OJK to Sanction Unit Link Agents and Insurers Breaching Regulations

Jakarta — CNBC Indonesia organised an Insurance Forum with the theme “Optimising Insurance Protection and New Direction for Unit-Linked Product Development in Indonesia” as a platform for regulators, industry associations, and insurance professionals to discuss solutions for driving growth and accelerating transformation within Indonesia’s national insurance sector.

The strengthening and improvement of PAYDI (Investment-Linked Insurance Products) or unit-linked products, according to Ogi Prastomiyono, Executive Head of Insurance, Guarantees and Pension Fund Supervision at the OJK, represents one of the key reforms in Indonesia’s insurance industry.

Currently, a number of policies issued by the OJK serve as guidelines for insurance companies issuing unit-linked products that must be complied with and reported back to the OJK. These include matters related to product improvement, sales processes, and agent conduct.

From the OJK’s review, the unit-linked product reform has been well-received by insurance companies, including the strengthening of Circular Letter No. 5/2025 regarding PAYDI products, which will be elevated to a Financial Services Authority Regulation (POJK). One key improvement concerning PAYDI relates to promoting agent understanding and prospective customer awareness regarding investment risks within unit-linked products, which become the responsibility of the policyholder. For agents and industry players who do not comply with OJK regulations, sanctions will be imposed.

The OJK highlighted that reforms to unit-linked products will be rolled out with stricter compliance requirements and enhanced oversight mechanisms to protect consumers and maintain market integrity.