OJK: Mandatory Vehicle Insurance Not Yet Set for January 2025
Jakarta. The Financial Services Authority (OJK) has issued a clarification regarding the anticipated mandatory vehicle insurance program, which was initially expected to commence in January 2025. According to the OJK, this implementation date is not yet confirmed, as the necessary government regulations have not been finalized.
OJK’s statement follows previous announcements by Ogi Prastomiyono, the Chief Executive of Insurance Supervision, who had mentioned a target implementation date of January 12, 2025. This timeline was based on Law No. 4 of 2023 on Financial Sector Development and Strengthening (UU PPSK), which mandates the creation of implementing regulations within two years of its enactment.
While the UU PPSK outlines the requirement for mandatory insurance programs to protect against certain risks, it does not provide specific instructions for vehicle insurance. The law also excludes basic protection programs with cross-subsidy mechanisms.
A handout photo from the police shows the wreckage of a burned Nissan GTR car after an accident that kills Deputy Attorney General Arminsyah on the Jagorawi toll road near Jakarta on Saturday afternoon. (B1 Photo)
Ogi Prastomiyono emphasized that the mandatory vehicle insurance program, like other mandatory insurance programs, is contingent on the issuance of a Government Regulation (PP). This regulation will provide the legal framework and operational guidelines, including the scope and effective date of the program.
“OJK emphasizes that the mandatory insurance program, including vehicle insurance, is still awaiting the issuance of a Government Regulation (PP) as the legal framework for its implementation, such as the scope and effective date of the program,” Ogi said.
He further clarified that the government and OJK are currently drafting the finer details of the program, including its specific commencement date and other implementation details, leaving the January 2025 date uncertain.
The mandatory insurance provisions within UU PPSK are detailed in Chapter VI, Article 39A. This includes programs such as third-party liability (TPL) for traffic accidents, fire insurance, and disaster risk home insurance. The government is authorized to establish mandatory insurance programs as needed, subject to approval by the House of Representatives (DPR).
Once the government regulation is issued, the OJK will be responsible for drafting the implementing regulations for the program. The TPL mandatory insurance program aims to lessen the economic burden resulting from accidents, promote better driving practices, and offer better protection for the public, which is also expected to spur economic growth.
TPL insurance provides coverage for policyholders against legal liabilities arising from accidents where their vehicle causes injury or damage to another person’s property. This includes provisions for medical expenses, vehicle repair costs, and legal fees in the event of lawsuits.
