LPS Ready to Guarantee Insurance Policies, But Not All Companies Will Qualify

The Indonesia Deposit Insurance Corporation (LPS) has stated it is prepared to carry out its mandate regarding the insurance policy guarantee programme (PPP). The Chairman of the LPS Board of Commissioners, Anggito, noted that based on the P2SK Law, the guarantee programme will be implemented no later than 2028.

“If asked whether we are ready, LPS is ready,” he stated during a Hearing with Commission XII at the DPR RI building in Jakarta on Tuesday (19/05/2026).

Anggito explained that LPS has prepared a roadmap for the insurance policy guarantee programme for the 2023-2027 period. “We have been preparing, but the specific wording in the P2SK Law remains to be finalised. Currently, it states no later than 2028, and we will follow whatever decision is made,” he said.

However, Anggito revealed that under the policy guarantee programme, not all insurance companies will be guaranteed, unlike the banking sector. “The difference is that in insurance, not all companies will be participants in the guarantee,” he explained.

Anggito further clarified that LPS has established criteria that insurance companies must meet to become participants. “We will implement a cut-off based on Risk-Based Capital (RBC) or financial health. Therefore, it will not be like banks where everyone is included,” he noted, adding that determining who qualifies as a participant is a crucial factor.

Furthermore, Anggante added that LPS has already prepared the necessary organisational and institutional structures, including the appointment of a Board of Commissioners member specifically for the insurance policy guarantee programme. “We now have the Board members, the organisation, consultants, and a roadmap. We are currently drafting regulations and conducting simulations,” he said.

Additionally, the institution has initiated work on calculating financial health and membership requirements. “Regarding whether there is a difference between premium funds from banks and insurance: the P2SK Law specifies they are separate, but there is a provision for ‘interborrowing’. This means in the event of an insurance resolution where premium funds have not yet been fully collected, they may temporarily borrow funds, although the accounting remains separate,” he concluded.