LPS aims to activate insurance policy guarantee programme by 2027

The Chairman of the Board of Commissioners of the Indonesia Deposit Insurance Corporation (LPS), Anggito Abimanyu, is targeting the Insurance Policy Guarantee Programme (PPP) to become active by 2027.

Anggito explained that the institution is currently drafting LPS Regulations (PLPS) to serve as the legal umbrella for the policy’s implementation. However, the activation of the programme will depend on the issuance of Government Regulations (PP) and the results of coordination with the Financial Services Authority (OJK) and the Ministry of Finance.

“The activation depends on the Government Regulation. While the final deadline is January 2028, we hope it can be active by mid-2027,” Anggito told reporters during the Lampung Financial Festival (Finfest) 2027 in Bandarlampung on Saturday.

Currently, the LPS is preparing the PLPS, which will regulate membership registration. However, the membership mechanism for insurance companies will differ from the banking sector, as insurance companies must meet specific requirements to participate in the guarantee scheme.

“For banks, membership in the LPS is mandatory. For insurance, it is not; there are requirements regarding capital, Risk-Based Capital (RBC), capital adequacy, and other factors. We are currently formulating these,” he explained.

Previously, the OJK stated that insurance companies must meet several criteria to participate in the policy guarantee programme. One of the key indicators is a solvency level, or Risk-Based Capital (RBC), of at least 120 per cent, in accordance with OJK regulations.

Ogi Prastomiyono, the Executive Head of Insurance, Guarantee, and Pension Fund Supervision at the OJK, mentioned that insurance companies that have not met the required health standards will not automatically enter the Policy Guarantee Programme when the scheme becomes effective, no later than 2028.

In the most recent discussions, Ogi noted that the guaranteed benefit value in the programme is expected to reach a maximum of Rp500 million per policy. This value is estimated to cover more than 80 per cent of policyholders.

“So, if the bank deposit guarantee is a maximum of Rp2 billion, our policy guarantee will be Rp500 million,” he added.