Indonesia Insurance Information

CIA link to demographic/economic data on Indonesia

General Indonesia Insurance Information

• Compulsory Insurance:
  
  1. Workers’ Compensation (ASTEK - compulsory for firms with more than 25 employees);
  2. Third Party Automobile Liability;
  3. Passenger accident.
• Non-Admitted Insurance:
  Prohibited.
• Policy Wordings & Rates / Tariffs Controlled:
  All compulsory and fire insurance.
• Policy Language:
  Indonesian and English.
• Types of Insurance Restricted to Government Institutions:
  All compulsory coverages.
• Policy Currency:
  Indonesian rupiah (IDR). U.S. $ insurance (and other currencies) are available.
• Currency Restrictions / Exchange Controls:
  All claim payments and reinsurance transactions are subject to the Reserve Bank of India. Rupiah foreign transfers above a specified amount require Central Bank approval.
• Policy Period:
  Annual. Long Term Agreements (LTAs) are available for 5 year periods with a 10% discount.
• Cancellation Provisions:
  30 days written notice.
• Premium Tax, etc. paid by reinsures: 2.5% - double check as there is some confusion.
• Insurance Companies:
  The Insurance Council of Indonesia requires membership for all Insurers. 100% foreign ownership is allowed.
• Brokers:
  Agents and Brokers operate throughout Indonesia
• Brokerage Commissions:
  Usually 15%. Marineand Automobile are slightly higher (e.g., 25%). Commissions can be paid to unlicensed Brokers.
• Broker of Record Letters:
  Accepted. A good business housekeeping practice.
• Reinsurance:
  All Insurers must cede 12.5% of any and all risks to the State Reinsurance Monopoly. Once the local market capacity is exhausted, foreign reinsurance cessions are allowed.
• Local Natural Hazards:
  Earthquake, Volcanic Eruption.
• Other Information:
  

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning, aircraft, explosion. Earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact are available in the market for an additional premium charge. Weight of snow / avalanche are not available.
• All Risk:
  Available for Builders Risk, Contractors Equipment and Machinery Installation.
• Coinsurance:
  100%.
• Blanket Insurance:
  Available.
• Business Interruption:
  UK Loss of Profits and US Gross Earnings available. Indigenous companies rarely purchase the coverage.
• Replacement Cost:
  Available but Actual Cash Value (ACV) more common.
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  UK and U.S. Inspections required by law.

General / Public Liability

• Available Wordings:
  Comprehensive General and UK Public Liability including Product Liability (no Product Recall available). Defense costs included within the limit.
• Comments:
  Defense costs are included within the limit. Policies can be issued on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  Rp 1,000,000.
• Comments:
  Insured and any licensed individual driving with Insured’s permission and not under the influence of drugs or alcohol are covered under the policy. Passengers are not considered to be Third Parties; however, coverage can be endorsed for an additional premium. Excess Liability insurance is available in the private market. Primary coverage is compulsory.

Workers’ Compensation

• Comments:
  The compulsory coverage must be insured with the Government Company, ASTEK, and applies to all employees (of either State-owned or Private firms employing more than 25). Extra-Territorial Benefits are not available under the Scheme. Medical Expenses and Occupational Disease Benefits are included. Employees have no right to sue.

Marine

• Available Wordings:
  The Institute of London Underwriters forms. War Risks rates follow London scale.

Crime

• Available Coverages:
  Various UK and U.S.