Ratifying ASEAN protocol can help expand sharia insurance market

Ratifying ASEAN protocol can help expand sharia insurance market

Minister of Finance, Sri Mulyani Indrawati, during a joint meeting of Commission XI of the House of Representatives in Jakarta on Monday. (ANTARA/ a screenshot from Youtube DPR RI/pri) 

Jakarta (ANTARA) - Finance Minister Sri Mulyani Indrawati has said Indonesia needs to ratify the seventh protocol on financial services of the ASEAN Framework Agreement on Services (AFAS) to benefit from potential cooperation, especially in general sharia insurance.

AFAS forms the foundation of the process for integrating the service sector in ASEAN, including financial services, which plays an important role in the economy, contributing 52 percent of the total ASEAN GDP in 2019.

“This (ratification) does not require any changes in the existing Indonesian regulations,” the minister said at the joint meeting of Commission XI of the House of Representatives in Jakarta on Monday.

Sri Mulyani said that by ratifying the seventh protocol of AFAS, the Islamic insurance industry in the country would have the opportunity to develop through increased investment and competition.

Not only that, the growth of the sharia general insurance industry in Indonesia will also expand protection and encourage financial market deepening, she noted.

Through the ratification of the seventh protocol, Indonesia can also take advantage of the expansion of market access that ASEAN partner countries have committed to, she pointed out.

She advised ratifying the protocol, emphasizing the granting of permission for ASEAN investors to open general insurance services, both conventional and sharia, with a foreign ownership limit of 80 percent, as per existing regulations.

This would be in accordance with law (UU) Number 40 of 2014 concerning Insurance and government regulation (PP) Number 3 of 2020 concerning amendments to PP 14 of 2018 concerning Foreign Ownership in Insurance Companies. (INE)

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