Implications of Constitutional Court Decision, AAUI Urges Regulator to Establish New Legal Framework

The Indonesian General Insurance Association ("AAUI") is urging the Financial Services Authority ("OJK") and the government to create a new legal framework following the Constitutional Court Decision No. 83/PUU-XXII/2024 ("Decision 83/2024") regarding Article 251 of the Indonesian Commercial Code ("KUHD"), which prohibits the unilateral cancellation of insurance claims.

"In general, the association supports the principle of utmost good faith. With the amendment of policies from Article 251, we certainly need a new legal framework, whether it be an OJK Regulation or a revision of the law," said AAUI Chairman Budi Herawan to Hukumonline.com.

According to Budi, the Constitutional Court's interpretation of Article 251 of KUHD contradicts the 1945 Constitution of the Republic of Indonesia ("UUD 1945") and may lead to various interpretations. Moreover, the article is a relic of Dutch colonial law that is no longer relevant to current societal developments and legal needs.

"In its country of origin, this article has undergone revisions. Naturally, our position along with stakeholders is to adapt to this ruling as part of the applicable law. This is also a challenge for regulators to develop with new norms in order to provide the right legal framework," he explained.