The Financial Services Authority (OJK) of Indonesia held a meeting with insurance regulators recently, urging them to resolve disputes over unit-linked insurance plans (Ulips) according to the media. After the increased complaints by customers about Ulips, the meeting was held and attended by several representatives from the Indonesian Life Insurance Association (AAJI).
Riswinandi, chief executive of the Non-Bank Financial Industry Supervision Department of the OJK said, “If it is proven that there is a company error in selling insurance products, OJK will ask the company to fully compensate the customer for losses.” The company says that if the insurers and their customers cannot reach an agreement on the disputes involving Ulips, it offered assistance in mediation to resolve the problem.
OJK has also called for the companies to evaluate and improve the marketing model for unit-linked products and the importance of transparency of products. It is also considered equally important to ensure that the customers understand the complete benefits of the products, the costs charged, the risk of investments involved, procedures to claims, resolution of disputes and the rights and obligations of other policyholders. Also, the process of sales is to be documented with recordings.
The company also urged the customers to understand the profile risks of unit-linked products. The regulator plans to blacklist errant insurance agents violating regulations governing the sale of the same. The complaints from the consumers were mainly related to the investment returns from Ulips and the difficulty in making claims. It is said the business people should ensure that the agents do not ask consumers to sign any blank insurance application forms.