Facing the Threat of a 2023 Recession, OJK Considers Extending Policy Relaxation for the Insurance Industry

JAKARTA - The Financial Services Authority (OJK) will extend several relaxations for the insurance industry that were given during the COVID-19 pandemic. This step was taken to deal with the threat of a global recession in 2023.

"We will implement policies that are supportive of the growth of the insurance industry while still balancing the interests of consumers", said the Head of the OJK 2A Non-Bank Financial Industry Supervision Department (IKNB), Ahmad Nasrullah, in the Insurance Outlook 2023 webinar quoted by Antara, Tuesday, November 22.

During the COVID-19 pandemic, OJK provided relaxation to the insurance industry, among others, by extending the premium receivable period which was calculated as an asset from the previous two months to four months.

Thus the relaxation policy is likely to be extended to face a recession. However, for administrative relaxation, Ahmad said the relaxation would not be extended.

One of the administrative relaxations is in the form of easing the reporting time for the insurance industry. The relaxation was not extended because previously the relaxation was given because of the difficulty of mobility due to tight restrictions due to the high number of COVID-19 cases, so it is different from today.

According to him, the extension policy was decided after discussing it with various parties in the insurance industry, which still requires some relaxation of policies from the OJK.

"The relaxation that we will extend is more of a substantive nature, if it is administrative, we will no longer provide it", he said.

In addition to the insurance industry, he revealed that the relaxation policy in the financing industry in the form of restructuring will also be extended next year, especially to support the MSME sector to continue to grow.

However, the extension is only granted with a limited segmentation because the current COVID-19 pandemic is starting to subside.