The Financial Services Authority (OJK) has announced a delay in the implementation of mandatory third-party liability (TPL) insurance for motor vehicles, originally slated to begin in January 2025. The postponement is due to the OJK awaiting the issuance of a related government regulation.
OJK has not yet provided a specific timeline for when this regulation will be released. The requirement for the insurance program is mandated under Law No. 4 of 2023, also known as the Law on the Development and Strengthening of the Financial Sector (UU P2SK). Once the government regulation is finalized, OJK will collaborate with the government to move forward with the initiative.
“Currently, TPL insurance is only required for vehicles financed through loans from banks or multi-finance companies. For vehicles not financed by loans, the requirement will depend on the Government Regulation. We are awaiting the issuance of that regulation, and OJK will take action accordingly,” stated Ogi Prastomiyono, OJK’s Chief Executive for Insurance, Guarantee, and Pension Fund Supervision.
The mandatory insurance provisions are detailed in Chapter VI, Article 39A of UU P2SK. The program encompasses third-party liability (TPL) insurance for traffic accidents, fire insurance, and disaster risk home insurance. Ultimately, the TPL insurance program aims to alleviate the financial burden resulting from accidents and promote safer driving habits. It is expected to boost public protection and security, potentially contributing to economic growth.
