Consumer Protection Regulations in Life Insurance industry and its challenges: An empirical analysis from Indonesia
Keywords:Consumer Protection, Life Insurance, Regulation, Disclosure.
Trust is a crucial factor in the financial industry. Some financial scandals that had impacted Indonesia include the economic crisis in 1998 and have encouraged the regulator to apply adequate consumer protection for the people of Indonesia. In addition, the existence of adequate consumer protection will have a direct impact on the Indonesian financial industry, especially the life insurance sector where the penetration rate is still low in the last 10 years. In the Indonesian context, the implementation of consumer protection is immature and inconsistent. Based on empirical research, this paper explored the existing conditions of consumer protection implementation across life insurance industry in Indonesia. Moreover, this paper also analyzed the perception of the benefits and the challenges in implementing such requirements. The study found that consumer protection is still at the work in progress stage, inconsistent and not optimally implemented although there are number of benefits and risks if it were implemented as required. This condition has arisen due to the lack of regulatorâ€™s commitment in the consistent implementation, lack of assurance on the quality, improper selling process, as well as limitations in capability and competence in the appointed dispute resolution body. This study suggests a number of actions:  Periodic regulator quality assurance for the quality of implementation in the form of assurance review and sanctions impose;  strengthening the need based selling for life insurance companies;  developing an effective and measurable financial literacy and financial inclusion programs for consumers;  building a life insurance product and process related competency and capability of the arbitrator and mediator from the appointed dispute resolution; and  establishing awareness and the existence of the dispute resolution body across cities in Indonesia.
 Otoritas Jasa Keuangan (2011). Undang undang no 21 tahun 2011 tentang Otoritas Jasa Keuangan. from http://www.ojk.go.id/id/regulasi/otoritas-jasa-keuangan/undang-undang/Pages/undang-undang-nomor-21-tahun-2011-tentang-otoritas-jasa-keuangan.aspx.
 Suryowati, Estu (2017). Rata-rata Belanja Asuransi Masyarakat Indonesia Capai Rp 1,29 Juta per Tahun, from http://ekonomi.kompas.com/read/2017/04/02/171500726/rata-rata.belanja.asuransi.masyarakat.indonesia.capai.rp.1.29.juta.per.tahn
 Otoritas Jasa Keuangan (2017). Peraturan No. 12/POJK.01/2017 tentang Penerapan Program Anti Pencucian Uang dan Pencegahan Pendanaan Terorisme di Sektor Jasa Keuangan. from http://www.ojk.go.id/id/regulasi/otoritas-jasa-keuangan/peraturan-ojk/Pages/POJK-Nomor-12-POJK.01-2017-.aspx.
 Kulsum, U. (2018). Aset IKNB capai Rp 2,064 triliun di Juli. Retrieved from https://keuangan.kontan.co.id/news/aset-iknb-capai-rp-2064-triliun-di-juli.
 Investor Daily (2013). OJK perkuat perlindungan konsumen asuransi, from http://sp.beritasatu.com/ekonomidanbisnis/ojk-perkuat-perlindungan-konsumen-asuransi/37942.
 Otoritas Jasa Keuangan (2013). Peraturan OJK No.1/POJK.07/2013 Tentang Perlindungan Konsumen Sektor Jasa Keuangan. from http://www.ojk.go.id/id/kanal/edukasi-dan-perlindungan-konsumen/regulasi/peraturan-ojk/Pages/POJK-Perlindungan-Konsumen.aspx.
 The World Bank. (2009). Good Practices for Consumer Protection and Financial Literacy in Europe and Central Asia: A Diagnostic Tool [Ebook] (p. 9). Retrieved from HYPERLINK "http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/GoodPractices_ConsumerProtection_Sep09.pdf" http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/GoodPractices_ConsumerProtection_Sep09.pdf .
 Kitab Undang Undang Hukum Dagang (KUHD), article 251. Kementrian Hukum dan Perdagangan, from http://bppt.jabarprov.go.id/assets/data/arsip/KUHD_new_version.pdf
 Mediatama, G. (2018). BMAI: Penanganan klaim asuransi belum memuaskan. Retrieved from https://keuangan.kontan.co.id/news/bmai-penanganan-klaim-asuransi-belum-memuaskan.
 R, M. (2018). Dirut Allianz Jadi Tersangka, Polisi: Asuransi Minta Rekam Medis. Retrieved from https://news.detik.com/berita/d-3660117/dirut-allianz-jadi-tersangka-polisi-asuransi-minta-rekam-medis.
 UU Perlindungan Konsumen Perlu Disempurnakan. (2018). Retrieved from: http://www.mediaindonesia.com/read/detail/120579-uu-perlindungan-konsumen-perlu-disempurnakan.
 Mediatama, G. (2018). OJK: 24% pengaduan konsumen berasal dari asuransi. Retrieved from https://keuangan.kontan.co.id/news/ojk-24-pengaduan-konsumen-berasal-dari-asuransi.
 Primadhyta, S. (2018). Industri Asuransi Minta Penjelasan Keterbukaan Data Nasabah. Retrieved from https://www.cnnindonesia.com/ekonomi/20170519110515-78-215915/industri-asuransi-minta-penjelasan-keterbukaan-data-nasabah.
 Hafiz, M. (2018). Seperti Apa Industri Asuransi pada 2018?. Retrieved from http://marketeers.com/seperti-apa-industri-asuransi-pada-2018/
View Full Article:
How to Cite
LicenseAuthors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under aÂ Creative Commons Attribution Licensethat allows others to share the work with an acknowledgement of the work''s authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal''s published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (SeeÂ The Effect of Open Access).