Badung, CNBC Indonesia \u2014 The Deposit Insurance Corporation (LPS) says\nits planned insurance guarantee scheme is intended to provide maximum\nprotection while minimising disruption to insurance benefits.<\/p>\n
Ferdinan D. Purba, a member of the Board of Commissioners responsible\nfor the Policy Guarantee Programme, said the LPS was preparing several\nmechanisms for dealing with failed insurance companies. Its preferred\napproach is policy transfer, or transfer of business.<\/p>\n
Under this method, when an insurer collapses, customers should\ncontinue to receive cover without benefits being stopped abruptly.<\/p>\n
Ferdinan said that if an insurance company could no longer operate,\nthe LPS would seek to transfer its customers\u2019 policies to another\ninsurer willing to take them on.<\/p>\n
He gave the example of a customer with a health insurance policy\noffering benefits of up to Rp500 million whose insurer closes while the\ncustomer is receiving hospital treatment.<\/p>\n
\u201cWe will minimise interruptions to the benefits enjoyed by customers.\nThat is how public protection should work. It is the best approach,\u201d\nFerdinan said at an LPS media gathering at the Movenpick Hotel Jimbaran\nin Badung, Bali, on Friday (18 October 2026).<\/p>\n
The LPS would examine policy data, including benefits already used\nand the remaining cover available.<\/p>\n
Ferdinan said that if the customer had Rp280 million of cover\nremaining after making a claim, the LPS could contact another insurer to\noffer it a group of policies for transfer, including that customer\u2019s\npolicy.<\/p>\n
The receiving insurer would be asked to calculate the cost of taking\non the policies, based on the remaining cover. The LPS could then pay\nthe cost under the applicable mechanism, allowing the customer to become\na policyholder of the receiving insurer.<\/p>\n
Maximum policy guarantee of Rp500 million<\/strong><\/p>\n The LPS has proposed a maximum guarantee of Rp500 million\ncumulatively for each insured person under the Policy Guarantee\nProgramme.<\/p>\n Ferdinan said the proposed limit took the scope of policyholder\nprotection into account. LPS calculations indicate that a Rp500 million\ncap would cover around 97\u201399 per cent of policies or insured people.<\/p>\n The figure is substantially below the maximum Rp2 billion guarantee\nunder the bank deposit guarantee scheme. However, Ferdinan said the\nvalue of insurance benefits cannot be directly equated with the level of\nprotection needed when dealing with a failed insurer.<\/p>\n He illustrated this with a policy providing Rp600 million of cover\nand an annual premium of about Rp20 million. Calculating the cost of\ntransferring a policy should take account of the relevant cost of\ncoverage, rather than simply comparing the nominal insured amount, he\nsaid.<\/p>\n For example, if 10 insured objects each had cover of Rp600 million,\nthe total insured value would be Rp6 billion. But the premium cost of\nproviding cover for those objects would not automatically be equivalent\nto that insured value.<\/p>\n Aiming to build trust<\/strong><\/p>\n Ferdinan added that the policy guarantee scheme would not only\nprotect policyholders, but also help maintain stability in the insurance\nindustry and strengthen public confidence.<\/p>\n Public trust is an important factor in the industry\u2019s growth, he\nsaid. If customers feel protected, people are expected to become more\nconfident about using insurance products.<\/p>\n He said customer protection and industry stability would reinforce\neach other. Greater public confidence could ultimately support the\nsustainable development of the insurance industry.<\/p>\n \u201cWhen the industry grows and stability is maintained, customers and\nthe public will naturally feel confident about taking out insurance,\u201d\nFerdinan said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/lps-chief-policy-guarantee-scheme-will-provide-maximum-protection-1792399841",
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