OJK: Governance and Risk Management Are Key to Maintaining Trust in the Insurance Sector
Jakarta (ANTARA) - Head of the Department of Insurance and Supporting Services Supervision at the Financial Services Authority (OJK), Sumarjono, said strengthening governance and risk management is the key to maintaining customers’ trust in insurance companies.
“The life insurance industry is built on trust, and trust only endures if governance and risk management are implemented not merely as obligations, but as a culture,” he said in a written statement received in Jakarta on Saturday.
To strengthen this, OJK is currently implementing a number of regulations that set a new standard in insurance management, including OJK Regulation (POJK) Number 36/2025 on Strengthening the Health Insurance Ecosystem, which will take effect from 22 March 2026.
Sumarjono said the regulation aims to encourage more accountable operation of companies and to prevent deviations in the management of the public life insurance protection fund.
The move to strengthen governance and risk management by insurance firms, he said, is also supported by enhanced supervision and protection of policyholders’ rights by the House of Representatives of the Republic of Indonesia (DPR RI).
Member of Commission VI and also the Chairman of the State Finance Accountability Agency (BAKN) of the DPR RI, Herman Khaeron, said they are utilising the results of audits by the Audit Board of Indonesia (BPK) to probe financial governance issues, push for improvements to internal control systems, and ensure follow-up on audit findings.
He said the DPR RI also encourages the realisation of the Policy Guarantee Programme through Lembaga Penjamin Simparnan (LPS) as a cushion of protection when a financial failure occurs in an insurance company.
As an example of efforts to address financial failure issues in an insurance company, he highlighted the positive development of IFG Life, which is currently mandated to manage the policy portfolio of former Jiwasraya customers through a scheme to rehabilitate the insurance industry.
“The management of that company shows improving development and is hoped to contribute to restoring public trust in the national insurance industry,” said Herman Khaeron.
In line with regulator and legislative efforts, Emira E. Oepangat, Executive Director of the Indonesian Life Insurance Association (AAJI), said the association is actively promoting enhancements in the competency of Human Resources in the insurance sector to strengthen governance and risk management of companies.
She said the strengthening of HR competencies is undertaken through the development of Grha AAJI as a central integrated collaboration hub and the development of a comprehensive learning ecosystem within the AAJI Industry University programme.
In addition to preventing potential internal fraud, she said strong governance and risk management are needed to ensure that claim payments are made legally, to the right person, and in the right amount in accordance with the policy provisions to minimise the risk of external fraud.
“This control is important because various studies show that fraud can contribute around five percent to the claims ratio, which in the end can affect premium stability,” said Emira E Oepangat.