LPS prepares insurance policy guarantee program with strict health criteria

The Indonesia Deposit Insurance Corporation (LPS) is preparing to activate an insurance policy guarantee program, with a target launch in July 2027 and a legal deadline of January 2028. Unlike the banking sector guarantee established after the 1998 crisis, this program will not grant automatic membership to all companies.

To ensure industry stability, LPS has established strict health requirements for participating insurance companies. Applicants must maintain a minimum Risk-Based Capital (RBC) ratio of 120 percent and must not be under special supervision by the Financial Services Authority (OJK).

LPS Commissioner Ferdinan D. Purba noted that the membership selection process is a critical and sensitive phase. Because membership is not automatic, some companies may be rejected if they do not meet the financial health criteria. Companies that currently fail to meet these standards may apply for membership once they satisfy the requirements.