Indonesia bumps up minimum equity requirement amidst financial dilemma: Report

The new rules also require a minimum investment of IDR1t for starting new insurance businesses.

Indonesia has increased the minimum equity requirement for insurance companies to IDR250b ($16.1m) by 2026, a 67% hike from the earlier IDR150b, in response to recent policy defaults, Reuters reported.

The Financial Services Authority (OJK) announced plans to further raise this minimum to between IDR500b and IDR1t by 2028. 

This decision aims to bolster the sector's resilience and stability against economic crises.

READ MORE: Indonesia raises minimum equity of insurance firms to at least $16 mln by 2026

The change follows financial difficulties faced by several insurance firms, including state-owned Asuransi Jiwasraya, military officers' insurer Asabri, and one of the oldest insurers, Bumiputera, due to a surge in unpaid claims. 

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The new rules also require a minimum investment of IDR1t for starting new insurance businesses.

Additionally, the OJK has increased the minimum capital for reinsurance firms to IDR500b for 2026, with plans to raise it to IDR2t by the end of 2028, up from the previous IDR300b requirement.