History Of BPPDAN
On February 11, 1992, the government issued a government law no. 2/1992 regarding insurance business complemented by PP 73/1992 as well as carrying out several KMK. With the enactment of the law, PP WCL then ended the applicable Fire tariff regime, namely KOTAP Fire Insurance. Therefore, the tariff provisions regulated by KOTAP are no longer mandatory.
This resulted an unfair price competition as market players have not fully understood and applied the provisions of laws, regulations and KMK relating to the determination of insurance premiums. Moreover the obstacles faced in fulfilling the provisions relating to risk and loss profiles as the basis for setting premiums.
On September 8th 1992, 94 insurance/ reinsurance companies under the Indonesian Insurance Council (DAI) met to form an Inter Company Agreement (ICA) which resulted in a "Joint Agreement between Company Members of the Indonesian Insurance Council in the Losses Insurance Sector regarding Fire Insurance Rates. This was recorded in the Deed of Agreement by notary MMI Wiardi, S.H. on December 4th 1992.
Due to the needs of the National Insurance industry at that time, BPPDAN was born as one of the results of the agreement in the ICA 1992 stated in article 5 paragraph 1, "All parties in this joint agreement agree to establish a statistical data center with the aim of gathering accurate information for the purposes of Tarip Bureau - DAI "and article 5 paragraph 2a, "For the purpose referred to in paragraph 1 above, the National Insurance Data Center Management Agency (BPPDAN) is established with a main task to assist and finance the Tarip Bureau".
Through the Decree of the DAI Chairman No. 669A /DAI/92 concerning the Establishment of BPPDAN on October 5th 1992 and PT Reasuransi Umum Indonesia was appointed to carry out the duties and functions of BPPDAN.
Along with changing circumstances and needs of the Insurance Industry in Indonesia, BPPDAN also adjusted the developments, which is described in the schematic below:
DAI Chairman Decree No. 669A /DAI/92 October 5th 1992
The Establishment of BPPDAN
All DAI members are obliged to give a session required 2.5% for fire insurance,
but not more than USD500,000 of any risk enclosed to BPPDAN.
DJLK Decree No. 2149 /LK/2004 dated May 24th 2004
Regarding Domestic Automatic Reinsurance Support and
Own Retention (Article 1 paragraph 2)
DJLK Decree No. 5433/LK/2004 dated October 25th 2004
Regarding Domestic Automatic Reinsurance Support and
Own Retention (Article 2 paragraph 3)
2.5% Statistical Session or a maximum of IDR500 million per risk
Duties and Objectives of BPPDAN
In accordance with the results of the ICA 1992 agreement, BPPDAN has a duty to collect accurate information for the requirements of the Tarip Bureau – DAI with targets to:
- Maintain a balance between the concerns of the insurance industry, the insured community, and the national economy.
- Make a premium rate reference.
- Establishment of National Statistical Data.
The Role and Contribution of BPPDAN for the National Insurance Industry
Pic. 1
Pic. 2
Pic. 3
Pic. 4
- Become a data source for calculating the Fire Insurance Rates in 1996,2000, 2004 and 2017.
- Publish Fire Insurance Statistics for each semester (Pic 1).
- Hold an annual membership meeting.
- Publish BPPDAN Highlight, namely a bulletin on the understanding and overview of risks for certain occupations (Pic 2).
- Create and distribute Fire Insurance Risk and Loss Profile to members (Pic 3).
- Publish a map of liabilities for floods in Jakarta (Pic 4).
- Provide data and customized reports for general insurance company underwriting purposes.
- Organizing a Tariff Methodology Workshop.
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