Indonesia’s New Health Insurance Rules Expected in Q2 2025, Regulator Reveals Key Provisions

JAKARTA, investortrust.id – Indonesia's financial regulator is finalizing a new set of guidelines for health insurance companies, aiming to strengthen industry governance and enhance service quality for policyholders. The new regulations are expected to be issued by the second quarter of 2025.

The Financial Services Authority, known locally as Otoritas Jasa Keuangan or OJK, is preparing a Circular Letter (Surat Edaran OJK, SEOJK) specifically for the health insurance sector. Ogi Prastomiyono, Chief Executive of Insurance, Guarantee, and Pension Fund Supervision at OJK, said the regulation will define clearer requirements for companies marketing health insurance, introduce stricter risk management practices, and promote better coordination with Indonesia’s national health insurance program BPJS Kesehatan through the Coordination of Benefits (CoB) mechanism.

"The health insurance SEOJK is currently being finalized and is expected to be issued in the second quarter of 2025," Ogi said in a written response to Investortrust on Friday, April 25, 2025.

The draft regulation outlines several important provisions. These include requirements for insurers to establish a medical advisory board composed of specialist doctors, redesign their insurance products to encourage more prudent use of health services, and adopt risk-sharing mechanisms such as co-payment structures.

Ogi emphasized that forming a medical advisory board is mandatory for both conventional and sharia-based insurance providers. The board will consist of specialists in fields relevant to the insurers' service offerings, ensuring medical services delivered to policyholders are appropriate and of high quality.

Furthermore, the revised regulation calls for insurers to align their product designs with prudential principles, including implementing risk-sharing features to encourage more responsible use of healthcare services.

As of February 2025, the health claim ratio stood at 45.42% for life insurers and 35.29% for general insurers, marking a significant improvement compared to previous years when claim ratios often exceeded 100%.

Ogi also highlighted a broader ambition for the insurance sector to deepen its role as a domestic institutional investor, which would strengthen Indonesia’s capital markets. However, he cautioned that such expansion must be pursued carefully to ensure investment strategies remain aligned with the insurance companies' product structures and maintain robust asset-liability matching practices.

In a notable adjustment, the latest draft of the SEOJK removes the previous cap on acquisition costs for health insurance products, which had been limited to a maximum of 10% of the premium. OJK made this change after considering feedback from industry stakeholders.