The history of insurance in Indonesia started from the Dutch colonial era, the Japanese colonial era, and post-independence (modern). In addition, there is also a sharia insurance journey in Indonesia which began in the 1990s. In this article, the newbie will dissect important events in the establishment of insurance in Indonesia, both conventional insurance and sharia insurance.
History of Conventional Insurance in Indonesia
As already mentioned, insurance travel in Indonesia can be grouped into three periods, namely the Dutch colonialism, Japanese occupation and post-independence until the modern era. Here are some important events to understand from each period.
1. Insurance during the Dutch Colonial Period
Initially, insurance developed rapidly on the European continent. It was the Dutch who brought the insurance business to Indonesia in the 1800s.
Unlike European countries, the insurance company founded by the Dutch in Indonesia is prioritized for the elite and the Dutch themselves. This is because insurance is only intended to support trade and business interests.
The Dutch colonial government established a company general insurance , namely loss insurance in the trade and plantation sectors, named Bataviasche Zee End Brand Asrantie Maatschappij in 1843. This insurance only provides protection against all risks caused by fire and the risk of transporting commodities.
Then in 1853, it was followed by the establishment of a general insurance company called NV Assurantie Mij Nederlansche Lloyd and the general insurance company Assurantie Mij Langeyeld Schroeder and Assurantie Mij Blom van der Aa.
It didn't stop there, NV Assurantie Mij Nederlansche Lloyd also opened a branch which focused on taking risks due to the fire in 1916 to be exact on September 1st. This insurance subsidiary is named Indische Lloyd, whose name we can still hear today, namely PT Lloyd Indonesia. That was the beginning of the first fire insurance in Indonesia.
2. Insurance during the Japanese Occupation
The Japanese occupation of Indonesia began in 1942. At the same time the world was in turmoil because of World War II. This great war made the world economy chaotic, and Indonesia was no exception.
The state's financial condition became so bad that many companies went bankrupt. It is undeniable, many insurance companies are also out of business.
The only insurance company that survived the bad economic conditions was OL Mij Boemi Poetera. Because the name is still Dutch, the Japanese government changed it to Tanggoeng Djiwa Boemi Poetera Company (PTD Boemi Poetera). PTD Boemi Poetera, which we now know better as Bumi Putera insurance company.
3. Insurance in the Post-Independence Period of Indonesia to the Present
Post-independence Indonesia, insurance began to develop and can be felt by the general public. With the important event, namely the nationalization of a Dutch company into a company owned by the Indonesian government, it turned out that after independence there were also insurance mergers in Indonesian territory.
An example is the merger of PT Asuransi Bendasraya and PT General Internasional Underwriters to become PT Asuransi Jasa Indonesia or who is now more familiar with Asuransi Jasindo.
Not only that, for the welfare of the people, the Indonesian government has created new companies engaged in the insurance sector such as Asuransi Jasa Rahardja (which focuses more on the risk of traffic accidents), Perum Taspen (insurance and savings for civil servants), Perum Asabri (insurance for AKABRI) , and Jamsostek (private company employment insurance).
The 1980s were the beginning of the emergence of modern insurances in Indonesia. Some of them that are still well known today include AIA Financial, Allianz, CIGNA, Avrist AXA Mandiri, Sinarmas Insurance , and Prudential.
These insurances are no longer focused on just one protection, but have many protections offered. There is even insurance that offers investment products.
During the administration of President Susilo Bambang Yudhoyono, in 2014, the government proved its performance in serving the community, especially in the field of life protection by establishing the Social Security Administering Body, which is social insurance . Currently, the products are better known as BPJS Health and BPJS Employment. BPJS currently replaces Askes and Jamsostek which were valid in the previous period.
Regulations About Insurance
The Indonesian government takes seriously the development of the domestic insurance industry. This is evidenced by the existence of insurance law that regulates its implementation. Here are five basic insurance laws in Indonesia that you must know.
1. Law No. 2/1992 on Insurance Business was changed to Law No.40/2014
Insurance Law This is often used as the basis for several stipulations of regulations regarding insurance that apply in Indonesia, it is the main legal basis that regulates and determines all insurance activities.
It contains more regulations regarding the insurance business. The basis for the formation of this law is as a manifestation of a just and prosperous society in accordance with the mandate of Pancasila and the 1945 Constitution.
This law considers that insurance is one of the efforts in tackling certain risks faced by the community as well as playing a role in collecting funds from the community.
2. KUHP (Book of Civil Law) Article 1320 and Article 1774
Furthermore, for Law Article 1320 of the Civil Code and Article 1774 states that insurance contains elements of an agreement between the two parties therein.
Because it contains elements of the agreement, it will be included in the scope of criminal law, as part two of the Criminal Code explains the chapter on the conditions for the occurrence of a valid agreement.
Article 1320 states that "For the validity of the agreement, four conditions are needed, namely the agreement of those who bind themselves, the ability to make an engagement, a certain subject matter, and a cause that is not prohibited."
3. KUHD (Book of Commercial Law) Chapter 9 Article 246
The general explanation related to article 246 has similarities with the contents of Law No. 2 of 1992. It is stated in Chapter 9 of the KUHD the provisions regarding the type of coverage from insurance, the maximum limit of coverage provided by insurance, the applicable procedural coverage process, the cause of the cancellation of the insurance process, and the coverage is compiled in writing in a deed or insurance policy.
4. Government Regulation Number 73 of 1992
Government Regulation Number 73 of 1992 discusses the provisions governing the implementation of insurance business. Government regulations are formed on the basis of insurance objectives which in principle are able to encourage the growth of Indonesia's national development.
This insurance business activity must run in accordance with what is stated in the applicable law and regulate insurance companies in Indonesia so that they can develop properly. In addition, it must be based on the foundation and principles of a healthy and responsible business.
5. Government Regulation Number 63 of 1999
This is the first amendment of Government Regulation Number 73 of 1992. The objectives contained in Government Regulation Number 63 of 1999 also have similarities with the previous regulation, which is related to the implementation of insurance business.
With the formation of this government regulation, it becomes the basis for the development of insurance business activities which continue to experience changes, as well as changes in the national economic situation. This has also led to the need for adjustments to the existing regulations for implementing the insurance business.
History of Sharia Insurance in Indonesia
Sharia insurance is a business that aims to protect each other and help each other through people or parties through investment in the form of assets and/or tabarru '. These business activities provide a pattern of return to face certain risks through an agreement (alliance) in accordance with Islamic sharia. However, the benefits of sharia insurance are almost the same as the benefits of conventional insurance. In other words, you will get the same protection based on Islamic principles.
Family Takaful Insurance is a pioneer of sharia life insurance company in Indonesia which has been operating since 1994. Takaful Insurance develops various products to meet the needs of sharia-compliant insurance including life protection, health protection, children's education planning, retirement planning, as well as being the best partner in investment planning.
The difference with conventional insurance is that sharia insurance activities are carried out in accordance with Sharia principles, including:
- The existence of the principles of justice ('adl), trustworthiness (trust), balance (tazawun), welfare (maslahah), and universality (syumul)
- Does not contain things that are forbidden, such as uncertainty or obscurity (gharar), gambling (maysir), interest (riba), persecution (zhulm), bribery (risywah), immorality, and haram objects
Thus the discussion of the history of insurance and the history of sharia insurance in Indonesia. For those of you who want to know complete information related to insurance, you can view and search for it in full on the blogbebasapaaja the newbie BlogThere are various types of insurance and their benefits. In addition, you can also compare between one insurance and another.
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