The Financial Services Authority ("OJK") has issued a draft regulation amending OJK Regulation No. 67 of 2016 on Licensing and Institution of Insurance Companies and Reinsurance Companies ("Reg 67"). The draft regulation is currently being disseminated by the OJK to get feedback from the public.
We have not received any confirmation on when the OJK will enact the regulation.
Several proposals in the draft regulation may help prepare for the sharia spin-off requirements from a corporate structure and operations perspective.
Clients are encouraged to provide feedback to the OJK if there are still unclear provisions in the draft regulation, particularly on the grandfathered percentage of the spun-off sharia insurance companies.
Key Proposed AmendmentsThe following are the key proposed amendments in the draft regulation:
- Both direct and indirect foreign shareholdings must be included in the calculation of an insurance company's foreign shareholdings.
- If one of the insurance company's shareholders is a listed Indonesian company, the calculation of the indirect shareholding at that listed Indonesian company level will be done based on the cumulative foreign shareholdings in that listed Indonesian company based on the shareholding composition report issued by, or reported by, that listed Indonesian company to, the Indonesia Stock Exchange.
- Insurance companies' obligation to identify and report the insurance companies' foreign shareholdings to the OJK does not apply if the insurance company is a public company (perusahaan terbuka). The above provisions provide clarity on things that were unclear in Government Regulation No. 14 of 2018 on Foreign Ownership in Insurance Companies.
The above provisions provide clarity on things that were unclear in Government Regulation No. 14 of 2018 on Foreign Ownership in Insurance Companies.