Parliament Determines Insurance Policy Provision Does Not Contradict 1945 Constitution
JAKARTA — The Indonesian Parliament (DPR) has contended before the Constitutional Court (MK) that Article 304 of the Commercial Code (Kitab Undang-Undang Hukum Dagang, KUHD) — which governs the terms of insurance policies — does not conflict with the 1945 Constitution.
The DPR presented its position during proceedings at the Constitutional Court. The contested provision is Article 304 of the KUHD.
“The DPR of the Republic of Indonesia is of the opinion that Article 304 of the KUHD does not contradict the 1945 Constitution of the Republic of Indonesia and retains binding legal force,” stated Abdullah, counsel for the DPR, in the Constitutional Court’s Main Hearing Room on Tuesday, 10 March 2026.
He explained that Article 304 of the KUHD addresses only the essential elements that must be included in life insurance policies on a strictly minimum basis.
The contested article reads as follows:
Article 304
A policy shall contain:
the date on which the insurance cover is concluded;
the name of the policyholder;
the name of the person whose life is insured;
the time when the risk for the insurer commences and ends;
the sum insured;
the insurance premium.
According to Abdullah, these provisions are not intended to comprehensively regulate all technical aspects of insurance contracts, including claims procedures and conditions.
Such matters are viewed as inherently dynamic and may vary according to the characteristics of each insurance product.
“These provisions are not intended to lock in all technical aspects of insurance contracts, including claims procedures and conditions, which are by nature dynamic and variable,” Abdullah stated in the proceedings.
Abdullah noted that these regulations relate to several other laws, including the Insurance Law, the Financial Services Authority (OJK) Law, and the Law on the Development and Strengthening of the Financial Sector.
The collective regulatory framework is considered to constitute an integrated system of regulation that demonstrates the state’s role in protecting the public in the insurance sector.
The constitutional challenge was initiated by Ng Kim Tjoa, a private citizen who petitioned the Constitutional Court for a constitutional review of Article 304 of the KUHD.
The petition is registered as Case No. 25/PUU-XXIV/2026, with proceedings scheduled to hear statements from Parliament and the President.