18 August, 2017
On 31 July 2017, the Financial Services Authority (OJK) issued Circular Letter No. 55/POJK.55/2017 on Periodic Reports of Insurance Companies, Reinsurance Companies, Insurance Brokerage Companies, Reinsurance Brokerage Companies and Loss Adjuster Companies (CL 55/2017). It became effective on the same day.
CL 55/2017 is an implementing regulation of Law No. 40 of 2014 on Insurance (Insurance Law).
CL 55/2017 applies to all reports that must be submitted by insurance companies, reinsurance companies, insurance brokerage companies, reinsurance brokerage companies, sharia units within insurance/reinsurance companies and loss adjuster companies.
CL 55/2017 applies also to sharia insurance/reinsurance companies.
Overview
Insurance companies, reinsurance companies, and sharia units within insurance/reinsurance companies
Insurance companies, reinsurance companies, and sharia units within insurance/reinsurance companies must prepare and submit:
a. a monthly financial report, which must be submitted to the OJK no later than 10 days after the end of the month
b. a quarterly financial report, which must be submitted to the OJK no later than 1 month after the end of the reporting period
c. an annual report, which consists of financial reporting and a management analysis, that must be submitted to the OJK no later than 30 April in the next financial year
d. other reports, eg, a business plan, a company plan, a reinsurance program plan and a financial integrated management plan (if any) as required
CL 55/2017 now specifies that the annual report for insurance companies, reinsurance companies, and sharia units within insurance/reinsurance companies must consist of at least the following reporting/analysis:
a. an analysis that the controlling shareholder(s) of the insurance companies, the reinsurance companies or the sharia units have met requirements set out under prevailing regulations
b. a year-end risk assessment of the insurance companies, reinsurance companies and sharia units
c. an action plan to mitigate any risks specified in item (b) above
d. a self-assessment report on risk management
e. an implementation report on the anti-fraud work plan
f. a good corporate governance report
g. an implementation report on the covering the annual business plan
h. a report on insurance risk data (eg, tariff and own retention)
i. an implementation report on the reinsurance program
j. an annual actuarial report prepared by the appointed actuary of the insurance company and the reinsurance company
CL 55/2017 complements OJK Regulation No. 71 of 2016 on Financial Soundness of Insurance Companies and Reinsurance Companies (Regulation 71) and OJK Regulation No. 72 of 2016 on Financial Soundness of Sharia Insurance Companies and Reinsurance Companies (Regulation 72), as regards reporting obligations of insurance companies and reinsurance companies.
Regulation 71 and Regulation 72 do not provide specific requirements on the contents of the annual reports.
For further information, please contact:
Mark Innis, Hadiputranto, Hadinoto & Partners
mark.innis@bakernet.com
