OJK: Policy Guarantee Agent Offers Confidence in Insurance Claim Payment

 

The Policy Guarantee Agency (LPP) can provide certainty in the payment of claims by reducing the danger of operational failure of insurance companies, according to the Financial Services Authority (OJK).

According to Ogi Prastomiyono, Chief Executive for Supervision of Insurance, Guarantees and Pension Funds and Member of the Board of Commissioners of OJK, there is occasionally a risk associated with an insurance company going bankrupt, which can be brought on by poor management and/or unfavorable economic conditions.

Ogi stated this at the 9th AAUI International Seminar, held at the Shangri-La Hotel in Jakarta on Thursday, 9/3/2023. "Therefore, the existence of a policy guarantee program is expected to provide certainty in payment of benefits/claims, thereby protecting policyholders from the risk of operational failure of insurance companies," he added.

Five years after this Law's enactment, the Policy Guarantee Institution in the Financial Sector Development and Strengthening Law (UU PPSK) went into force.

Ogi believes that one of the most crucial factors in increasing consumer trust in the national insurance business sector is the existence of LPP.

In addition, LPP simultaneously promotes consumer interest in insurance-related goods and services, the speaker added.

Additionally, OJK stated that it had actively participated in discussions to address various implementation issues, particularly with regard to formulating financial criteria for insurance companies that could participate in the program and types of products or insurance policies that could be guaranteed by the program. This was done to support the realization of the policyholder guarantee program.

As a requirement for participation in the program at the initiation stage, "OJK expects that all insurance companies can keep their financial health," he said in his conclusion.