LPS proposes Rp500 million limit for insurance policy guarantee program

The Indonesia Deposit Insurance Corporation (LPS) has proposed a cumulative maximum guarantee of Rp500 million per insured person under its upcoming Policy Guarantee Program (PPP). According to LPS Commissioner Ferdinan D. Purba, this limit is designed to cover approximately 97% to 99% of all insurance policies and policyholders.

The Rp500 million limit applies cumulatively across three types of obligations: paying matured claims, paying the policy value if a policy cannot be continued, and transferring policies to other insurance companies. Purba noted that this figure was determined by comparing it to international benchmarks and local economic indicators, stating the amount is roughly six times the GDP per capita.

During a working meeting with Commission XI of the Indonesian House of Representatives (DPR RI), lawmaker Anna Muawanah emphasized that strengthening policy guarantees is vital to restoring public trust in the insurance industry. She highlighted that because insurance involves paying funds upfront for future benefits, certainty of protection is essential to mitigate concerns regarding fund security and long-term financial goals, such as education savings.