Following the Revision of P2SK Law, Ministry of Finance Accelerates the Drafting of RPP on LPS Fund Placement

The Ministry of Finance (“Kemenkeu”) will soon finalize the Draft Government Regulation (“RPP”) on the Placement of Funds by the Indonesia Deposit Insurance Corporation (Lembaga Penjamin Simpanan – “LPS”). This follows the agreement reached between the Government and the House of Representatives (Dewan Perwakilan Rakyat/DPR) on the amendments to Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“Law 4/2023”).

“What is certain, and what is most eagerly anticipated, is the Policy Guarantee Program,” said Herman Saheruddin, Acting Director General of Financial Sector Stability and Development, to Hukumonline.

LPS is currently preparing two implementation scenarios for the Policy Guarantee Program (Program Penjaminan Polis – “PPP”), namely an accelerated PPP activation scenario with a minimum level of readiness by 2027, and a full implementation scenario with an ideal level of readiness by 2028.

The policy guarantee mechanisms will adopt an approach similar to that currently applied by LPS under the deposit insurance program in the banking sector. The framework includes the transfer of assets and claim payment obligations to a designated party, while also providing options for the resolution of troubled insurance companies and sharia insurance companies.