Rules Minimum Capital Insurance Rp 40 billion until 2010

Jakarta - The Capital Market Supervisory Agency and Financial Institution (Bapepam LK) decided to postpone the implementation of the rules the minimum insurance capital of Rp 40 billion.

"Increased capital starting from 2010, not 2008 anymore," said Chairman of Bapepam LK Fuad Rahmany in the building of the Ministry of Finance, Jakarta, Wednesday (31/12/2008).

Based on the provisions of the PP 39/2008 on Providing business companiesare, each insurance company must have minimum capital of Rp 40 billion at the end of this year.

According to Fuad, a minimum capital of Rp 40 billion of insurance is compulsory filled in the new year 2010. Furthermore, by 2012 should be increased to Rp 70 billion in 2014 and increased to Rp 100 billion.

"The reason for the global crisis so as to increase the capital they need the money now. Now we are in a crisis of liquidity, so it will be delayed to 2010 from 2008," he said.

According to Fuad, PP diteken the new president is a revision of the regulation that Bapepam has issued some time ago, namely the PP 39/2008 on the organization of business companiesare.

"This is the PP, so that the objective of insurance companies larger later the capital," said Fuad.

For a company that can not increase capital, Bapepam suggest they do consolidation.

"To be a stronger industry, so they really can underwrite the risks of insurance. We want the insurance company capital strong," he explained.

Rules minimum capital insurance by the end of 2008 to get the previous protests from the General Insurance Association of Indonesia. If the PP is not canceled, as many as 64 insurance companies could close and be feared impact on the reduction of around 5,000 employees.