Starting To Apply In 2028, LPS Says It's Ready To Run Policy Guarantee Program

Chairman of LPS Purbaya (Photo: Antara)

JAKARTA - The Deposit Insurance Corporation (LPS) is increasingly ready to carry out its new mandate in accordance with Law No. 4 of 2023, namely as the organizer of the Policy Guarantee Program (PPP) which will take effect on January 12, 2028.

"LPS continues to coordinate with the Ministry of Finance in order to prepare and complete the RPP for the Policy Guarantee Program mandated by the P2SK Law. What is certain is that when the implementation of PPP is implemented, we are ready," said Chairman of the LPS Board of Commissioners Purbaya Yudhi Sadive in a statement to the media, Thursday, March 21.

It is said that Purbaya LPS has also compiled a draft of the main rules of implementation mandated by the P2SK Law, which includes several points of regulation in Government Regulations (PP), among others related to initial contributions to participation as well as periodic contributions to guarantees and certain business lines that are objects of guarantee and some of the substance of the arrangements in the LPS Regulation (PLPS), among others, regarding criteria for certain level requirements and further provisions regarding the implementation of liquidation of insurance companies. Meanwhile, the implementation regulations based on the P2SK Law must be completed 2 years from the time the Law is enacted or no later than January 2, 2025.

"In the draft preparation and RPLPS mandated by the P2SK Law, LPS also continues to discuss and obtain input from OJK, insurance companies, insurance company associations and from various experts and experts in the insurance sector," added Purbaya.

In addition to these various developments, LPS together with the Ministry of Finance and the OJK in 2024 are also carrying out, the preparation of implementation technical regulations such as the Board of Commissioners Regulation (PDK) and Member Regulations of the Board of Commissioners (PADK) and also the most important thing is the preparation for the fulfillment of human resources and competencies to support the implementation of PPP and provide briefing to employees with education and training regarding insurance.

Then, LPS has also made organizational changes, including adding the position of one of the Board of Commissioners in charge of PPP and filling out human resources for organizations related to PPP, namely by appointing one Executive Director and several officials and staff to coordinate preparations for the implementation of PPP internally LPS and also with parties outside LPS.

Previously, in October 2023, LPS had also officially become a full member of the International Forum of Insurance Guarantee Scheme (IFIGS), an international organization consisting of 25 insurance guarantors from 22 countries.

By becoming a member of IFIGS, LPS can more easily obtain information and get a sharing experience from the implementation of insurance guarantees in other countries that are members of IFIGS.

"In order to prepare this Policy Guarantee Program, LPS has also collaborated with the Korea Deposit Insurance Corporation (KDIC), among others, with the assignment of LPS employees at KDIC and vice versa, there is 1 KDIC employee assigned to LPS in full time since the end of 2023, besides that LPS will also collaborate with PIDM or the Malaysian deposit guarantor institution and the plan is to make an employee exchange as well," concluded Purbaya.