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26 February, 2017
1. It has been over two years since the Indonesian Insurance Law (“Insurance Law 2014”) was passed into law by the Indonesian House of Representatives (locally known as the “DPR”) on 17 October 2014.).
2. The Insurance Law 2014 envisaged that the relevant implementing regulations, which will provide the detailed implementing rules, including among others rules on the licensing of insurance companies, will be issued within two and a half years of the law being promulgated.
3. In late December 2016, the Indonesian Financial Services Authority (locally known as the “OJK”) finally issued a series of more detailed regulations which seeks to further implement various key aspects of Insurance Law 2014. One of the regulation is OJK Regulation No. 67/POJK.05/2016 regarding Licensing and Institutional aspects of Insurance Company, Sharia Insurance Company, Reinsurance Company, and Sharia Reinsurance Company (“OJK Regulation 67/2016”).
4. In this bulletin, we highlight certain key issues addressed in OJK Regulation 67/2016, focusing in particular on developments which could have a bearing on the insurance M&A landscape in Indonesia:
- Change of ownership requiring OJK approval;
- Tightening of local shareholding requirements;
- Minimum paid-up capital requirements for insurance companies;
- Compliance with OJK’s single presence policy in insurance sector;
- Sharia business divestment;
- Foreign employees related issues; and
- Financed shareholders arrangements.
For further information, please contact:
David Dawborn, Partner, Herbert Smith Freehills
david.dawborn@hbtlaw.com
