New bancassurance regulations in Indonesia

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By Michael Daly, Paul Sinnott, Wing F. Wong | 02 March 2011

In December 2010, Bank Indonesia issued a circular to all commercial banks in Indonesia entitled "Application of Risk Management in Banks Which Conduct Joint Marketing Activities With Insurance Companies (Bancassurance)."

The circular sets out a comprehensive regulatory framework for bancassurance activities. This alert discusses the new regulations, which came into effect immediately and are likely to lead to fundamental changes to existing bancassurance models in Indonesia.