New OJK Regulation on the Solvency Calculation of Insurance Companies

The Financial Services Authority (“OJK”) is currently finalizing the Draft Regulation of OJK (“RPOJK”) on the Solvency Calculation of Insurance Companies and Reinsurance Companies. This regulatory framework will revoke several provisions under Article 3, Article 4, Article 32, and Article 33 of POJK No. 26 of 2025 on the Management of Assets and Liabilities of Insurance and Reinsurance Companies (“POJK 26/2025”).

“This refinement is also aimed at supporting the implementation of Statement of Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan – “PSAK”) 117 in Indonesia and strengthening the industry's readiness for the implementation of the Policy Guarantee Program (Program Penjaminan Polis/PPP), as mandated under P2SK Law," said OJK Chief Executive for Insurance, Guarantee, and Pension Fund Supervision, Ogi Prastomiyono.

The OJK is currently conducting a pilot project to test the implementation of the latest Risk-Based Capital (“RBC”) scheme, or New RBC, involving 10 insurance companies divided into two tiers, namely Tier 1 and Tier 2. The development of New RBC is driven by the adoption of global standards, including International Financial Reporting Standards (IFRS) 17 or PSAK 117, as well as the Insurance Capital Standard (“ICS”) and Insurance Core Principles (“ICP”) issued by the International Association of Insurance Supervisors (“IAIS”).

“It is targeted for completion and finalization this year, so that the implementation of reporting requirements can take effect in the first quarter of 2027,” he added.