41 Insurance Companies Seek To Separate Sharia Business Divisions

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41 Insurance Companies Seek To Separate Sharia Business Divisions

, 15 Dec 2024

The Financial Services Authority (OJK) has reported that 41 insurance and reinsurance companies have submitted their Islamic Business Unit Separation Work Plans (RKPUS). This submission aligns with the provisions outlined in Article 9 of OJK Regulation (POJK) No. 11 of 2023 regarding the separation of Islamic Business Units (UUS) within the insurance and reinsurance sectors. Mirza Adityaswara, the Deputy Chairman of the OJK Board of Commissioners, stated that the process of separating the Islamic business units is proceeding in accordance with regulations. "A total of 41 insurance/reinsurance companies have submitted their RKPUS," Mirza remarked during a press conference following the OJK Board of Commissioners Meeting (RDK OJK) in Jakarta.

As an example, one Islamic unit from a life insurance company has received a business license as a new Islamic life insurance entity. The next step involves transferring the portfolio from the Islamic unit to this newly established Islamic life insurance company. Meanwhile, an Islamic unit from a general insurance company has successfully transferred its portfolio to an existing Islamic insurance firm.

The OJK has issued various regulations, including SEOJK No. 15/SEOJK.03/2024, which governs Sharia Governance for Islamic Commercial Banks and Islamic Business Units (UUS). This regulation aims to oversee the implementation of POJK Sharia Governance, particularly concerning the roles and responsibilities of the Sharia Supervisory Board (DPS), Sharia compliance functions, Sharia risk management, as well as internal audits and external reviews. The SEOJK on UUS BUS Sharia governance also aligns self-assessment reports with governance standards applicable to commercial banks. Consequently, the OJK is striving to establish a more integrated and effective governance framework within the Islamic financial sector.

Mirza further noted that the growth trend in the Islamic financial industry continues to exhibit positive developments. One indicator of this progress is the Islamic Stock Index (ISSI), which has increased by 2.26 percent year-to-date (ytd). Additionally, the performance of intermediation in the Islamic financial services sector has shown solid annual growth, with financing activities expanding significantly. (ferry@insightinnews.com)

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