LPS Urged to Focus on Reviving Troubled Insurance Companies

New Mandate Requires Comprehensive Approach

The Lembaga Penjamin Simpanan (LPS) has been tasked with implementing the new Policy Guarantee Program (PPP), which requires a comprehensive approach to handling troubled insurance companies. Insurance expert Irvan Rahardjo emphasized that LPS needs to be thoroughly prepared for this new responsibility.

Historical Challenges in Reviving Troubled Insurers

Rahardjo noted that historically, no troubled insurance company has successfully recovered. He drew parallels with the banking sector, where only a few banks have been successfully revived. This historical context underscores the complexity of the task ahead for LPS.

Expanded Role for LPS

The LPS is expected to not only focus on new insurance policies under the PPP but also help existing troubled insurance companies that are either in financial distress or undergoing liquidation. This expanded role requires careful planning and execution to ensure the stability of the insurance sector.

Market Implications

The success of this initiative could have significant positive implications for the insurance industry in Indonesia, enhancing policyholder confidence and potentially preventing further financial instability in the sector.