Mandatory Vehicle Insurance Regulations Under Development, A Solution to Reduce Accident Losses

JAKARTA, KOMPAS.com - The Ministry of Finance (Kemenkeu) is still studying the form of mandatory third-party liability insurance related to traffic accidents. Kemenkeu is also preparing a government regulation (PP) regarding this mandatory insurance.

Director of Pension Fund Development, Insurance, and Actuarial at Kemenkeu, Ihda Muktiyanto, stated that the implementation of these mandatory insurance regulations needs to be viewed from various aspects, including the extent of protection that can be provided by the insurance concept, its management mechanism, and business model.

“How the role of elements or the insurance ecosystem can realise the formation of mandatory third-party insurance related to traffic accidents,” he said during the PPDP Regulatory Dissemination Day event on Monday (13/4/2026).

As a note, this mandatory insurance is a mandate from the Financial Sector Development and Strengthening Law (UU P2SK) No. 4 of 2023 to encourage market deepening so that the insurance industry can develop.

Ihda explained that some examples of such mandatory insurance programmes could cover three aspects: mandatory third-party liability insurance related to traffic accidents, mandatory fire insurance, and home insurance against disaster risks.

“This is an example in the law and can serve as an illustration of the form of mandatory insurance that can receive government support,” he said.

“We will use it as a benchmark for that,” he added.

However, Ihda said that the form of this mandatory insurance is still a concept that needs further review regarding its final form.

Currently, Kemenkeu is preparing a government regulation (PP) related to this mandatory insurance. The regulation will need approval from the House of Representatives (DPR RI). His side is also continuously coordinating with the Financial Services Authority (OJK) regarding its operational system.

“This mandatory insurance is binding and provides additional protection to the public,” he concluded.