New insurance code

The Indonesian parliament has approved the new insurance code, which entered into force on 23 October. The amendments to this new version will have a particular impact on insurers whose capital is partly owned by foreign companies.

Notable changes have been made including that of the shareholders’ nationality. While the threshold of 80% foreign equity is maintained, the remaining 20% must be owned by a natural person of Indonesian nationality. In the past, this 20% could be held by a local company.

Further innovations: Indonesian risks must be placed in the country, the local reinsurance capacity must be exhausted before resorting to international markets, while the separation of life, non life and takaful activities must be respected.

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