The European federation of insurance companies "Insurance Europe" has expressed its concern about the rise of protectionism in the Indonesian market. The institution lists the main constraints on the activity of foreign reinsurers.
The first complaint concerns the national reinsurers'legal cession. The creation of a new national reinsurance company "Indonesia Re" and the need to increase its share capital suggests an imminent increase in the legal cession rate.
Another constraint, Indonesian insurers have been required, since January 1, 2016, to reinsure their simple risks (automobile, health, life, workmen's compensation, credit and bond) with national reinsurers. Moreover, a minimum of 25% of the major risks must be reinsured with public companies.
In addition, since December 28, 2016, the Indonesian regulator has limited the maximum duration of employment of foreign workers in the insurance sector to five years. The responsibilities entrusted to them are also limited.
"Insurance Europe" finally hopes that these constraints will be eased following negotiations on the free trade agreement between Indonesia and the European Union, in progress since July 2016.
More news on :
- The insurance market in Indonesia [4]