Government Prepares Regulation of the Minister of Finance on Parametric Disaster Insurance

The Government, in collaboration with the General Insurance Association of Indonesia (Asosiasi Asuransi Umum Indonesia– “ AAUI ”), is currently preparing a specialized parametric disaster insurance product under a consortium scheme. The implementation of this product is planned to be set out in Regulation of the Minister of Finance (Peraturan Menteri Keuangan– “ PMK ”), which is targeted for issuance in 2026.

“With the remainder of 2025, the government is in the process of preparing the regulatory instruments in the form of PMK and Decree of the Minister of Finance (Keputusan Menteri Keuangan/KMK),” stated AAUI Executive Director Cipto Hartono to Hukumonline.

Cipto explained that the regulation will provide more detailed provisions regarding the mechanisms, structure, and other requirements related to the parametric disaster insurance product, which will be implemented by domestic general insurance and reinsurance companies through a consortium scheme. These provisions are similar to those governing the State-Owned Property Insurance Consortium (Konsorsium Asuransi Barang Milik Negara/KABMN), which serves a protective function for the assets of ministries and government agencies using an indemnity-based insurance model.

“So, there are two different products, and we are looking for the intersection between them in order to regulate the consortium scheme,” he added.