AAUI Asks For OJK Considerations On The Relaxation Of Fulfillment Of Minimum Equity

JAKARTA - The Indonesian General Insurance Association (AUI) has asked the Financial Services Authority (OJK) to consider relaxation related to the fulfillment of a minimum equity of IDR 250 billion at the end of 2026.

"Officially, we ask for the consideration of the OJK regulator for relaxation. We are not cryy but because of economic conditions like this," said AAUI General Chair Budi Herawan quoting Antara.

According to him, the economic condition which is considered not optimal for the insurance industry is partly due to the slowdown in premium income based on AAUI data at a meter of 1-2025, the realization reached IDR 58.5 trillion or grew 5.8 percent.

The realization slowed down compared to the same period in 2024 which grew 18.4 percent.

The fulfillment of minimum equity is contained in OJK Regulation Number 23 of 2023 concerning Business Licensing and Insurance Company Institutions.

The regulation requires a minimum equity of IDR 250 billion for conventional and sharia general insurance of IDR 100 billion in the first phase no later than December 31, 2026.

"We propose to implement it in 2026, we ask for time for an extension," he said.

Although he admits that the regulation has been contained since 2023, he is trying to voice the aspirations of his members, especially companies that are projected to have not met these provisions on the sidelines of the annual forum for the general insurance and reinsurance industry in Indonesia.

AAUI noted that of the 71 general insurance companies, it is estimated that 52 companies have met a minimum equity of IDR 250 billion by the end of 2026.

While the remaining 19 general insurance companies are estimated to have not been able to meet the minimum core capital.

Meanwhile, from the eight reinsurance companies until the end of 2026 with a minimum equity of IDR 500 billion will be fulfilled by seven companies and one reinsurance company is estimated to still not be able to fulfill it.

The Chief Executive of the Insurance, Guarantee and Pension Fund Supervisory (PPDP) of the Financial Services Authority (OJK) Ogi Prastomiyono said the purpose of the regulation was to strengthen the capacity of the insurance industry which was considered still small so that it did not optimally absorb the risk in the future.

There is also a mechanism that is possible to provide, he said, is by relaxation, with the category that insurance companies that cannot meet the minimum equity have violated POJK 23/2023.

Kelonggarannya adalah, lanjut dia, perusahaan asuransi yang melanggar tersebut wajib membuat rencana aksi untuk memenuhi ekuitas minimum dalam waktu maksimal satu tahun.

"That's called relaxation given by cases per case. He has violated the category, but is allowed to make an action plan for one year," said Ogi.