It has been almost two years since the Indonesian Insurance Law (“Insurance Law 2014”) was passed into law by the Indonesian House of Representatives (click here for our e-bulletin of 2 October 2014).
The Insurance Law 2014 envisaged that regulations setting out detailed rules for implementing the new requirements would be issued within two and a half years of the law being promulgated. To date, however, the Indonesian Financial Services Authority (known locally as the “OJK”) has yet to issue a number of key implementing regulations. That said, in the period since the Insurance Law 2014 was passed into law, a number of important market and (often unwritten) regulatory practices have developed which impact on the execution of insurance M&A transactions in Indonesia.
In this briefing, we highlight four key areas which are often given careful consideration when insurance M&A transactions are undertaken in Indonesia:
- Foreign ownership limit for Indonesian insurance companies;
- Definition of “controller” of an Indonesian insurance company and applicability of “fit and proper” test;
- OJK’s “single presence policy” in the Indonesian insurance sector; and
- Bancassurance arrangements, in particular whether exclusive arrangements are permissible.
Please click here for our briefing.