HOW TO BECOME A COMMISSIONER IN AN INDONESIAN INSURANCE COMPANY: COMPLETE REQUIREMENTS FROM OJK!

The Board of Commissioners in a company, as referred to in Law Number 40 of 2007 concerning Limited Liability Companies, is a corporate organ responsible for conducting general and/or specific supervision in accordance with the articles of association, and for providing advice to the Board of Directors. However, in the context of insurance companies, the provisions regarding Commissioners are more stringent and detailed, as this industry falls under the financial services sector, which is strictly supervised by the Financial Services Authority (OJK).
The requirements and provisions applicable to Commissioners in insurance companies are primarily regulated under:
1. Financial Services Authority Regulation No. 73 of 2016 concerning Good Corporate Governance for
Insurance Companies as amended by Financial Services Authority Regulation No. 43 of 2019 ("FSAR
73/2016")
2. Financial Services Authority Regulation No. 27 of 2016 concerning Fit and Proper Assessment for
Principal Parties of Non-Bank Financial Institutions as partially revoked by Financial Services Authority
Regulation No. 35 of 2024 ("FSAR 27/2016")

Requirements for the Appointment of Commissioners
According to Article 14 of FSAR 73/2016, insurance companies are prohibited from appointing candidates for the Board of Commissioners who have:
a. caused an insurance company to be subject to business activity restrictions within the past 3 years;
b. caused a financial services company to have its business license revoked due to violations within the
past 3 years; or
c. caused a financial or non-financial company to be declared bankrupt within the past 5 years prior to the candidate’s proposed appointment.

Furthermore, under Articles 23 and 24 of FSAR 73/2016, candidates for the Board of Commissioners are prohibited from concurrently holding positions in another insurance company with the same line of business, and must not be active employees or officials of OJK. Former OJK employees or officials may only be appointed as Commissioners after a cooling-off period of at least six (6) months from their resignation from OJK.

Nationality and Ownership
Pursuant to Article 19 paragraphs (5) and (6) of FSAR 73/2016:
a. If all company owners are Indonesian Citizens (WNI) or Indonesian legal entities majority-owned by WNI, then all members of the Board of Commissioners must be WNI.
b. If there is foreign ownership, the Board of Commissioners may consist of both WNI and Foreign Citizens (WNA), or be entirely WNI.

General Criteria for Commissioners
Under Article 20 paragraph (2) of FSAR 73/2016, candidates for the Board of Commissioners must:
a. obtain approval from OJK;
b. have relevant knowledge in the company's line of business;
c. act in good faith, with honesty, professionalism, and independence;
d. prioritize the interests of the company and policyholders over personal interests;
e. be able to avoid the misuse of authority for personal gain.

Independent Commissioners
Articles 31 and 33 of FSAR 73/2016 impose additional requirements for Independent Commissioners:
a. must not have an affiliation with the Board of Directors, other Commissioners, the Sharia Supervisory Board (DPS), or shareholders;
b. must not have served as a Director, Commissioner, or a position one level below Director within the last 6 months;
c. must understand insurance regulations and the company’s financial condition;
d. must be an Indonesian citizen and domiciled in Indonesia;
e. must not concurrently serve as an Independent Commissioner in another insurance company with the same line of business.

Fit and Proper Assessment
Article 3 of FSAR 27/2016 states that OJK evaluates the integrity, competence, and financial reputation of Commissioner candidates. Integrity includes:
a. legal capacity;
b. good morals and character (no criminal convictions);
c. commitment to legal compliance and support for OJK policies;
d. commitment to the development of Financial Services Institutions (LJK);
e. not being among those prohibited from holding office.
Financial reputation (Article 6 FSAR 27/2016) includes:
a. no history of non-performing loans;
b. never having been declared bankrupt or responsible for the bankruptcy of a company within the past 5 (five) years.
Financial soundness must be evidenced by:
a. good financial reputation;
b. financial capability to support the LJK’s business;
c. commitment to provide support if the LJK faces financial difficulties.

Assessment Procedure
1. Candidates cannot be proposed if they are undergoing legal proceedings, are under another OJK assessment, or if there are indications of issues with integrity, reputation, or competence.
2. Applications must be submitted by the owner, founder, or the LJK’s Board of Directors through electronic means.
3. Candidates must present their development strategies and crisis management plans for the LJK.
4. OJK will issue an assessment result within a maximum of 30 working days from the date of complete document submission.
5. OJK approval becomes void if the appointment (via General Meeting of Shareholders/GMS) is not carried out within a specified period after approval.

Through these comprehensive requirements, OJK aims to ensure that members of the Board of Commissioners in the insurance sector possess the competence, integrity, and independence necessary to effectively oversee management and safeguard the interests of policyholders and other stakeholders.