New Insurance Law
A comprehensive new insurance law passed by Indonesia's
parliament could have major consequences for joint venture
companies operating in this rapidly growing insurance market. On
September 23, 2014, the Indonesian Parliament passed a new law on
insurance (New Insurance Law) which came into effect on October 23
replacing Law No. 2 of 1992 on Insurance Business (Old Insurance
Law).
The New Insurance Law sets out a comprehensive regulatory
framework for Indonesia's insurance sector. It applies to all
insurance business companies (IBCs), whether insurers, reinsurers,
brokers, agents or loss adjusters.
In addition to providing greater regulation of insurance
business, the new law also has an underlying nationalistic
sentiment, evidenced by the approach to foreign ownership. Whilst
any change to maximum foreign ownership levels (currently 80 per
cent) has been held over until an implementing Government
Regulation is issued, which will happen within
