JAKARTA (Yosefardi) – The Financial Services Authority (OJK) is now making new regulation to allow foregin insurance firms for opening branches in Indonesia next year.
OJK chairman Firdaus Djaelani said the regulation will require a minimum capital as applied in other countries.
The foreign insurance firms will be allowed to open branches in Indonesia as the consequence of the implementation of the Asean Economic Community (AEC) by 2015.
Local insurance firms will be also equally treated when they intend to open branches in other countries in Asia region.
As ruled by the current government regulation – (PP) No. 39/2008 concerning insurance business – the minimum paid-up capital is set at Rp100 billion, and Rp50 billion for syariah insurance firms.
While foreign ownership on insurance firm is set for maximum 80%. The foreign insurance firms are prohibitted to open branches in Indonesia and could operate through a joint venture mechanisme.