Strengthen Financial Security, OJK Cooperates With Korea Deposit Insurance Corporation

Chief Executive of Insurance Supervisory, Guarantee and OJK Pension Fund Ogi Prastomiyono and Chairman / KDIC President Jaehoon Yo in Seoul, South Korea, Thursday (7/12). (Doc. OJK)

JAKARTA - The Financial Services Authority (OJK) is collaborating with the Korea Deposit Insurance Corporation (KDIC) in particular to develop a Financial Safety Net framework (Financial Safety Net) in the insurance sector and develop a database for risk assessment techniques and insurance premium rates.

The scope of cooperation between OJK and KDIC includes information exchange, cross-border issues cooperation, employee exchange, human resource capacity development, and other areas of cooperation that may be agreed upon by the Parties.

This memorandum of understanding with the KDIC is valid from 7 December 2023 for a period of three years until December 2026.

Chief Executive of Insurance Supervisory, Guarantee and OJK Pension Fund Ogi Prastomiyono said that the cooperation between OJK and KDIC is in line with the OJK policy framework which is divided into two main workstreams, which aims to accelerate the completion of problematic insurance companies.

"As well as simultaneously preparing various policies aimed at encouraging the development and strengthening of the national insurance industry sector to become a healthy, strong, and able-to-grow industrial sector in a sustainable manner," he explained in an official statement, Saturday, December 9.

According to him, OJK is fully committed to supporting the implementation of the mandate of Law no. 4 of 2023 concerning the Development and Strengthening of the Financial Sector which regulates the implementation of the policy guarantee program within a period of five years after the law is promulgated.

For this reason, in the transition period until the implementation of the policy guarantee program in 2028, OJK needs to prepare everything related to strengthening the Financial Safety Net element in the insurance industry sector, including the resolution and recovery of insurance company assets.

Ogi conveyed that the presence of the policy guarantee program is expected to provide certainty in payment of benefits / insurance claims, thus protecting policyholders from the risk of operating failure of insurance companies.

This is of course very important to grow consumer confidence in the credibility of the national insurance industry sector, as well as encourage public interest in utilizing insurance products and services.