LPS Prepares Insurance Policy Guarantee Scheme for 2027 Launch

The Indonesia Deposit Insurance Corporation (Lembaga Penjamin Simpanan/LPS) is preparing to launch an insurance policy guarantee scheme to protect policyholders, with activation targeted for 2027.

LPS Board of Commissioners member for the Policy Guarantee Programme, Ferdinan D Purba, said the institution was finalising key aspects of the scheme, including regulations, operational and information technology preparations, staffing, simulations and industry testing.

“We have entered the final stages of preparation for the programme, which is planned to be activated in 2027. The law stipulates that it must be in place no later than January 2028,” Purba told reporters at a press conference in Kedonganan, Kuta subdistrict, Badung, on Thursday (15 October 2026).

Purba said the guarantee would cover all insurance products with a protection function, both general and life insurance, as well as endowment policies. However, investment components in unit-linked products would not be covered.

“The insurance guarantee covers all insurance products that provide protection, both general and life insurance, except investment components such as unit-linked products, which are not covered,” Purba said.

LPS expects 140 insurance companies to participate, representing a total of 91 million policies. The proposed maximum guarantee is currently Rp500 million per policy.

“Across those 140 insurance companies, there are 91 million policyholders in total. The proposed limit remains Rp500 million per insured policy,” Purba added.

LPS Executive Director for Insurance Surveillance, Examination and Information Suwandi stressed that the insurance policy guarantee scheme differs from the bank deposit guarantee, which focuses on reimbursing depositors. Its basic principle is to ensure that policies remain in force until the end of their coverage period.

For example, if an insurance company fails or closes in the third year of a 10-year contract, customers would otherwise be unable to continue their policies and might have to buy new ones at relatively higher prices. Under the proposed scheme, policyholders would have certainty that their policies would remain in force through to the end of the contract.

If an insurer fails, Suwandi said, LPS would prioritise dealing with the policies by transferring them to another financially sound insurance company.