CELIOS: Equity Rules Serve as OJK Tool to Protect Policy Holders

Jakarta (ANTARA) – Nailul Huda, an economist at the Centre of Economic and Law Studies (CELIOS), has stated that the Financial Services Authority (OJK) regulations requiring increased minimum paid-up capital and equity for insurance companies can serve as a means to protect customers.

This is particularly important given that strong capitalisation can support companies in fulfilling their obligations. He noted that implementing such regulations can also prevent claim defaults resulting from fraud and manipulation by irresponsible parties.

“Fraud cases also occur because the minimum capital is not large and so on. This is what OJK has observed in recent years,” Nailul Huda said during the One Zurich Iftar 2026 event in Jakarta on Monday afternoon (9 March).

“I have met with OJK several times, and they always say that capital serves as their tool to protect customers and the industry,” he added.

Furthermore, Nailul stated that such regulations can also boost public confidence in the insurance industry, which is an important aspect in maintaining the growth and sustainability of the financial services sector.

“Insurance is a sensitive industry. When insurance capital is small, it impacts trust in financial institutions, not just insurance – that trust will decline. When capital is strong, trust will also increase. This is precisely what OJK wants to achieve,” he said.

Additionally, he assessed that an insurance company with substantial capital ownership would certainly have strong risk resilience buffers to face the impacts of current global and domestic economic uncertainties.

He noted that increasingly, more people are becoming aware of the importance of having insurance, as evidenced by the rising proportion of spending on taxes and insurance, which has increased to 8.06 per cent of total non-food sector expenditure in 2025.

To optimise this potential, he recommended that insurance companies continue innovating to develop various insurance products tailored to the needs of younger generations, including coverage for mental health issues.

“Mental health is identified as a potential game changer going forward because, regardless, mental health and similar issues have become a concern for younger generations,” Nailul said.