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These are 2 new POJKs that regulate investment limits for insurance companies in their affiliates.
The Financial Services Authority (OJK) issued two of the latest OJK Regulations (POJK) relating to insurance and reinsurance companies: POJK Number 5 of 2023 and POJK Number 6 of 2023. The aim is to encourage improvement in the financial health of insurance and reinsurance companies, including those based in Sharia. The two regulations are the second amendment to POJK Number 71 of 2016 and POJK Number 72 of 2016.
According to OJK Literacy, Financial Inclusion, and Communications Department Head Aman Santosa, the issuance of the two regulations was carried out to adjust the maximum investment limit for related parties for assets other than Investment-Linked Insurance Products (non-PAYDI), which are considered too large, so they have not been able to prevent the risk of over-concentration. In addition, for PAYDI assets, there is no maximum investment limit provision for related and non-related parties, so policyholders have the potential to face high concentration risks, and there is management of PAYDI assets that are misused only for the benefit of group/company affiliates.
In addition, POJK adjustments are also made to harmonize arrangements with the banking sector regarding related and non-related parties so that a more appropriate risk assessment is obtained in an integrated/conglomerate manner. Adjustments to the provisions in POJK 5/2023 and POJK 6/2023 are intended to maintain the company’s financial health and optimize investment performance, including in PAYDI/unit link.
In applying the principle of prudent investment, companies must maintain the level of risk exposure to related parties as well as one party and one group of investment recipients who are not related parties. The risk exposure must be adjusted to the company’s capital capacity to bear the risk. Specifically for PAYDI, the Company must maintain the level of risk exposure by considering the potential impact on PAYDI’s investment performance.
Asuransi Bintang (ASBI) Records a 12% Profit Decrease in the First Quarter of 2023
PT Asuransi Bintang Tbk (ASBI) reported a decrease in profit in the first quarter of 2023. In its financial statements, ASBI recorded a profit of IDR 1.624 billion, a decrease of 12% year on year (YoY) compared to the same period in the previous year of IDR 1.840 billion. ASBI President Director, HSM Widodo, explained that the decline was due to an earlier timeline for payment of fees.
Despite the decline in profit, ASBI recorded an increase in underwriting results by 5% YoY to IDR 31.350 billion and net operating income, which increased by 4.7% YoY to IDR 32.736 billion in the first quarter of 2023. However, ASBI’s net premium income decreased by 15% to Rp 45.048 billion compared to the same period in the previous year of, Rp 53.009 billion.
ASBI’s net claims expense decreased by 43% to IDR 10.642 billion in the first quarter of 2023 compared to the same period in the previous year of, IDR 18.667 billion. Meanwhile, ASBI’s operating expenses increased by 5.67% YoY to IDR 31.366 billion from IDR 29.682 billion in the first quarter of 2022. The company’s assets also decreased by 2.5% to IDR 965.153 billion in March 2023 compared to December 2022 of IDR 989.810 billion.
Widodo stated that the company’s performance during the first quarter of 2023 aligned with ASBI’s strategy of increasing margins to prepare for a parallel run contractual service margin (PSAK 74) in 2024. The company is also trying to develop new markets through unit-link products and the development of distribution channels. Despite experiencing a decline in profit in the first quarter of 2023, ASBI is still targeting good performance in 2023.
Jasa Advisindo Prosperous Insurance Broker Regardless of the Sanctions, OJK Revokes PKU
The Financial Services Authority (OJK) lifted the business activity limitation (PKU) sanction on PT Jasa Advisindo Sejahtera, an insurance brokerage company in Jakarta. This decision was taken on April 27, 2023, after the company complied with all recommendations from the inspection results.
The revocation of the sanction is by the provisions of Article 11 Paragraph (1) and Paragraph (2) POJK Number 11/POJK.05/2014 concerning Direct Examination of Non-Bank Financial Services Institutions as amended several times, most recently by POJK Number 30/POJK.05/ 2020 concerning the Second Amendment to POJK Number 11/POJK.05/2014 concerning Direct Examination of Non-Bank Financial Services Institutions. With the lifting the sanction, PT Jasa Advisindo Sejahtera is again allowed to perform insurance brokerage services.
On March 20, 2023, the company received a PKU sanction from the OJK because it had not met the minimum equity requirements. However, after carrying out all the recommendations from the inspection results, the OJK revoked the sanctions. OJK Deputy Commissioner for Insurance and Pension Fund Supervision Moch. Ihsanuddin announced on May 3, 2023.
The car caught fire because it brought perfume lighters, and the insurance didn’t want to be responsible.
On social media, a video circulated showing a car on fire. The vehicle was reportedly engulfed in flames because it carried perfume matches when the weather was hot. Does the insurance company want to cover the loss?
According to Astra Insurance’s Head of Communications and Customer Service Management (Garda Oto), Laurentius Iwan Pranoto, if the cause of the fire was due to chemicals in the vehicle, then insurance cannot cover losses.
This is by the Indonesian Motor Vehicle Standards Policy Article 3, paragraph 2 concerning exceptions. It is stated in the policy, and the coverage does not cover loss and/or damage to Motorized Vehicles or costs directly or indirectly caused by, as a result of, incurred by goods and/or animals that are inside, loaded on, stacked on, unloaded from or transported by Motorized Vehicles, as well as chemicals, water or other liquids, which are in Motorized Vehicles unless it is the result of a risk guaranteed by the Policy.
For safety, motorists are not advised to leave objects that have the potential to trigger a fire. Director of Training Safety Defensive Consultant (SDCI) Sony Susmana confirmed that several items should not be left in the vehicle cabin. Because when the weather is hot, these objects can trigger a fire.
“Don’t leave items such as matches, electronics, perfume, cans of carbonated drinks, fuel, chemical liquids, and others. Because these items can trigger a fire,” said Sony Susmana to detikOto, Friday (28/4).
According to Sony, these items may be left in the vehicle. Provided the parking lot is roofed and not exposed to direct sunlight. In addition, the vehicle glass is left slightly open.
“It needs to be understood. Currently, Asia is being hit by excessive solar heat. So it is recommended that the cabin temperature be maintained. Unfortunately, when parking, these conditions cannot be anticipated,” he said.
Cars Dragged In Flash Floods When Traveling, Can Claim Insurance?
JAKARTA, KOMPAS.com – Not long ago, a viral video showed the seconds of a flash flood on the Betimus River, North Sumatra. In the video, you can see the car being swept away by the flood.
Few car owners panic about this condition, including car owners who have insured their vehicles. Many car owners don’t know whether to submit an insurance claim under these conditions.
Laurentius Iwan Pranoto, Head of PR, Marcomm, and Event Asuransi Astra Oto, said that the insurance policy states that the coverage does not guarantee a loss, damage, and or expenses for motorized vehicles to third parties, which are directly or indirectly caused by one of them because of the flood.
“Damage can be covered if you have an extended guarantee. The extended guarantee includes riots, riots, hurricanes, floods and landslides, earthquakes, tsunamis, volcanic eruptions, and third-party legal liability,” said Iwan to Kompas.com recently.
However, previously the vehicle owner also needs to know what type of insurance he has, whether Total Loss Only (TLO) or Comprehensive. TLO-type insurance can be used if the cost of repairs or losses is above or equal to 75 percent of the price of the vehicle immediately before the loss.
In addition, it guarantees losses if the vehicle is lost or stolen. Meanwhile, in Comprehensive type insurance, the insurance company will pay claims for all types of damage, including light, heavy or even loss.
Prevent Risky Investments, OJK Resets the Financial Health of Insurance and Reinsurance
The Financial Services Authority (OJK) has issued two amendments to OJK Regulations (POJK) to improve the financial health of insurance and reinsurance companies, including Sharia insurance companies.
This new regulation is regulated in POJK Number 5 of 2023 concerning the Second Amendment to the Financial Services Authority Regulation Number 71/POJK.05/2016 concerning the Financial Soundness of Insurance Companies and Reinsurance Companies, as well as POJK Number 6 of 2023 regarding the Second Amendment to the Financial Services Authority Regulation Number 72/POJK.05/2016 concerning the Financial Soundness of Insurance Companies and Reinsurance Companies with Sharia Principles.
This change mainly regulates investment limits for related parties and non-related parties. This change is because the maximum investment limit for related parties for non-PAYDI assets is considered too large, so it cannot prevent excessive concentration risk.
In addition, PAYDI assets have no maximum investment limit for related and non-related parties. This can cause policyholders to face a high risk of concentration and management of PAYDI assets that are misused only for the benefit of the company group/affiliation.
The POJK adjustment also aims to harmonize arrangements with the banking sector regarding related and non-related parties so that a more appropriate risk assessment is obtained in an integrated/conglomerate manner. The ultimate goal of this change is to maintain the company’s financial health and optimize investment performance, including PAYDI/unit link.
The company is expected to be more prudent in placing investments by considering the company’s capital ability to bear risks related to investment placement. In addition, adjustments were also made to the exemption from the obligation to establish a guarantee fund for insurance companies participating in the policy guarantee program.
In applying the prudent investment principle, the company must maintain the level of risk exposure to related parties as well as one party and one group of investment recipients who are not related parties. This risk exposure must be adjusted to the company’s capital capacity to bear the risk, especially for PAYDI. This adjustment is expected to minimize the risk of excessive concentration and improve the financial health of insurance and reinsurance companies.
AAUI Reminds Public Liability Insurance After the Case of a Woman Stuck in an Elevator at Medan’s Kualanamu Airport
Bisnis.com, JAKARTA — The Indonesian General Insurance Association (AAUI) has responded regarding the case of a woman who fell from the elevator at Kualanamu Airport, Deli Serdang, North Sumatra, on Monday (24/4/2023). The general chairman of AAUI, Budi Herawan, considers that Kualanamu Airport should have liability insurance that covers all risks arising from claims from third parties or other parties. However, Budi does not know the extent of the insurance coverage from the Angkasa Pura II policy, which guarantees insurance in these public areas.
Furthermore, Budi explained that buildings often use public liability insurance rather than third-party liability insurance (TPL).
He explained that TPL insurance is directed more toward motorized vehicles and third parties. Meanwhile, public liability insurance is more applicable to buildings, so if something detrimental to tenants or visitors happens, they can sue and receive guarantees from the public liability policy.
Businesses have also tried to contact the management of PT Angkasa Pura II to inquire about the case. Still, until now, there has been no response from PT Angkasa Pura II. With this case, Kualanamu Airport and related parties can pay more attention to and improve the quality of building security and expand legal liability insurance coverage to provide better protection for visitors and tenants.
This information is presented by L&G Insurance Broker – The Smart Insurance Broker.
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