Jakarta. The Financial Services Authority (OJK) has clarified that mandatory vehicle insurance for motorcycles and cars, expected to start in January 2025, is not yet confirmed as the government has not established implementation regulations.

Previously, OJK's Chief Executive of Insurance Supervision, Ogi Prastomiyono, mentioned during a forum that mandatory insurance regulations must be in place by January 12, 2025, following the enactment of Law No. 4 of 2023 on Financial Sector Development and Strengthening (UU PPSK).

While UU PPSK requires implementing regulations within two years, it does not provide specific instructions for mandatory insurance. The law mandates a program to protect against certain risks, excluding basic protection programs with cross-subsidy mechanisms.

Ogi emphasized that the mandatory insurance program, including vehicle insurance, awaits a Government Regulation (PP) for legal and operational guidelines.

“OJK emphasizes that the mandatory insurance program, including vehicle insurance, is still awaiting the issuance of a Government Regulation (PP) as the legal framework for its implementation, such as the scope and effective date of the program,” Ogi said.

He did not specify the program's start date or other implementation details, which are still being drafted by the government and OJK.

UU PPSK's Mandatory Insurance provisions are detailed in Chapter VI, Article 39A. It includes programs like third-party liability (TPL) for traffic accidents, fire insurance, and disaster risk home insurance.

The government can establish mandatory insurance programs as needed, pending DPR approval. OJK will draft implementation regulations for the program once the government regulation is issued.

The TPL mandatory insurance program aims to reduce financial burdens from accidents and promote better driving behavior, providing increased protection and security for the public, which can also boost economic growth.

TPL insurance covers the policyholder against legal liabilities arising from accidents where their vehicle causes injury or damage to another person's property. This can include medical expenses, repair costs, or legal fees if the policyholder is sued.