GFIA comments on Otoritas Jasa Keuangan (OJK) Letters regarding Indonesian Reinsurance CessionsRelease Date: 06/11/2014 Staff Reference: Janice Hilchie
Dear Coordinating Minister Chairul Tanjung:
The Global Federation of Insurance Associations (GFIA) which through its 38 member associations represents insurers that account for around 87% or more than $4.0 trillion in total insurance premiums worldwide would like to draw your attention to a recent development in Indonesia, and to ask you to reconsider. We believe the development to be ultimately harmful to Indonesia and its citizens.
Our concerns stem from a series of informal actions undertaken by the Non-bank Financial Institutions division of the Otoritas Jasa Keuangan (“OJK”), which on December 2, 2013 sent letters (the “Letters”) to all admitted insurance companies licensed in Indonesia. The OJK asked those companies to submit plans to the OJK showing how they would reduce cessions of reinsurance going offshore and increase cessions of reinsurance remaining onshore. Indonesia’s current account deficit was cited as the reason for the action requested...