OJK Mandates Spin-off of Sharia Insurance Units by 2026

Regulatory Compliance Drive

The Financial Services Authority (OJK) has confirmed that 29 insurance companies are set to spin off their Sharia business units by the end of 2026 ¹

²

Source 2

https://finansial.bisnis.com/read/20251215/231/1936865/sebanyak-29-unit-usaha-syariah-uus-asuransi-bakal-spin-off-pada-2026

. This regulatory mandate is part of the implementation of OJK Regulation Number 11 of 2023, which requires Sharia units to operate independently if they meet certain financial thresholds ²

Source 2

https://finansial.bisnis.com/read/20251215/231/1936865/sebanyak-29-unit-usaha-syariah-uus-asuransi-bakal-spin-off-pada-2026

.

Current Market Landscape

As of now, Indonesia has 16 full-fledged Sharia insurance companies, comprising 10 life insurance and 6 general insurance entities ¹

. The upcoming spin-offs are expected to increase the total number of Sharia insurance entities to 45 by December 2026. Ogi Prastomiyono, OJK's Executive Head of Insurance, Pension Funds, and Guarantee Supervision, stated that this development will create a more comprehensive Sharia financial ecosystem ¹

Source 1

https://finance.detik.com/moneter/d-8260501/29-perusahaan-asuransi-bakal-lepas-unit-syariah-tahun-depan

.

Regulatory Requirements

To be eligible for the spin-off, Sharia units must meet specific financial criteria, including having tabarru' and participant investment funds of at least 50% of the total insurance funds and achieving a minimum equity of Rp100 billion for insurance companies (Rp200 billion for reinsurance companies) ²

.

Industry Implications

While the spin-offs will expand the Sharia insurance sector, some companies have opted to return their Sharia business unit licenses. Ogi Prastomiyono noted that this consolidation is a natural market process as long as consumer services remain unaffected ²

.