LPS to Protect Insurance Policyholders Starting 2027

The Indonesia Deposit Insurance Corporation (LPS) will expand its financial consumer protection mandate by activating the Policy Guarantee Programme (PPP) in 2027, ensuring the rights of insurance policyholders are protected in the event of company failures.

This certainty comes as part of efforts to strengthen the national financial sector’s resolution, following the completion of the LPS roadmap for PPP preparations for the 2023-2027 period.

“In 2027, the PPP will be activated, with initial steps involving premium collection, surveillance, and policy data collection,” said LPS Executive Director of Claims, Resolution, and Insurance Regulation, Hermawan Wibowo, during a media briefing in Bandung, West Java, on Saturday.

Hermawan explained that participation in the PPP scheme will be mandatory for all life and general insurance companies meeting specific health criteria.

The programme focuses on providing protection across almost all business lines, with the exception of credit insurance, trade credit insurance, and suretyship.

“Therefore, the PPP will be activated in 2027, starting with the collection of premiums, surveillance, and policy data,” Hermawan added.

The implementation of the Policy Guarantee Programme by LPS is expected to be a significant step in strengthening policyholder protection and maintaining public confidence in the insurance industry.

Through a comprehensively prepared guarantee and resolution mechanism, LPS aims to ensure that the handling of problematic insurance companies can be conducted appropriately while prioritising the protection of policyholders’ rights.