the actions of the Board of Directors or Board of Commissioners in an insurance company.

Article 2

NBFIs as referred to in Article 1 number 1 include:

a. insurance companies, consisting of:

1. insurance companies;

2. reinsurance companies;

3. sharia insurance companies; and

4. sharia reinsurance companies,

as referred to in regulations concerning insurance;

b. pension funds as referred to in regulations concerning pension funds; and

c. financing institutions, consisting of:

1. financing companies; and

2. sharia financing companies,

as referred to in regulations concerning financing institutions.

Article 3

(1) The supervisory status of NBFIs is determined by the Financial Services Authority.

(2) The supervisory status of NBFIs as referred to in paragraph (1) consists of:

a. normal supervision;

b. intensive supervision; or

c. special supervision.

(3) The determination of supervisory status as referred to in paragraph (2) is based on factors:

a. Composite Rating;

b. corporate governance good practice factor rating; and/or

c. quantitative parameters.

(4) The determination of the supervisory status of NBFIs as referred to in paragraph (1) is carried out at any time in accordance with the Financial Services Authority's assessment, paying attention to the NBFI's condition based on the factors referred to in paragraph (3).

CHAPTER II

CRITERIA FOR NBFI SUPERVISORY STATUS

First Section

NBFIs with Intensive Supervisory Status

Article 4

(1) The determination of NBFIs in intensive supervisory status as referred to in Article 3 paragraph (2) letter b, if it meets the criteria:

a. NBFI Health Level is set at Composite Rating 4 (four) or Composite Rating 5 (five);

b. NBFI Health Level is set at Composite Rating 3 (three) with a corporate governance good practice factor rating at rating 4 (four) or rating 5 (five); or

c. meets quantitative parameters.

(2) Fulfillment of quantitative parameters as referred to in paragraph (1) letter c consists of:

a. for insurance companies, meeting quantitative parameters:

1. solvency level greater than or equal to 80% (eighty percent) and less than 120% (one hundred twenty percent) of risk-based minimum capital or risk-based minimum tabarru' funds;

2. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or

3. investment adequacy ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent);

b. for employer pension funds running defined benefit pension programs, meeting quantitative parameters:

1. funding quality at level 3 (three) with a solvency ratio greater than or equal to 50% (fifty percent) and less than 80% (eighty percent);

2. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or

3. contribution receivable age greater than 3 (three) months and less than 24 (twenty-four) months;

c. for employer pension funds running defined contribution pension programs, meeting quantitative parameters:

1. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent); and/or

2. contribution receivable age greater than 3 (three) months and less than 24 (twenty-four) months;

d. for financial institution pension funds, meeting quantitative parameters:

1. liquidity ratio greater than or equal to 80% (eighty percent) and less than 100% (one hundred percent);

2. for pension funds established for more than 3 (three) years, having net assets less than Rp10,000,000,000.00 (ten billion rupiah); and/or

3. participant decline ratio during 1 (one) year greater than 50% (fifty percent); and

e. for financing institutions, meeting quantitative parameters:

1. equity ratio to paid-up capital greater than or equal to 0% (zero percent) and less than 50% (fifty percent); and/or

2. net problematic financing receivable quality ratio and/or net productive asset problematic asset ratio greater than 5% (five percent) and less than or equal to 25% (twenty-five percent).

Second Section

NBFIs with Special Supervisory Status

Article 5

(1) The determination of NBFIs in special supervisory status as referred to in Article 3 paragraph (2) letter c, if it meets the criteria:

a. NBFI Health Level is set at Composite Rating 5 (five) with a corporate governance good practice factor rating at rating 5 (five); or

b. meets quantitative parameters.

(2) Fulfillment of quantitative parameters as referred to in paragraph (1) letter b consists of:

a. for insurance companies, meeting quantitative parameters:

1. solvency level less than 80% (eighty percent) of risk-based minimum capital or risk-based minimum tabarru' funds;

2. liquidity ratio less than 80% (eighty percent); and/or

3. investment adequacy ratio less than 80% (eighty percent);

b. for employer pension funds running defined benefit pension programs, meeting quantitative parameters:

1. funding quality at level 3 (three) with a solvency ratio less than 50% (fifty percent);

2. liquidity ratio less than 80% (eighty percent); and/or

3. contribution receivable age greater than or equal to 24 (twenty-four) months;

c. for employer pension funds running defined contribution pension programs, meeting quantitative parameters:

1. liquidity ratio less than 80% (eighty percent); and/or

2. contribution receivable age greater than or equal to 24 (twenty-four) months;

d. for financial institution pension funds, meeting quantitative parameters:

1. liquidity ratio less than 80% (eighty percent);

2. for pension funds established for more than 3 (three) years, for two consecutive years having net assets less than Rp10,000,000,000.00 (ten billion rupiah); and/or

3. participant decline ratio for 2 (two) consecutive years greater than 50% (fifty percent); and

e. for financing institutions, meeting quantitative parameters:

1. equity ratio to paid-up capital less than 0% (zero percent); and/or

2. net problematic financing receivable quality ratio and/or net productive asset problematic asset ratio greater than 25% (twenty-five percent).

Third Section

Duration of Supervisory Status

Article 6

(1) NBFIs with intensive supervisory status are determined by the Financial Services Authority for a maximum period of 1 (one) year from the date of the Financial Services Authority's notification letter.

(2) If the duration of intensive supervisory status as referred to in paragraph (1) expires and the NBFI still meets the criteria as referred to in Article 4, the Financial Services Authority may determine an extension of the NBFI's supervisory status duration at most 1 (one) time with a maximum duration of 1 (one) year.

(3) The determination of the extension of the NBFI's supervisory status duration as referred to in paragraph (2) is accompanied by an increase in supervisory actions that must be carried out by the NBFI.

(4) If the extension period as referred to in paragraph (2) expires, the Financial Services Authority determines an upgrade of the NBFI's supervisory status.

(5) For NBFIs with special supervisory status as referred to in Article 3 paragraph (2) letter c, the duration of supervisory status is determined by the Financial Services Authority for a maximum of 6 (six) months from the date of the Financial Services Authority's notification letter.

(6) If the duration of the NBFI's special supervisory status as referred to in paragraph (5) expires, the Financial Services Authority may determine an extension of the special supervisory status duration.

(7) The determination of the extension of the duration as referred to in paragraph (6) is based on the Financial Services Authority's assessment considering the resolution of the approved follow-up plan.

CHAPTER III

SUPERVISORY FOLLOW-UP OF STATUS

Article 7

(1) The Financial Services Authority sends a notification letter of the NBFI's supervisory status as referred to in Article 3 paragraph (2) letters b and c to the NBFI's Board of Directors and Commissioners, accompanied by:

a. reasons for the determination of supervisory status; and

b. supervisory actions.

(2) NBFIs with intensive and special supervisory status are required to implement the supervisory actions as referred to in paragraph (1) letter b ordered by the Financial Services Authority.

(3) Supervisory actions as referred to in paragraph (2) are:

a. writing off problematic financing receivables and calculating the losses of the financing institution with the financing institution's capital;

b. limiting the payment of remuneration or other forms equivalent to it to members of the Board of Directors, members of the Board of Commissioners, and/or members of the Sharia Supervisory Board, or compensation to related parties;

c. delaying or not distributing profits;

d. strengthening capital through capital deposits;

e. requesting commitments from pension fund founders to make payments to the pension fund;

f. not conducting certain transactions with related parties and/or related parties determined by the Financial Services Authority;

g. limiting the implementation of product issuance plans and/or the implementation of new activities;

h. limiting or not conducting asset growth, participation, and/or provision of new funds;

i. selling part or all of the assets and/or transferring NBFI liabilities to other NBFIs and/or related parties;

j. transferring product portfolios to other similar NBFIs;

k. not issuing debt instruments without the approval of the Financial Services Authority;

l. not expanding office networks;

m. not conducting certain activities;

n. conducting mergers or consolidations with other similar NBFIs;

o. replacing members of the NBFI's Board of Directors and/or Board of Commissioners;

p. placing statutory managers; and/or

q. other supervisory actions.

(4) Supervisory actions given by the Financial Services Authority to NBFIs as referred to in paragraph (3) are based on the Financial Services Authority's assessment of the problems faced by the NBFI.

Article 8

(1) NBFIs with intensive supervisory status as referred to in Article 4 paragraph (1) are required to:

a. submit a follow-up plan according to the problems faced;

b. submit the realization of the follow-up plan; and

c. carry out other actions and/or report specific matters determined by the Financial Services Authority.

(2) NBFIs with special supervisory status as referred to in Article 5 paragraph (1) are required to:

a. submit a follow-up plan according to the problems faced;

b. submit the realization of the follow-up plan;

c. submit a complete list of related parties;

d. submit the latest financial statements;

e. submit details of assets grouped by liquidity level;

f. submit the latest Composite Rating of the NBFI Health Level;

g. submit the latest report on the structure of the business group related to the NBFI, including the legal entity of the NBFI's shareholders up to the final ownership;

h. submit cash flow projection reports for a period of 1 (one) month ahead or based on other reporting periods, detailed daily and with frequency as determined by the Financial Services Authority; and

i. carry out other actions and/or submit information and other documents determined by the Financial Services Authority.

(3) The follow-up plan as referred to in paragraph (1) letter a and paragraph (2) letter a must be submitted to the Financial Services Authority within a maximum of 15 (fifteen) working days from the notification letter of the supervisory status by the Financial Services Authority, at least containing a repair plan according to the problems faced by the NBFI accompanied by a completion timeline.

(4) The follow-up plan as referred to in paragraph (3) is evaluated by the Financial Services Authority since the follow-up plan is received completely.

(5) In the event that the submitted follow-up plan is rejected by the Financial Services Authority, the NBFI is required to submit an adjustment to the follow-up plan within a maximum of 5 (five) working days from the date of rejection notification.

(6) The obligations as referred to in paragraph (2) letters c through i must be submitted to the Financial Services Authority within a maximum of 3 (three) working days from the date of the notification letter of the NBFI with special supervisory status.

Article 9

(1) In the event that an NBFI with normal supervisory status is assessed to have significant potential or problems, the Financial Services Authority may carry out supervisory actions as referred to in Article 7 paragraph (3) against the NBFI.

(2) Supervisory actions ordered by the Financial Services Authority to the NBFI as referred to in paragraph (1) are based on the Financial Services Authority's assessment of the potential or problems faced by the NBFI.

(3) The NBFI is required to implement the supervisory actions as referred to in paragraph (1) ordered by the Financial Services Authority.

(4) The NBFI as referred to in paragraph (1) is required to submit a follow-up plan to the Financial Services Authority.

(5) The procedure for submitting the follow-up plan to the Financial Services Authority as referred to in paragraph (4) refers to Article 8 paragraph (3), paragraph (4), and paragraph (5).

Article 10

(1) In the event that an NBFI is determined to have intensive supervisory status or special supervisory status caused by capital/funding problems, in addition to being required to fulfill the provisions as referred to in Article 7 paragraph (2), the NBFI and/or CS, Insurance Company Controller, or employer is required to submit a capital/funding repair plan.

(2) The capital/funding repair plan as referred to in paragraph (1) must be submitted to the Financial Services Authority within a maximum of 10 (ten) working days from the NBFI being determined in intensive supervisory status and special supervisory status.

(3) The capital/funding repair plan as referred to in paragraph (1) must describe the NBFI's ability to fulfill the solvency level, funding quality, and/or own capital to paid-up capital provisions established by the Financial Services Authority.

(4) The capital/funding repair plan is assessed by the Financial Services Authority since the capital/funding repair plan is received completely.

(5) In the event that the capital/funding repair plan as referred to in paragraph (1) is rejected, the NBFI and/or CS, Insurance Company Controller, or employer is required to submit an adjustment to the capital/funding repair plan to the Financial Services Authority within a maximum of 5 (five) working days from the date of rejection.

Article 11

(1) The NBFI is required to submit to the Financial Services Authority:

a. the realization of the follow-up plan as referred to in Article 8 paragraph (1) letter b and paragraph (2) letter b, and Article 9 paragraph (4); and/or

b. the realization of the capital/funding repair plan as referred to in Article 10 paragraph (1),

at the end of each month at the latest on the seventh working day of the following month.

(2) The realization of the follow-up plan and/or the realization of the capital/funding repair plan as referred to in paragraph (1) contains at least:

a. the NBFI's problems;

b. repair actions that have been carried out by the NBFI; and

c. the time of repair implementation.

Article 12

(1) In the event that the Financial Services Authority assesses:

a. the NBFI's condition is worsening;

b. there are certain business activities that are one of the causes of the worsening of the NBFI's condition; and/or

c. violations of statutory regulations are committed by:

1. Board of Directors;

2. Board of Commissioners;

3. Sharia Supervisory Board; and/or

4. CS, Insurance Company Controller, and/or employer,

the Financial Services Authority may carry out supervisory actions in the form of restrictions on certain business activities against the NBFI with special supervisory status.

(2) Restrictions on certain business activities as referred to in paragraph (1) are communicated in writing by the Financial Services Authority to the NBFI and/or CS, Insurance Company Controller, or employer accompanied by the duration of the restriction on certain business activities.

Article 13

(1) The imposition of restrictions on certain business activities against the NBFI as referred to in Article 12 paragraph (1) is announced on the Financial Services Authority's website.

(2) The announcement of the imposition of restrictions on certain business activities as referred to in paragraph (1) is accompanied by:

a. reasons for the restriction on certain business activities; and

b. repair actions that must be carried out by the NBFI and/or prohibitions ordered by the Financial Services Authority.

Article 14

(1) The NBFI subject to restrictions on certain business activities as referred to in Article 12 paragraph (1) is required to:

a. stop certain business activities subject to restrictions; and

b. notify all office networks regarding the certain business activities subject to restrictions.

(2) The cessation of certain business activities and notification to all office networks as referred to in paragraph (1) must be carried out from the date of receiving the notification letter of restrictions on certain business activities from the Financial Services Authority as referred to in Article 12 paragraph (2).

Article 15

(1) In the event that the NBFI's condition improves and no longer meets the criteria as referred to in Article 4 and Article 5, the NBFI is determined to no longer be in intensive and special supervisory status.

(2) The determination of the change of the NBFI's supervisory status as referred to in paragraph (1) is notified in writing by the Financial Services Authority to the NBFI's Board of Directors and Board of Commissioners.

Article 16

NBFIs with special supervisory status determined by the Financial Services Authority cannot be rehabilitated, if based on the Financial Services Authority's assessment it is known that:

a. the time limit for special supervisory status has expired; and

b. the NBFI still meets the criteria as referred to in Article 5.

Article 17

(1) In the event that an NBFI with special supervisory status that has been determined by the Financial Services Authority cannot be rehabilitated as referred to in Article 16, the Financial Services Authority revokes the NBFI's business license.

(2) The revocation of the NBFI's business license as referred to in paragraph (1) is communicated in writing to:

a. Board of Directors;

b. Board of Commissioners; and

c. CS, Insurance Company Controller, and/or employer.

(3) The revocation of the NBFI's business license as referred to in paragraph (1) is announced on the Financial Services Authority's official website.

CHAPTER IV

PROCEDURES FOR SUBMITTING REPORTS

Article 18

(1) The submission of documents as referred to in Article 8 paragraph (1), paragraph (2), paragraph (3), and paragraph (5), Article 9 paragraph (4), and Article 10 paragraph (1) and paragraph (5) to the Financial Services Authority is carried out online through the Financial Services Authority's data communication network system.

(2) In the event that the Financial Services Authority's data communication network system is not yet available or experiences...

technical disruption, the submission referred to in paragraph (1) is submitted to the Financial Services Authority (OJK) offline.

(3) In the event of a technical disruption as referred to in paragraph (2), the Financial Services Authority informs the Non-Bank Financial Service Institution (LJKNB).

(4) Offline submission as referred to in paragraph (2) is accompanied by a printed cover letter signed by the Board of Directors.

(5) The Company is deemed to have submitted documents as referred to in paragraph (1) subject to the following conditions:
a. online submission through the Financial Services Authority's data communication network system is evidenced by a receipt from the Financial Services Authority's data communication network system; or b. offline submission is evidenced by a receipt from the Financial Services Authority.

CHAPTER V
COMPLIANCE ENFORCEMENT
First Section
Administrative Sanctions
Article 19

(1) An LJKNB that violates the provisions as referred to in Article 7 paragraph (2), Article 8 paragraph (1), paragraph (2), paragraph (3), paragraph (5), paragraph (6), Article 9 paragraph (3), paragraph (4), Article 10 paragraph (1), paragraph (2), paragraph (5), Article 11 paragraph (1), and/or Article 14 shall be subject to administrative sanctions in the form of a written warning.

(2) In the event that the LJKNB has fulfilled the provisions as referred to in paragraph (1), the Financial Services Authority revokes the written warning sanction.

Second Section
Downgrading of Risk Assessment Results and Health Status, and Re-evaluation of Principal Parties of LJKNB
Article 20

In the event that the Financial Services Authority has imposed administrative sanctions as referred to in Article 19 and the LJKNB still fails to fulfill the provisions of Article 7 paragraph (2), Article 8 paragraph (1), paragraph (2), paragraph (3), paragraph (5), paragraph (6), Article 9 paragraph (3), paragraph (4), Article 10 paragraph (1), paragraph (2), paragraph (5), Article 11 paragraph (1), and/or Article 14, the Financial Services Authority may:
a. downgrade the health status assessment results; and/or b. conduct a re-evaluation of the principal parties of the LJKNB.

CHAPTER VI
CLOSING PROVISIONS
Article 21

This Financial Services Authority Regulation shall come into force on the date of its enactment.

This copy is consistent with the original.
Director of Law 1
Legal Department signed,
Mufli Asmawidjaja

In order that everyone may know it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 22 June 2021
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed,
WIMBOH SANTOSO

Enacted in Jakarta on 30 June 2021
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed,
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 144

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 9/POJK.05/2021
ON
DETERMINATION OF STATUS AND FOLLOW-UP OF SUPERVISION OF NON-BANK FINANCIAL SERVICE INSTITUTIONS

I. GENERAL

Healthy Non-Bank Financial Service Institutions (LJKNB) are one of the requirements to support the creation of financial system stability, national economic growth, and the maintenance of public trust in the industry. Therefore, every LJKNB problem needs to be addressed appropriately and resolved quickly so as not to disrupt financial system stability and lower public trust levels.

In efforts to rehabilitate an LJKNB, problems arising in the LJKNB need to be identified quickly and formulated accurately. Problems found must be handled immediately, and if the problems continue to grow, an increase in supervisory actions is required to be able to provide solutions to the problems occurring.

Quick supervisory actions aim to maintain the continuity of the LJKNB's business so that it can continue to fulfill its obligations to consumers. In cases where it is assessed that the LJKNB can no longer maintain its health, the Financial Services Authority must be able to promptly decide to revoke its business license (exit policy). The license revocation step is carried out immediately after the LJKNB is deemed unable to maintain its health level in order to minimize losses to consumers.

Regulation of the exit policy aspect for LJKNB is expected to provide more comprehensive and detailed guidance regarding supervision status, as well as supervisory actions for both the Financial Services Authority and the LJKNB, so that the rights of participants, customers, and/or policyholders can be fulfilled immediately, and minimizing problems related to participant rights due to incomplete legal instruments or prolonged LJKNB health conditions.

An effective and efficient exit policy mechanism for LJKNB will ultimately increase LJKNB consumer protection and increase consumer trust in LJKNB.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Clear enough.

Article 3
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
What is meant by "normal supervision" is supervision of an LJKNB that meets the criteria as an LJKNB assessed as having no potential difficulties endangering business continuity or as an LJKNB assessed as not experiencing difficulties endangering business continuity.

Letter b
What is meant by "intensive supervision" is an increase in the supervision process of an LJKNB that was previously under normal supervision with the aim of returning the LJKNB's condition to normal supervision status.

Actions to return the LJKNB's condition are carried out by establishing supervisory actions (supervisory actions) appropriate to the LJKNB's problems.

Letter c
What is meant by "special supervision" is an increase in the supervision process of an LJKNB that was previously under normal or intensive supervision with the aim of returning the LJKNB's condition to normal supervision status.

Actions to return the LJKNB's condition are carried out by establishing supervisory actions (supervisory actions) appropriate to the LJKNB's problems.

Paragraph (3)
Letter a
Clear enough.

Letter b
What is meant by "good corporate governance factor rating" is the good corporate governance factor rating as referred to in the Financial Services Authority Regulation regarding the assessment of the health level of non-bank financial service institutions.

Factor assessment is conducted based on LJKNB financial reports and the Financial Services Authority Regulation regarding the assessment of the health level of non-bank financial service institutions.

Letter c
Clear enough.

Paragraph (4)
Clear enough.

Article 4
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
Number 1
What is meant by "solvency level for insurance companies" is the difference between the amount of permitted assets minus the amount of liabilities.

What is meant by "risk-based minimum capital" is the amount of funds needed to anticipate potential losses resulting from deviations in the management of assets and liabilities.

What is meant by "risk-based minimum tabarru' funds" is the amount of funds needed to anticipate potential losses resulting from deviations in the management of assets and liabilities from tabarru' funds.

Number 2
What is meant by "liquidity ratio" is the ratio of current assets to current liabilities.

Number 3
What is meant by "investment adequacy ratio" is the ratio of the total amount of permitted assets in the form of investments to assets in the form of cash and banks compared to the amount of retained technical reserves plus retained claim payment liabilities and other liabilities to policyholders or insured parties.

Letter b
Number 1
What is meant by "funding quality" is the state of funds from pension funds assessed based on actuarial valuation by determining solvency liabilities and actuarial present value.

Number 2
Clear enough.

Number 3
Clear enough.

Letter c
Clear enough.

Letter d
Number 1
Clear enough.

Number 2
Clear enough.

Number 3
What is meant by "participant decline ratio" is the ratio of the number of participants leaving to the total number of participants.

Letter e
Number 1
What is meant by "equity ratio to paid-up capital" is the ratio between the amount of financing company equity to the amount of paid-up capital.

Number 2
What is meant by "net problem financing receivables quality ratio" is the ratio between financing receivables of poor, doubtful, and non-performing quality, after deducting provisions for write-off of financing receivables for financing receivables consisting of poor, doubtful, and non-performing quality, to total financing receivables.

Article 5
Clear enough.

Article 6
Paragraph (1)
Clear enough.

Paragraph (2)
The calculation of the LJKNB supervision status duration is at most 1 (one) year, including the duration for drafting and revising the action plan.

Paragraph (3)
What is meant by "increasing supervisory actions" is an increase in the number of supervisory actions and/or the application of supervisory actions that have a heavier impact on the LJKNB than the supervisory actions established previously.

Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.

Paragraph (6)
Clear enough.

Paragraph (7)
The Financial Services Authority's assessment is given based on the belief that with the extension of time, the LJKNB in question can resolve the problems faced.

What is meant by "resolution of approved action plans" includes, among others, payment of contributions from pension fund founders or the process of acquiring insurance companies and financing institutions.

Article 7
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Letter a
Clear enough.

Letter b
What is meant by "related parties" is:

1. for insurance companies, including:
   a. PSP; b. Controlling Parties of Insurance Companies; and
   c. parties having an affiliation relationship with insurance companies;
2. for financing institutions, including:
   a. individuals or business entities that are controllers of financing companies; b. business entities where financing companies act as controllers;
   c. individuals or business entities acting as controllers of business entities as referred to in letter b;
   d. business entities whose control is carried out by:

1. individuals and/or business entities as referred to in letter a; or
2. individuals and/or business entities as referred to in letter c;
   e. Board of Commissioners or Board of Directors of financing companies; f. parties having family relationships up to the second degree, both horizontally and vertically:
3. from individuals who are controllers of financing companies as referred to in letter a; and/or
4. from the Board of Commissioners or Board of Directors of financing companies as referred to in letter e;
   g. Board of Commissioners or Board of Directors of business entities as referred to in letter a to letter d; h. business entities whose Board of Commissioners or Board of Directors are:
5. Board of Commissioners or Board of Directors of financing companies; or
6. Board of Commissioners or Board of Directors of business entities as referred to in letter a to letter d;
   i. business entities where:
7. Board of Commissioners or Board of Directors of financing companies as referred to in letter e act as controllers; or
8. Board of Commissioners or Board of Directors of parties as referred to in letter a to letter d act as controllers; and
   j. business entities having financial interdependence with financing companies and/or parties as referred to in letter a to letter i.

3. for pension funds, including:
   a. managers, founders, co-founders, or custodians; b. business entities where more than 25% (twenty-five percent) of shares are owned by persons or entities consisting of founders, co-founders, managers, custodians, or labor unions whose members are participants of the respective pension funds;
   c. officials or directors of entities as referred to in letter a and letter b, and their families up to the second degree according to straight or lateral lines, including sons/daughters-in-law and siblings-in-law.

Letter c
What is meant by "profit distribution" includes, among others, dividend payments and bonus payments to the Board of Directors and/or Board of Commissioners.

Letter d
Clear enough.

Letter e
Clear enough.

Letter f
Clear enough.

Letter g
What is meant by "product issuance and/or activity implementation" includes, among others, issuance of insurance products, issuance of debt securities, asset securitization, and marketing cooperation.

Letter h
Clear enough.

Letter i
Clear enough.

Letter j
Clear enough.

Letter k
Clear enough.

Letter l
Clear enough.

Letter m
Clear enough.

Letter n
Clear enough.

Letter o
Replacement of the Board of Directors and/or Board of Commissioners can be done partially or for all members of the Board of Directors and/or members of the Board of Commissioners.

Letter p
What is meant by "statutory manager" is the statutory manager as referred to in the Financial Services Authority Regulation regarding the procedure for determining statutory managers at financial service institutions.

Letter q
What is meant by "other supervisory actions" is actions given by the Financial Services Authority other than letters a to p to resolve problems at the LJKNB.

Paragraph (4)
The Financial Services Authority's assessment is based on the complexity of the problems and the business capacity of the LJKNB.

Article 8
Paragraph (1)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Examples of other actions include updating the business plan.

Paragraph (2)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Letter d
Clear enough.

Letter e
Clear enough.

Letter f
Clear enough.

Letter g
Ultimate ownership is known by the term ultimate shareholders.

Letter h
Clear enough.

Letter i
Information and other required documents include information and documents needed in the context of realizing action plans or realizing capital improvement plans to fulfill the Health Status of LJKNB.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.

Paragraph (6)
Clear enough.

Article 9
Paragraph (1)
What is meant by "LJKNB with normal supervision status assessed as having potential or significant problems" is an LJKNB that receives a Composite Rating of 3 (three) but has potential or problems that can cause the supervision status to increase to intensive.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Action plans (action plan) contain improvement steps to be implemented by the LJKNB in order to overcome significant problems faced, along with target times for problem resolution.

Paragraph (5)
Clear enough.

Article 10
Paragraph (1)
Submission of capital/funding improvement plans aims to address LJKNB capital/funding problems.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
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
Paragraph (1)
What is meant by "revoking LJKNB business license" is revoking the business license for insurance companies and financing institutions, or establishing dissolution for pension funds.

Paragraph (2)
Clear enough.

Paragraph (3)
Clear enough.

Article 18
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
What is meant by "informing" is carried out, among others, through the Financial Services Authority's website, submission to LJKNB, or associations.

Paragraph (4)
Clear enough.

Paragraph (5)
Clear enough.

Article 19
Clear enough.

Article 20
Clear enough.

Article 21
Clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6690