The transfer of risk to the State Need Regulated

Insurance and reinsurance industry asked the Financial Services Authority (FSA) rules tighten the transfer of risk to reinsurers abroad. The current rules of the PMK No. 53/2012 on Health Insurance and Financial Reinsurance mention liability risk transfer reinsurance companies in the country for any business.

Article 22 states the general insurance companies must obtain reinsurance from two reinsurers in the country, one of which is a reinsurer, while the insurance company shall divide the risks to a minimum of one reinsurance company in the country. Firdaus Djaelani, Chief Executive of the Financial Industry Supervision of Non Bank (FSA) said the FSA will soon make a legal framework to regulate the obligation to maximize reinsurance capacity in the country.

In addition to the rules regarding the retention obligations in the country hold FSA will also create another rule to increase the capacity of local reinsurance industry, the insurance industry in order to make the most of reinsurance capacity in the country to reduce the reinsurance premiums flowing to the outside (capital flight), which causes minus the trade balance.

At the beginning of the early stages of FSA will set limits for reinsurance It's a small business with coverage such as motor insurance, personal accident and life insurance. Business lines with coverage such as insurance aircraft (aviation), a framework ships (marine hull), and oil and gas will still be given the opportunity to purchase reinsurance abroad.