LPS Adds Special Commissioner for Policy Guarantee

Jakarta: Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS), Purbaya Yudhi Sadewa, said that LPS will change its organizational structure by adding Members of the Board of Commissioners (ADK) specifically for the Insurance Guarantee Policy Program (PPP) no later than 2027.
 
"It will be chosen no later than a year before 2028, but it could be earlier, depending on preparations and needs that arise in the coming years," said Purbaya, reported by Media Indonesia, Wednesday, June 21, 2023.
 
Purbaya explained that later the ADK election procedure for guaranteeing insurance policies would be chosen by the President, then proposed and decided by the House of Representatives (DPR).

"It's similar to BI and OJK, so the LPS has changed a bit, before it was just the president, now the president is going to the DPR. So, it's like getting promoted," he said.
 
This is in accordance with the LPS' mandate in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK), which adds to the authority of LPS in the realm of guaranteeing insurance policies.
 
Through the P2SK Law, in addition to guaranteeing banking, LPS is currently responsible for guaranteeing public funds at insurance companies. Purbaya said the Policy Guarantee Program (PPP) would begin implementation on January 12, 2028.
 
The other LPS mandates include placing funds in Banks Under Health (BDP) as well as exemption from certain LPS powers from the Limited Liability Company Law, the Banking Law and the Capital Market Law.
 
Purbaya assesses that the P2SK Law will strengthen the direction of coordination between authorities involved in the financial sector, namely the Ministry of Finance, Bank Indonesia, the Financial Services Authority (OJK) and LPS which are members of the Financial System Stability Committee (KSSK).
 
With this new mandate, the main function of LPS has also been expanded, which is currently an institution that guarantees deposits, guarantees policies, actively participates in maintaining Financial System Stability, carries out bank resolutions as well as liquidates insurance companies.
 
The P2SK Law is one of the laws with high urgency because it was born as a new milestone in Indonesia's financial sector reform for a more developed, inclusive and stable financial sector. (Kevin Schreiber)
 
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