The Governance and Demutualisation of Mutual Insurance in Indonesia

Abstract

This paper outlines international best practice in terms of the governance of mutual insurance companies, the key drivers of demutualisation and its implications. It examines demutualisation as a possible option for Indonesia’s AJB Bumiputera 1912, following its poor performance in recent years. It also provides relevant insight on governance issues and the demutualisation process within the context of the regulatory and supervisory framework for Indonesia Insurance Act No. 40/2014.Tulisan ini menguraikan praktik terbaik di dunia internasional dalam hal tata kelola perusahaan asuransi usaha bersama, factor-faktor apa saja yang dapat menjadi pendorong utama demutualisasi dan implikasinya yang dapat ditimbulkan dari kebijakan demutualisasi tersebut. Tulisan ini mengkaji demutualisasi sebagai pilihan yang mungkin untuk AJB Bumiputera 1912 di Indonesia, menyusul kinerjanya yang kurang baik dalam beberapa tahun terakhir. Tulisan ini juga memberikan wawasan yang relevan mengenai isu-isu tata kelola dan proses demutualisasi di Indonesia dalam kerangka peraturan dan pengawasan Undang-Undang No. 40 Tahun 2014 tentang Asuransi.

Principles Of Appropriateness In The Indonesian Insurance Legal System: Study On Demutualization In The Globalization Flow.

“…They collect insurance funds and manage the company together for mutual benefit for their welfare as members and owners of the company, while demutualization is the process by which a mutual company turns into a stock company. Hanifah (2017) state that mutualization is a legal breakthrough to restructure mutual companies by changing the legal entity form to a limited company. Hariyani (2011) state this method is commonly used in America and Japan.…”