Here's How OJK Regulates Insurance Investment Management

By Editorial Team 03/08/2020
Summary

The Financial Services Authority (OJK) will regulate the insurance industry's investment portfolio. This rule is designed to mitigate risks on investment-linked insurance products (Paydi) and provide protection to consumers.

The new regulation will complement OJK Regulation (POJK) No.71/POJK.05/2016 on the Financial Health of Insurance Companies and Reinsurance Companies. "Improvements in terms of regulation means improving Paydi products' prudence," said Deputy Commissioner for Non-Bank Financial Industry Supervision (IKNB) II OJK Moch. Ihsanuddin.

In terms of consumer protection, this rule will contain provisions in the underwriting process to clarify investment transactions. However, these provisions are still being discussed with insurance industry players. So far, POJK No.71 has set limitations on the percentage of investments in deposits, stocks, securities, and mutual funds. However, OJK not yet to regulate the contents of investment portfolios, such as in which mutual fund it is allowed.

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