LPS Unveils Two Implementation Schemes for Insurance Policy Guarantee Programme
Jakarta – The Indonesian Deposit Insurance Corporation (LPS) has prepared two scenarios for implementing the Insurance Policy Guarantee Programme (PPP). The first scenario involves accelerated activation of the PPP with minimum readiness levels by 2027, whilst the second scenario entails full implementation by 2028 with ideal readiness levels.
Ferdinand D. Purba, a member of the LPS Board of Commissioners overseeing the Policy Guarantee Programme, stated that a mechanism is needed to maintain public confidence and ensure that in the event of insurance company failure, the impact can be managed in an orderly manner, crucially without harming policyholders and without disrupting industry stability.
“In Indonesia, the PPP plays a strategic role in strengthening the insurance industry ecosystem. This programme functions not only as a protection mechanism for policyholders, but also as an instrument to maintain stability and confidence in the insurance industry,” Ferdinand stated on Friday, 13 March 2026.
He explained that insurance company failures are a phenomenon that frequently occurs within the dynamics of the financial industry. During the period from 2011 to 2024, approximately 428 insurance company failures were recorded across various countries, with the majority occurring in general insurance.
Meanwhile, in Indonesia, Ferdinand noted that between 2011 and 2025, 25 insurance companies had their operating licences revoked, with approximately 17 of these classified as company failures.
Therefore, he emphasised that the strategic role of the Insurance Policy Guarantee Programme (PPP) is essential for strengthening the insurance industry. Through the policy guarantee scheme, insurance company failures can be handled quickly and appropriately without disrupting overall industry stability.
Regarding PPP preparation developments this year, the LPS has established regulatory and operational frameworks, registered PPP membership, and conducted simulations in collaboration with industry experts and practitioners. “If activation is accelerated in 2027, LPS is ready to implement,” Ferdinand concluded.