1. 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 dated 2 October 2014 on the Insurance Law 2014).
2. The Insurance Law 2014 envisaged that the relevant implementing regulations, which will provide the detailed implementing rules, will be issued within two and a half years of the law being promulgated. To date, however, a number of key implementing regulations have yet to be issued by the Indonesian Financial Services Authority (locally known as the “OJK”). 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 impacts on the execution of insurance M&A transactions in Indonesia.
3. In this bulletin, we highlight in particular four key areas which are often carefully considered when implementing insurance M&A transactions 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 further details on each of the above topics.