Strengthening Supervision, OJK Issues Insurance Governance Rules Forming Joint Business

Illustration of OJK (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) continues to strengthen the management and supervision of the insurance industry. This is evidenced by issuing Financial Services Authority Regulation (POJK) Number 7 of 2023 concerning Governance and Institution of Joint Business Entrepreneurship Companies. "This rule aims to ensure that joint business-shaped insurance companies can grow to be healthier, more reliable, trustworthy, and competitive," said Head of the Department of Literacy, Financial Inclusion and Communications of OJK Aman Santosa quoting Antara.POJK 7 of 2023 stipulates that Joint Business Entity Companies must implement good corporate governance, including investment management, risk management, and internal control in carrying out business activities. Insurance companies are also required to develop internal control systems and internal procedures regarding the implementation of good corporate governance. "Insurement companies must also calculate the risks and benefits that will be obtained by policyholders or be responsible for any determination and management of premiums from policyholders to ensure that there is no failure of joint business-shaped insurance companies in fulfilling obligations to policyholders or be responsible," explained Safe. This provision also regulates the obligations of Companies Forum Company Forming Joint Businesses to protect the interests of policyholders, be responsible, and/or parties entitled to obtain these benefits in order to receive their rights according to insurance policies. For this reason, Joint Business Enturing Companies must also fulfill the appropriate obligations promised by policyholders, be fulfilled, and or those who are entitled to obtain benefits. Insurance companies are also required to provide good services, disclose relevant information, and respect the rights of stakeholders that include policyholders, benegligible, the party entitled to obtain benefits, employees, creditors, goods and services providers, and or the government. "Joint business-shaped insurance companies are also obliged to carry out the obligations that arise based on the provisions of laws and regulations and or agreements made with employees, policyholders, are borne, and or other stakeholders," he added.

In addition, considering the characteristics of a joint business insurance company whose policyholders are members, this regulation also regulates the mechanism for utilizing profits that can be shared with members including the burden of losses to members. Then, in the event that the insurance company in the form of a joint business has accumulated losses in the financial report, the company is required to complete the accumulation of losses by charging members losses and formulating a mechanism for burdening members of losses to accumulated losses which is then submitted to the General Meeting of Members (RUA) to get a determination. "If in the RUA cannot determine the charge of the accumulated losses in question, the OJK can follow up on surveillance actions in accordance with the provisions of the legislation," said Aman.