OJK Prepares Rules for Periodic Reporting by Insurance Brokers

The Financial Services Authority (Otoritas Jasa Keuangan - “OJK”) is drafting a Circular of OJK (“Circular”) that will regulate the periodic reporting obligations of insurance brokerage companies, reinsurance brokerage companies, and insurance loss appraisal companies (collectively referred to as “Insurance Companies”). These provisions are part of efforts to enhance supervision and transparency in the insurance sector, particularly on the intermediary fees received by insurance and reinsurance brokerage companies.

“OJK emphasizes the importance of insurance brokerage companies submitting periodic reports on the intermediary fees they receive. This step is in line with the latest tax regulations,” said OJK’s Executive Director of Insurance, Guarantee, and Pension Fund Supervision, Ogi Prastomiyono, to Hukumonline.

OJK is currently still open to public input on the draft Circular. As is known, based on the Director-General of Tax (“Director-General”) No. SE-1/PJ/2025 (“Circular 1/2025”), intermediary fees received by reinsurance brokerage companies are subject to Article-23 Income Tax (Pajak Penghasilan - “PPh”) at a rate of 2% of the gross amount.

This provision applies to reinsurance brokerage companies that are domestic corporate taxpayers and permanent establishments. Conversely, commissions received directly by reinsurance companies are not subject to Article-23 PPh.