Insurance Agents Must Educate Consumers, Face Sanctions for Breaches

Jakarta — The Head of the Financial Services Authority’s (OJK) Executive for Insurance, Guarantee, and Pension Supervision, Ogi Prastomiyono, has stressed that consumers must understand every insurance product they select in order to assess the protection and risks involved.

He has also urged every insurance company to ensure their marketing agents educate prospective consumers, particularly regarding investment-linked insurance products (PAYDI) or unit links.

“Insurance sales agents must understand the risks, and prospective consumers must also comprehend the risks associated with these insurance products. Sales processes must be recorded and accompanied by explanations,” Ogi stated at the Insurance Forum 2026 on Thursday, 26 February 2026.

Investment-linked products are relatively sophisticated and not easily understood. Ogi highlighted that unit link investments carry downside risk that must be clearly communicated to prospective consumers.

“Both sellers and prospective buyers of unit link products must exercise caution. Insurance agents are now required to register with the OJK,” he added.

Consequently, if mis-selling occurs, consumers can lodge complaints with the OJK. If violations are substantiated, the OJK can cancel the agent’s registration. For serious breaches, agents may be permanently prohibited from working as insurance agents anywhere in Indonesia.

Agent registration commenced in June 2025 and continues to date as an ongoing process. The OJK also conducts enforcement actions in response to reported violations by agents. Insurance companies that fail to comply with regulations also face strict sanctions from the OJK.