New Spin-off Mechanism for Sharia Units from Insurance and Reinsurance Companies Introduced

As the market share of the sharia industry is now developing significantly, the Financial Services Authority (Otoritas Jasa Keuangan –“ OJK ”) has issued Regulation No. 11 of 2023 on Sharia Unit Spin-offs for Insurance Companies and Reinsurance Companies (“ Regulation 11/2023 ”). [1] This new Regulation 11/2023 came into force on 11 July 2023 [2] and repeals and replaces several articles originally set out under Regulation of the OJK No. 67/POJK.05/2016 (“ Regulation 67/2016 ”), [3] specifically provisions that specifically addressed sharia unit spin-offs (“ Spin-offs ”). [4]