Insurers’ Financial Health Rating: OJK’s New Alarm

By Editorial Team 20/02/2020
Summary

The Financial Services Authority (OJK) has formulated several regulations since early 2020, which aimed at tightening the insurance industry, including rules on the health level assessment of insurance and reinsurance companies. It is an additional rule to complement OJK Regulation No. 71/2016 on the Financial Health of Insurance and Reinsurance Companies.

Head of OJK’s Non-Bank Financial Industry Supervision Department 1A, Ariastiadi, said the rules would regulate the health grade of insurance and reinsurance companies on a scale of one to five. Grade one indicates a healthy condition, while grade five means unhealthy. With these grades, OJK would have a policy response according to the health condition of the insurance or reinsurance company. A corrective measure will be prepared if the financial health deteriorates.

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