The Indonesian Life Insurance Association (AAJI) has said that one measure introduced by the Financial Services Authority (OJK) to provide relief to policyholders during the COVID-19 pandemic may not be compulsory for insurers.
In a statement that was released yesterday in the names of Mr Budi Tampubolon, chairman of the association, and Mr Togar Pasaribu, its executive director, the AAJI says the OJK’s decision, to allow policyholders to postpone by four months the payment of insurance premiums that are due, is not mandatory for insurance companies.
The AAJI believes that insurers have a choice in this matter and that the decision to postpone due premium payments is to be taken by each insurance company.
Mr Budi says that the measure is only mandatory if the insurance company recognises premiums aged up to four months old as assets that are permitted in calculating the level of solvency.
The AAJI appeals to customers to always understand the provisions in their policies, including considering how deferred premium payments could affect the investment elements that have been taken into account in their financial plans.
The AAJI also says that overall, it welcomes the bundle of measures introduced by the OJK which aims to maintain the stability of the non-bank ginancial industry during the COVID-19 pandemic as well as the regulator’s support for the life insurance industry to continue to contribute to public health and welfare. These measures are set out in a circular issued by the regulator that became effective on 30 March.
In the statement, the association also asks the OJK to allow life insurers to market investment linked products (PAYDI) where face-to-face meetings between marketers and prospective customers can be replaced by the use of communication technology, that is, to allow direct digital meetings.
In this respect, the AAJI also requests that the OJK remove the requirement for a wet signature and replace it with a signature in digital or electronic form.
Mr Budi says that online meetings would be in accordance with the government’s advice about the need for physical distancing in the current COVID-19 pandemic.
In addition, the AAJI calls on member companies to continue recruiting new marketers so that the community would continue to obtain services for health and financial protection.
“This confirms the life insurance industry’s commitment to continue to contribute to job creation, even in difficult situations,” said the statement.