Update on OJK’s Policy Surrounding the Economic Slowdown Due to COVID-19 Outbreak

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OJK introduces another countercyclical policy under its regulation No. 14/POJK.05/2020 that came into force on 17 April 2020 (“POJK 14/2020”). This time, the stimulus is extended to the non-bank financial service institutions (lembaga jasa keuangan non-bank or “LJKNB”), which include insurance and reinsurance companies, pension fund, financing companies (e.g. leasing and multi finance companies) and other financial services institutions (such as pawnshop companies), and their debtors.

The countercyclical policy set forth under POJK 14/2020 aims to maintain financial stability, prevent further economic meltdown and encourage the optimization of LJKNB’s performance amidst the COVID-19 outbreak.

For this Legal Alert, Partner, Narada Kumara, with Associates, Febriantoro Suardy and Johanna Devi, will discuss the policy of the determination of financing quality and finance restructuring, calculation of the solvability level for the insurance and reinsurance companies, the deadline relaxation on LJKNB’s periodic reports submission, and the use of video conferences for fit and proper tests.

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