LPS Prepares Two Scenarios for Implementation of Insurance Policy Guarantee Scheme
Jakarta — The Insurance Policy Guarantee Institution (LPS) is preparing two implementation scenarios for the Insurance Policy Guarantee Scheme (PPP).
Ferdinand D. Purba, member of the LPS Board of Commissioners overseeing the Policy Guarantee Scheme, stated that the first scenario involves accelerated activation of the PPP with minimum readiness by 2027, and full implementation by 2028 with ideal readiness levels.
“Therefore, a mechanism is required that can maintain public confidence and ensure that when insurance company failures occur, their impact can be managed in an orderly manner without harming policyholders or disrupting industry stability,” he said during a Limited Discussion on Breaking Fast with Journalists to discuss the Development of Indonesia’s Insurance Industry Ahead of the Implementation of Policy Guarantees by LPS on Thursday, 12 March 2026.
He added that globally, insurance company failures are a frequent phenomenon within financial industry dynamics.
“Meanwhile, in Indonesia, during the period from 2011 to 2025, there were 25 insurance companies whose business licences were revoked, and approximately 17 of them can be categorised as company failures,” he stated.
Ferdinand therefore highlighted the strategic role of the Insurance Policy Guarantee Scheme (PPP) in strengthening the insurance industry, as with the policy guarantee scheme in place, public trust is fortified.
“In Indonesia, the PPP has a strategic role in strengthening the insurance industry ecosystem. This programme not only functions as a protection mechanism for policyholders, but also as an instrument to maintain stability and confidence in the insurance industry,” he explained.
The development of LPS preparations in administering the PPP in 2026 includes forming regulatory and operational frameworks, registering PPP membership, and conducting simulations, whilst collaborating with industry experts and practitioners.
“If activation is accelerated in 2027, LPS is already prepared to implement it,” he concluded.