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OJK to tighten rules for unit-linked insurance
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A resident walks past the Papua office of the Financial Services Authority (OJK) in Jayapura on Oct. 27, 2021. The OJK has branch offices across the country. (Antara/Indrayadi TH)
T
he Financial Services Authority (OJK) will tighten rules on investment-linked insurance as the agency seeks to prevent future problems with regard to the products.
The new rules will pertain to products involving unit-linked investment, including marketing, fund management and the requirements insurance companies must meet to sell such products.
“By strengthening the regulations, we aim to minimize marketing problems, particularly those [causing] misunderstanding among consumers about unit-linked products; and to [get] insurance companies to improve their governance and risk management,” OJK commissioner Riswinandi said in a statement on Sunday.
Unit-linked insurance products have come in for criticism among many policyholders due to promises of high returns, misselling and alleged fraud in the marketing process amid low consumer literacy about the products and the insurance industry as a whole.
Many policyholders – apparently unaware of the fluctuating nature of investments managed by insurance companies – have demanded reimbursement of money they lost in unit-linked funds.
Some said they had not been informed about the risks by the insurance agents selling them the products.
Read also: Indonesians disgruntled over unit link insurance
