In Indonesia, insurance contracts are primarily governed by Law No. 40 of 2014 concerning Insurance, which was enacted on October 17, 2014, and most recently amended by Law No. 1 of 2026 concerning Criminal Adjustment, dated January 2, 2026 (“Law 1/2026”) (the “Insurance Law“), and its implementing regulations. The Insurance Law and its implementing regulations are implemented in conjunction with the Indonesian Civil Code and the Indonesian Commercial Code. The insurance sector is also regulated and supervised by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or “OJK”).

An insurance contract, or insurance policy, is defined as a written deed of insurance contract or other documents equivalent to a deed of insurance contract, along with any other documents that form an inseparable part of the insurance contract. These documents contain an agreement between the insurance company or sharia insurance company and the policyholder, insured, or participant.

OJK Regulation No. 8 of 2024 concerning Insurance Products and Marketing Channels for Insurance Products, which was enacted on April 25, 2024, and became effective on October 29, 2024 (“OJK Reg. 8/2024”), provides that that an insurance policy must not contain words, phrases, or sentences that could result in different interpretations of the covered risks, the insurance company’s obligations, or the obligations of the policyholder, insured, or participant. OJK Reg. 8/2024 also provides that the wording used in an insurance policy must not create difficulties for the policyholder, insured, or participant in managing their rights.

OJK Reg. 8/2024 further regulates the minimum provisions that must be included in an insurance policy. This includes, among other things, the effective coverage period, a description of the agreed benefits and excluded risks (including the amount, period, requirements, and conditions for providing benefits), the method and timing of premium or contribution payments, any applicable grace period for such payments, and the procedures for the settlement of claims. Separate minimum content requirements apply for sharia-based insurance policies.

The Insurance Law regulates different types of insurers differently, such as conventional and sharia insurance companies. Conventional insurers include businesses like health insurance and personal accident insurance companies, as well as reinsurance for risks associated with other conventional insurance companies. Sharia insurance and sharia reinsurance businesses operate based on sharia principles. Each type of insurer is subject to different implementing regulations to which they must adhere. The applicable requirements may also differ depending on whether the insurance product is conventional or sharia-based.

This distinction is also reflected in the minimum paid-up capital requirements applicable to each type of insurer, as discussed in No. 12 below.

OJK Reg. 8/2024 regulates the marketing of insurance products and imposes restrictions on the permitted marketing channels for these products. Allowed marketing channels include:

i. direct marketing;

ii. insurance agents;

iii. bancassurance;

iv. business entities other than banks; and/or

v. special marketing workers for micro insurance products (i.e., insurance products designed to protect against financial risks faced by low-income individuals).

The marketing of insurance products through insurance agents, bancassurance arrangements, and business entities other than banks, as referred to in points (ii), (iii), and (iv) above, must be governed by a written agreement between the insurance company and the relevant marketing channel.

The Insurance Law and OJK Regulation No. 23 of 2023 concerning the Business Licensing and Institutional Arrangements of Insurance Companies, Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies, dated December 22, 2023, as amended by OJK Regulation No. 34 of 2024 concerning Human Resources Quality Development for Insurance Companies, Guarantee Institutions, Pension Funds, and Specialized Institutions in the Insurance, Guarantee, and Pension Fund Sectors, dated June 23, 2025 (“OJK Reg. 23/2023”), require companies to obtain a business license from the OJK before engaging in the insurance business in Indonesia. The processing time for license applications varies depending on the type of insurer, but the OJK usually takes up to 30 business days to approve or reject a complete and correct application.

To obtain a license from the OJK, companies must meet certain criteria, which include having a name that characterizes their activities and meeting minimum paid-up capital requirements.

Additionally, insurance companies must have a minimum guarantee fund of 20% of the required minimum paid-up capital when applying for a business license. The guarantee fund serves as the final protection to ensure the interests of policyholders, the insured, or participants in the event of the liquidation of the company.

It is to be noted that insurance companies are also required by OJK Reg. 8/2024 to obtain approval from the OJK prior to marketing new insurance products, except for insurance products which meet the following criteria:

a. An insurance product that has not previously been marketed by the insurance company and does not meet the following criteria:

(i) The insurance product has a savings or cash-value element;

(ii) The insurance product is a credit insurance product or sharia financing insurance product; and

(iii) The insurance product involves suretyship or sharia-based suretyship (collectively, the “Criteria”);

b. An insurance product resulting from the development of an insurance product previously marketed by the insurance company, which results in material changes (i.e., a change in the risk coverage, including the exclusion or limitation of covered risks, and/or a change in the cash value calculation method), and which does not satisfy the Criteria;

c. An insurance product developed from an existing product that has previously been marketed by the insurance company and satisfies the Criteria, provided that the development does not result in any material changes (i.e., change in the risk coverage, including the exclusion or limitation of covered risks, and/or a change in the cash value calculation method).

However, even insurance products that qualify for the exemption from the prior approval requirement described above must still be reported to the OJK no later than five business days after the products are first marketed.

Under the Insurance Law, only foreign legal entities that are insurance companies with a similar insurance business or holding companies with a subsidiary in a similar insurance business may own shares in Indonesian insurance companies. Further, under Government Regulation (“GR”) No. 14 of 2018 concerning Foreign Ownership in Insurance Companies, dated April 18, 2018, as last amended by Government Regulation No. 3 of 2020, dated January 20, 2020 (“GR 14/2018”), the foreign legal entity must have equity of at least five times the amount of direct investment in the Indonesian insurance company at the time of establishment and at the time of any ownership change in the insurance company. The OJK has the discretion to impose additional requirements and it will assess whether the foreign legal entity has complied with all the requirements.

Foreign citizens can only own insurance companies in Indonesia through stock exchange transactions.

Additionally, note that under GR 14/2018, foreign ownership in an insurance company is limited to 80% of the paid-up capital of the insurance company.

No, it is not possible to insure or reinsure risks in Indonesia without a licence or authorisation.

An overseas insurer, insurance broker, or market intermediary cannot open a branch in Indonesia without establishing a locally incorporated entity. The locally incorporated entity can be in the form of a limited liability company or a cooperative.

All insurance businesses in Indonesia are subject to OJK supervision and they must obtain a license from the OJK. Given that branches of overseas insurers, insurance brokers, and other types of market intermediaries also require licensing from the OJK, they are subject to the same regulatory framework as locally incorporated entities.

No. Limitations on branches do not depend on whether the branches were established by overseas insurers.

Violations of the Insurance Law by insurance business actors may be subject to administrative sanctions, such as written warnings, reduction of the company’s financial soundness level, restrictions on part or all of the company’s business activities, a prohibition on marketing insurance products for certain lines of business, revocation of business licenses, administrative fines, as well as a prohibition on being a shareholder, controller, director, commissioner, or occupying an executive position below the board of directors in an insurance company. The Insurance Law also imposes criminal sanctions on any party that conducts insurance business activities without the required business license, in the form of imprisonment for a maximum term of 15 years and/or a fine of up to IDR 5 billion.

The Indonesian insurance industry is subject to a robust regulatory and supervisory framework, with the OJK exercising close oversight of insurance business activities. Key areas of regulatory focus include good corporate governance, business conduct, and the financial health of insurance companies.

The OJK carries out supervision through various mechanisms, including requiring insurance companies to submit reports and carrying out examinations and investigations. Examinations may be conducted periodically or at any time, either by the OJK directly or by a third party appointed by the OJK to act on its behalf. These examinations can take place at the insurance company’s office, covering all or specific aspects of the company’s business operations, or at the OJK’s office, focusing exclusively on particular aspects of the insurance company’s business operations. In addition to regulatory supervision, the OJK has enforcement powers to impose administrative sanctions and additional sanctions at its discretion.

Insurers and reinsurers are required by the OJK to meet the required financial soundness criteria at all times. Pursuant to OJK Regulation No. 26 of 2025 regarding the Management of Assets and Liabilities of Insurance Companies and Reinsurance Companies, dated November 24, 2025 (“OJK Reg. 26/2025”), financial soundness is assessed based on (i) solvency level; (ii) technical reserves or liabilities related to insurance contracts; (iii) sufficiency of investments; (iv) equity; (v) guarantee fund; (vi) permitted assets; (vii) insurance assets related to investment; and (viii) other provisions in connection with financial soundness.

OJK Reg. 26/2025 further regulates that insurance and reinsurance companies must maintain a minimum solvency level of 100% of the Minimum Risk-Based Capital (MMBR). For context, MMBR is the amount of funds required to anticipate the risk of losses that may arise as a result of deviations in the management of assets and liabilities.

Insurance and reinsurance companies also are required by the OJK to establish an internal solvency target of at least 120% of MMBR, which must be met at all times, and are prohibited from paying dividends or providing compensation that may result in failure to meet the required internal solvency target.

Failure to maintain financial soundness, including meeting the required solvency level, is subject to administrative sanctions by the OJK in the form of:

i. written warnings;

ii. restrictions on business activities, either entirely or in part;

iii. prohibition on marketing insurance products for certain business lines;

iv. decrease of the financial soundness level of the company; and/or

v. prohibition on the company or its shareholders, controllers, directors, or commissioners, or their equivalents, in the company becoming shareholders, controllers, directors, or commissioners, or their equivalent in a cooperative or joint venture legal entity or holding an executive position under the board of directors or its equivalent in a cooperative or in an insurance company.

Additionally, the OJK may impose additional sanctions in the form of the re-assessment of the capability and suitability of the key parties of the company (i.e., controllers, directors, commissioners, actuary, etc.).

Under OJK Reg. 23/2023, the OJK stipulates the following minimum paid-up capital requirements upon incorporation, depending on the activities of the company:

• Insurance companies: IDR 1 trillion;
• Reinsurance companies: IDR 2 trillion;
• Sharia insurance companies: IDR 500 billion;
• Sharia reinsurance companies: IDR 1 trillion.

The paid-up capital must be fully paid and in cash in the form of a time deposit and/or a checking account at a public bank, sharia public bank, and/or sharia business unit of a public bank in Indonesia. For sharia-based insurance and reinsurance companies, the funds must be held in a sharia public bank and/or sharia business unit of a public bank in Indonesia.

Yes. Insurance companies that plan to terminate their business activities must first report their plan to the OJK. They will be required first to settle all their obligations, and only once they have settled all their obligations will the OJK revoke the business license of the insurance company.

In the event of the bankruptcy or liquidation of an insurance or reinsurance company in Indonesia, policyholders and beneficiaries are afforded priority over other creditors in the distribution of the company’s assets. For sharia-based insurers and reinsurers, tabarru’ funds, mudharabah funds, and participant investment funds may not be used to satisfy obligations to parties other than policyholders, participants, and other beneficiaries.

The OJK imposes specific requirements on Financial Conglomerates (i.e., groups of companies under common ownership/control that engage in two or more types of financial services, and with total combined assets exceeding certain thresholds). Under OJK Regulation No. 30 of 2024 concerning Financial Conglomerate Holding Companies, dated December 23, 2024 (“OJK Reg. 30/2024”, a Financial Conglomerate is required to establish or designate a Financial Holding Company whose primary function is to control, consolidate, and be responsible for the activities of the Financial Conglomerate.

Under OJK Reg. 30/2024, controlling shareholders and/or ultimate shareholders are required to establish a Financial Conglomerate Holding Company (Perusahaan Induk Konglomerasi Keuangan or “PIKK”) if the relevant financial conglomerate meets either of the following criteria: (a) the aggregate assets of the financial services institutions (FSIs) within the financial conglomerate amount to at least IDR 100 trillion and the conglomerate includes at least two FSIs operating in two different financial sectors; or (b) the aggregate assets of the FSIs within the conglomerate are at least IDR 20 trillion  but less than IDR 100 trillion, and the conglomerate includes at least three FSIs in three different financial sectors.

Yes, prospective main parties of insurance companies must obtain OJK approval before performing any actions, tasks, or functions for the insurance company. Main parties include controlling shareholders, members of the board of directors, board of commissioners and sharia supervisory board, internal auditors, and company actuaries. To obtain OJK approval, prospective main parties must pass a fit and proper test that assesses their integrity, financial eligibility, reputation, and competency.

Pursuant to OJK Regulation No. 27/POJK.03/2016 concerning Fit and Proper Tests for Key Persons in Financial Service Institutions, dated July 22, 2016, as partially revoked by OJK Regulation No. 35 of 2024 concerning the Licensing and Institutional Arrangements of Pension Funds, dated March 23, 2025 (“OJK Reg. 27/2016”), non-compliance with fit and proper test requirements is subject to administrative sanctions. These administrative sanctions include (i) written warnings; (ii) downgrade of the company’s financial soundness level; (iii) cancellation of fit and proper results; (iv) restrictions on business activities; (v) management replacement; (vi) inclusion of management on the list of parties prohibited from becoming main parties in an insurance company; (vii) revocation of the company’s approvals, registrations, and certifications; and/or (viii) revocation of business license.

In Indonesia, if senior managers of insurance companies are found to be negligent in carrying out their duties or to have intentionally committed violations, they can be held personally liable for regulatory breaches. The severity of the penalties depends on the nature and extent of the breach.

There is no minimum presence requirement to undertake insurance activities in Indonesia. However, OJK Reg. 23/2023 imposes a minimum issued and paid-up capital requirement for newly incorporated insurance and reinsurance companies.  Specifically, insurance companies must have a minimum issued and paid-up capital of IDR 1 trillion, while insurance and reinsurance companies must have a minimum issued and paid-up capital of IDR 2 trillion. Sharia insurance companies are required to have a minimum issued and paid-up capital of IDR 500 billion, while the minimum issued and paid-up capital for sharia reinsurance companies is IDR 1 trillion.

OJK Reg. 23/2023 also stipulates minimum equity requirements for insurance and reinsurance companies, which must be satisfied in the following stages:

• By 31 December 2026:
  • IDR 250 billion for insurance companies;
  • IDR 500 billion for reinsurance companies;
  • IDR 100 billion for sharia insurance companies; and
  • IDR 200 billion for sharia reinsurance companies.
• By 31 December 2028:
• Insurance companies that conduct only simple insurance business activities:
  • IDR 500 billion for insurance companies;
  • IDR 1 trillion for reinsurance companies;
  • IDR 200 billion for sharia insurance companies; and
  • IDR 400 billion for sharia reinsurance companies.
• Insurance companies permitted to conduct the full range of insurance business activities:
  • IDR 1 trillion for insurance companies;
  • IDR 2 trillion for reinsurance companies;
  • IDR 500 billion for sharia insurance companies; and
  • IDR 1 trillion for sharia reinsurance companies.

While OJK Reg. 23/2023 does not further define the scope of “simple insurance activities,” and no implementing regulation have been issued on this matter, the OJK has circulated a draft circular letter identifying activities that are not included within the definition of “simple insurance activities.” These include unit-link insurance products, digital insurance services, fee-based activities, and establishment offices other than the company’s main office. As of the date of this publication, however, the OJK has not indicated when the circular letter will be formally issued, and the contents of the draft remain subject to change.

Insurance companies in Indonesia may collaborate with third parties to obtain business or outsource certain business operations. The outsourcing of business operations may be carried out through service providers under outsourcing agreements or manpower service provision agreements.

Under OJK Reg. 69/2016, such service providers must satisfy certain requirements, including being an Indonesian legal entity with a valid business license, a sound financial condition and reputation, adequate resources to perform the outsourced functions, and no conflict of interest. If a foreign legal entity is involved, the insurance company must report the outsourcing plan to the OJK at least 14 days before the agreement is signed, and the outsourcing agreement must regulate the type, value, and duration of the outsourced business management functions.

Any outsourcing cooperation must be carried out under direct orders from the insurance company, must not hinder the insurance company’s activities, and must be documented in a written agreement. Insurance companies are also required to establish and implement selection and accountability standards for prospective partners to ensure that such partners satisfy the applicable criteria and maintain the insurance company’s operational integrity and standards. In addition, insurance companies must ensure that the cooperation arrangement is carried out in accordance with the written agreement and the provisions of laws and regulations.

Notwithstanding the foregoing, insurance companies are prohibited from outsourcing certain core functions, namely underwriting approval, actuarial functions, and claims approval activities.

Additionally, the most recent amendment to OJK Reg. 69/2016 – OJK Regulation No. 36 of 2024 regarding the Amendment of OJK Reg. 69/2016 – introduces provisions specifically addressing the implementation of digital insurance services. In particular, any cooperation with third  parties for the implementation of certain functions in digital insurance service operations may only be in the form of (i) collaboration with payment service providers for premium or contribution payments, (ii) collaboration with IT providers, and/or (iii) collaboration with other parties to improve  operational and/or service quality. Insurance companies are prohibited from outsourcing digital insurance services to third parties or assigning the processing of data relating to prospective policyholders, insureds, or participants.

OJK Reg. 26/2025 imposes restrictions on the types of assets in which insurers or reinsurers may invest, as well as capital requirements that may affect their investment holdings. There are two categories of assets: permitted assets for investment and permitted assets for non-investment.

Permitted assets are assets that are considered in calculating an insurance company’s solvency level. Insurance companies are required to exercise prudence in making investment decisions and placing their investments.

Permitted assets for investment include time deposits, bank deposits, government securities, listed companies’ stocks, corporate bonds, real estate for investment, gold, and direct participation in non-listed companies, with the inclusion of investments using sharia principles. Permitted assets for non-investment include cash and cash equivalents, direct premium receivables, reinsurance premium receivables, reinsurance assets, co-insurance claim receivables, reinsurance claim receivables, investment receivables, investment income receivables, buildings with strata title or land with buildings for self-use, deferred acquisition costs, and/or right to use assets.

Restrictions on permitted assets for investment include a cap on the maximum percentage of investment in various types of assets such as bank deposits, stocks, bonds, and real estate, with certain exemptions and exceptions for each type of investment.

Additionally, the placement of permitted assets as investments in affiliated parties is limited to a maximum of 10% of the insurance company’s equity, while investments in one or multiple non-affiliated parties are limited to a maximum of 25% of the insurance company’s total investment.

Yes. In Indonesia, OJK Reg. 69/2016 requires every insurance company to have reinsurance support through an automatic reinsurance or sharia reinsurance agreement. These agreements must be in writing and cannot guarantee fixed profits for the reinsurer. The term “guaranteeing fixed profits” refers to any clause that suggests the reinsurer is assured of profits from the agreement.

These agreements must contain a statement specifying that, in the event of liquidation of either the insurance company or the reinsurance company, the rights and obligations arising from the reinsurance transactions will remain binding until one or both companies are fully liquidated. There do not appear to be any specific restrictions on the level or type of reinsurance utilized.

In Indonesia, insurance companies are restricted to specific channels for marketing their insurance products. These channels include direct marketing, insurance agents, bancassurance arrangements, and non-bank business entities. Additionally, microinsurance products may be marketed through the aforementioned channels as well as through specially designated marketing personnel.

When insurance products are marketed through any of these channels, insurance companies must ensure that the marketing party provides accurate, clear, honest, and non-misleading information about the insurance products to potential policyholders, insureds, or participants before they decide to purchase the insurance products.

Insurance products may generally be marketed through remote communications channels.  However, in the case of investment-linked insurance products (unit-linked products), marketing activities must include a face-to-face meeting with the prospective policyholder, either in person or via video conference. Such marketing activities, as well as the prospective policyholder’s statements, must be documented through video and/or audio recordings. Additional requirements for the marketing of unit-link insurance products are set out in OJK Circular Letter No. 5 of 2022, dated March 14, 2022, regarding Investment-Linked Insurance Products, as amended.

Insurance companies are responsible for all actions taken by the marketing party in connection with the insurance products being marketed.

Generally, insurance products may not be actively marketed in Indonesia by parties that do not hold the necessary licenses required under Indonesian law. Insurance business activities in Indonesia must be conducted through an insurance company established in Indonesia and licensed by the OJK. However, certain limited exceptions apply. For example, overseas travel insurance may be offered by a foreign insurer that has entered into a cooperation agreement with a licensed Indonesian insurance company.

Notwithstanding the above, a foreign insurer may provide insurance coverage to Indonesian clients/policyholders on a cross-border basis without obtaining an Indonesian insurance business license, provided that the arrangement is conducted strictly on a reverse solicitation basis. In other words, the Indonesian clients/policyholders must approach the foreign insurer on their own initiative, and the foreign insurer must not engage in any active marketing, solicitation, or other business activities within Indonesia.

To substantiate the reverse solicitation nature of the arrangement, the foreign insurer should maintain adequate records of its communications with Indonesian clients/policyholders, demonstrating that the initial approach originated from the clients/policyholders and was not the result of any solicitation by the foreign insurer.

In implementing this approach, the foreign insurer should adopt a conservative, low-profile approach and avoid activities that could be construed as conducting insurance business in Indonesia. Such prohibited activities may include mass marketing campaigns, cold calling, organizing seminars or promotional events in Indonesia, or negotiating, finalizing, or executing insurance policies while physically present in Indonesia.

Yes. Insurers in Indonesia are subject to additional requirements concerning consumers, as the OJK has issued comprehensive consumer protection regulations, including OJK Regulation 22 of 2023 concerning Consumer and Public Protection in the Financial Services Sector, dated December 22, 2023 (“OJK Reg. 22/2023”), which is applicable to financial service providers, including insurance and reinsurance companies. Insurers must adhere to specific requirements related to promoting insurance products, establishing consumer protection units, and data storage. Although no pricing restrictions such as caps on premiums or other pricing-related restrictions are imposed directly on insurers, the OJK does require financial service providers, including insurers, to prepare pricing guidelines. These guidelines should address various aspects such as expenses incurred in producing products and/or services, expected profit, offering prices to consumers, and any penalty fees or sanction-related costs.

When promoting or advertising, insurers in Indonesia must, among other things, (i) provide accurate, truthful, clear, easily accessible, and non-misleading information regarding the insurance products; (ii) not provide information and/or documents that do not use the Indonesian language (which may be used in conjunction with another language as necessary); and (iii) provide a summary of its products in writing and set out the benefits, risks, main features, fees, terms and conditions, and procedures under which the products are offered during the marketing and before the consumer enters into an agreement to purchase such products. The OJK supervises the marketing process and can require the withdrawal of promotional materials, which insurers must comply with within seven days upon receiving the request. Promotional materials, such as brochures and leaflets, must contain clear and easily understandable information regarding benefits, claim submission processes, exclusions, and applicable terms and conditions. Other forms of promotional content must, at a minimum, clearly disclose the product benefits and relevant terms and conditions.

Insurers are also required to establish and implement consumer complaint-handling procedures and provide 24-hour complaint services to receive, process, and settle consumer complaints. Written complaints must be addressed within 10 business days of receipt of complete supporting information, which period may be extended by an additional 10 business days in certain circumstances. Insurers are also required to submit consumer complaint service reports to the OJK every semester.

Yes, there is a legal and regulatory resolution regime for insurers in Indonesia. This regime is primarily governed by the Indonesia Insurance Law and the Insolvency Law. Under the Indonesia Insurance Law, only the OJK has the authority to initiate bankruptcy or debt payment postponement proceedings against insurance companies. The procedures and requirements for initiating such proceedings must comply with the provisions of relevant laws and regulations.

Creditors may submit a request to the OJK to initiate bankruptcy or debt payment postponement proceedings in Commercial Court, and the OJK must approve or reject the request within 30 days of receiving it in complete form.

Indonesian courts are generally equipped to handle complex commercial claims.  However, the level of adeptness in handling such claims may vary depending on factors such as the experience and expertise of the judges, the availability of resources, and the complexity of the specific case.

Indonesia has established a specialized court system for commercial matters, called the Commercial Court, which has jurisdiction over decisions pertaining to bankruptcy cases and the postponement of debt payment obligations (PKPU). The Commercial Court also has authority to address other commercial disputes, including those involving intellectual property rights and disputes arising from bank liquidation proceedings.

Alternative dispute resolution is well-established in Indonesia, with mechanisms such as arbitration and mediation being increasingly utilized for their efficiency and flexibility. The Indonesian National Board of Arbitration (BANI) is the country’s most prominent arbitration institution and administers both domestic and international arbitration proceedings under its own procedural rules. Furthermore, Indonesia facilitates the enforcement of foreign arbitral awards within its borders.

Mediation is also recognized as an effective means of dispute resolution. In many cases, Indonesian courts encourage parties to explore mediation as a means of settling disputes before resorting to litigation.

Specific for financial services business actors, there is also a Financial Services Sector Alternative Dispute Resolution Agency (Lembaga Alternatif Penyelesaian Sengketa Sektor Jasa Keuangan or “LAPS SJK”), which is the official institution approved by the OJK to resolve disputes between consumers and financial services business actors outside of court. LAPS SJK offers three dispute resolution mechanisms: (i) mediation, (ii) arbitration, and (iii) the issuance of binding legal opinions.

In Indonesia, an insurer may transfer part of its insurance portfolio only with the prior approval of the OJK. The transfer must not infringe on the rights of policyholders and must be made to another insurer operating in the same line of business, applying the same business principles, and offering a similar type of insurance product or reinsurance agreement.

The OJK will issue its approval or rejection of the transfer request within 30 business days from the receipt of complete application documents, provided it does not consider a direct examination necessary. If the OJK decides to conduct a direct examination, it must notify the applicant within 14 business days of receiving the application documents. In such case, the OJK will issue its approval or rejection of the transfer request within 14 business days after the issuance of the final direct examination report.

Once approved, the transferring insurer must (i) notify all relevant parties, including policyholders, insureds, participants, or ceding company, in writing, and (ii) announce the transfer on its website and in national daily newspapers, at the latest within 10 business days from the OJK’s approval. This notification and public announcement must specify the period within which insured parties may object to the proposed transfer, the consequences of such objection, and the mechanism for settling the rights of those who reject the transfer.

Policyholder, insureds, participants, and ceding companies must be given the opportunity to object to the transfer of their insurance coverage within one month from the date of the announcement. If an objection is made, the relevant insurance coverage will be terminated and the insurer must return the rights of the policyholders, insureds, participants, or ceding companies in accordance with the applicable insurance policy or reinsurance agreement. The portfolio transfer and/or return of the relevant parties’ rights must be settled within three months from the date of the OJK’s approval, and the insurer must report the implementation of the transfer to the OJK within 30 business days after its completion.

Regulatory compliance is a significant challenge for new entrants in Indonesia’s insurance sector, which is heavily regulated by the OJK. Obtaining a license can be a complex and time-consuming process, requiring adherence to numerous regulations and guidelines. In addition, the sector is subject to foreign share restrictions, which can restrict the entry of foreign players, as well as substantial minimum issued and paid-up capital and equity requirements, which can restrict or discourage the entry of new market participants in general.

However, the OJK, as the primary regulator, is generally supportive of new market participants and aims to encourage competition and innovation in the insurance sector. The OJK is open to consultation and can provide guidance to new entrants navigating the regulatory landscape.

Digital innovation in Indonesia has led to the emergence of insurtech, which has disrupted the traditional insurance landscape by offering innovative, digital-first solutions to consumers. However, in general, existing players in the market have been quick to adapt to digital innovation to enhance their operations and customer experience. The adoption of digital technologies has allowed traditional insurance companies to streamline various processes, such as sales, claims processing, and customer support.

The OJK also permits insurance companies to conduct digital insurance business activities, subject to prior OJK approval.  Following the issuance of such approval, the insurance company must apply for registration as an electronic system provider with the relevant government authority, i.e., the Ministry of Communication and Digital Affairs, within 30 days. Insurance companies may only implement digital insurance services after they are registered as an electronic system provider.

As explained above, OJK acknowledges the emergence of digital-based insurance activities and has issued additional regulations to address this development. As a result, companies engaging in digital-based insurance activities must obtain supplementary approval from OJK. This added layer of regulation ensures that digital insurance providers adhere to the same standards as traditional insurers, fostering a fair and competitive market landscape. OJK’s proactive approach to overseeing digital insurance activities demonstrates its commitment to maintaining a well-regulated environment that supports both traditional and innovative insurance business models.

Further, an insurance company intending to engage in digital-based insurance activities is required to register as an electronic system provider with the Ministry of Communication and Digital Affairs and must use an electronic system that is owned and controlled by the insurance company in implementing digital insurance services. OJK Reg. 69/2016 stipulates additional requirements for insurance companies in this regard, including, among others, the obligation to employ qualified IT personnel with at least three years of experience and expertise in the IT sector, and the obligation to establish a dedicated unit or function for digital insurance services operations.

In Indonesia, insurers are required to utilize a data management system that produces accurate and accountable information for decision-making. Additionally, for the purpose of law enforcement and the enforcement of national sovereignty over citizens’ data, insurers must place data in data centers and disaster recovery centers within Indonesian territory, unless the insurers have received OJK approval to utilize data centers and disaster recovery centers overseas.

The Insurance Law does not specifically regulate the requirements or restrictions relating to sharing customer data overseas or on a cross-border basis. However, insurers, in their capacity as personal data controllers, are subject to personal data transfer provisions under Law No. 27 of 2022 concerning Personal Data Protection, dated October 17, 2022, as last amended by Law 1/2026 (“Indonesia Data Protection Law”). When transferring personal data, a personal data controller must ensure that the country where the recipient personal data controller and/or personal data processor is located has personal data protection standards that are equivalent to or higher than those outlined in the Indonesia Data Protection Law. If this condition is not met, insurers (personal data controllers) must ensure adequate and binding personal data protection. If neither of these conditions is met, the personal data controller must obtain the consent of the insured (personal data subject) before the transfer is carried out.

The OJK requires all financial service institutions, including insurers, to implement sustainable finance in their business activities, pursuant to OJK Regulation No. 51/POJK.03/2017 concerning Sustainable Finance Implementation for Financial Service Institutions, Issuers, and Public Companies, dated July 27, 2017 (“OJK Reg. 51/2017”). This involves using the following principles: a) responsible investment, b) sustainable business strategies and practices, c) social and environmental risk management, d) governance, e) informative communication, f) inclusivity, g) development of priority leading sectors, and h) coordination and collaboration. By adhering to these principles, these entities aim to promote sustainable finance in their operations, contributing to long-term economic growth and development. Insurance companies are also required to submit a sustainability report to the OJK in accordance with OJK Reg. 51/2017. The sustainability report forms part of the mandatory regulatory reporting obligations applicable to insurance companies.

In addition, OJK Reg. 26/2025 indirectly addresses climate-related and catastrophe risks by requiring insurance companies to establish catastrophe reserves. These reserves are intended to mitigate the risk of losses arising from natural events or pure accidents that could result in significant losses for the insurance company.

There is no specific regulatory framework related to diversity and inclusion specifically for the insurance industry in Indonesia. However, companies in the country are generally required to adhere to the principles of non-discrimination and equal opportunity in the workplace, as stated in various laws and regulations, such as the Manpower Law and the Elimination of Racial and Ethnic Discrimination Law.

Recent regulatory developments suggest continued growth in Indonesia’s digital insurance and life insurance sectors. In particular, the OJK has strengthened the regulatory framework for digital insurance services through OJK Regulation No. 36 of 2024, which amends OJK Reg. 69/2016, and for the health insurance through OJK Regulation No. 36 of 2025 concerning the Strengthening of the Health Insurance Ecosystem, dated March 22, 2026. Couple with increasing public awareness of the importance of insurance protection, particularly health insurance, these developments are expected to support further market growth over the coming years.

As the same time, further consolidation within the insurance industry is anticipated as insurers seek to comply with the phased minimum equity requirements (first phase by the end of 2026, and second phase by the end of 2028). OJK appears to be supporting this consolidation with OJK Reg. 23/2023, which expressly allows insurance companies to consolidate to strengthen the structure, resiliency, and competitiveness of the insurance industry, achieve greater economies scale, and/or face the challenges and demands of technology-based insurance products and services innovation. Public reports indicated that several state-owned insurance companies and their subsidiaries are expected to undergo consolidation in the near future. As a result, the market is likely to become more concentrated, with fewer but larger insurance and reinsurance companies.

In addition, spin-offs of sharia business units are expected to accelerate ahead of the  December 31, 2026, deadline for the separation of sharia units from conventional insurance and reinsurance companies.