Ministry proposes 'grandfathering' in foreign ownership in insurance

Ministry proposes 'grandfathering' in foreign ownership in insurance

Finance Minister Sri Mulyani explained the results of her consultations with the House of Representatives Commission XI after attending the Working Meeting of the Commission with the Ministry of Finance in Jakarta, Tuesday (07/02/2019). (ANTARA/Katriana)

We will make a slight revision in the PP which was mentioned as the 80 percent ownership limit of the paid up capital
Jakarta (ANTARA) - The Ministry of Finance proposes "grandfathering" or excluding foreign investors from Government Regulation (PP) No. 14/2018 to continue to have insurance companies with shares above 80 percent.

"We will make a slight revision in the PP which was mentioned as the 80 percent ownership limit of the paid up capital," Finance Minister Sri Mulyani said at a Working Meeting of the Indonesian House of Representatives Commission XI with the Ministry of Finance on Tuesday.

Foreign parties that already have more than 80 percent shares in insurance companies would be given grandfathering or an exception from PP No.14 / 2018, the finance minister said.

The PP discusses foreign ownership in insurance companies that set a limit of 80 percent ownership of paid-in capital.

Foreign ownership that had received grandfathering and wanted to increase capital, would not have restrictions, the finance minister said in her presentation. In terms of a minimum of 20 percent, the additional capital must be sought by local partners.

There needs to be an increase in the presence of insurance funding to create a more insurance-minded mindset or the notion that insurance is important to them, the finance minister believed.

In addition, this increase would also be able to create a long-term source of funds within the government.

The development of long-term insurance will have a positive impact on the insurance industry in Indonesia, considered Sri Mulyani.

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