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News Flash: KPPU urges OJK to scrap minimum insurance premium tariff
JAKARTA: The Business Competition Supervisory Commission (KPPU) has just urged the Financial Services Authority (OJK) to scrap the latterâs ruling for a minimum insurance premium tariff in order to allow for healthy competition among insurance industry players
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AKARTA: The Business Competition Supervisory Commission (KPPU) has just urged the Financial Services Authority (OJK) to scrap the latter's ruling for a minimum insurance premium tariff in order to allow for healthy competition among insurance industry players.
KPPU chairman Nawir Messi explained that the minimum insurance premium tariff would stifle competition among insurance companies, as they would have relatively similar minimum premium tariffs. This will be detrimental to customers as they do not have the chance to find competitive rates.
He further said that his organization had received a number of complaints related to the increase of motor vehicle and property insurance premiums, as well as for insurance coverage on special risks like floods, earthquakes, volcanic eruptions and tsunami.
This hike was caused by a circular issued by OJK in 2013 on insurance premium tariffs for the respective insurance coverages.
'In the circular, OJK set a new minimum insurance premium tariff for 2014 that is 300 percent higher than [last year's] minimum insurance premium tariff,' Nawir added.
