The Financial Services Authority (OJK) has issued a new regulation governing insurance intermediaries.
The accelerated use of digital technology in services provided by insurance brokers, and the increasing need for cooperation between brokers and other parties to improve service quality, have had a positive impact on the insurance industry and consumers. However, it also poses risks, thus pushing the OJK into drawing up the regulation, dubbed “POJK 28 of 2022“ that enhances regulation and supervision yet provides room for innovation.
In addition, to increase the effectiveness of supervision by the OJK, this regulation contains several provisions related to the frequency of submission of periodic reports, and the imposition of sanctions on insurance brokerage companies, reinsurance brokers and insurance loss appraisal firms.
The main provisions of the new regulation include:
1. Regulations regarding digital insurance broking services
2. Obligations of insurance companies to ensure that professionals carry out their duties and responsibilities;
3. Cooperation between insurance or reinsurance brokerage companies (co-broking)
4. Obligation to submit quarterly financial reports; and
5. Adjustments to regulations regarding administrative sanctions, including administrative fines.
The new regulation entered into force on the date of promulgation on 28 December 2022.
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