JAKARTA: Limited capital is suspected to be the main cause of revocation of the insurance brokerage business licences in the last one and a half years following regulation on minimum capital of IDR1 billion, which was effective in 2008.Chairman of Indonesian Insurance Brokers Association Nanan Gina said the regulation which contained in the Government Decree No.38/2008 has a major impact on the continuity of insurance brokerage business.Financial Institution and Capital Market Supervisory Agency (Bapepam-LK) had revoked the business license of 15 insurance brokers in the last 17 months. Four companies were closed from January to May 2011 and the rest of 11 were closed during the past year.Before the rule applies, the insurance brokerage business was set out in Government Decree No.63/1999. The previous regulation required insurance brokers to have a policy of professional indemnity, without a minimum capital."As a result, an insurance brokerage company that stands before 2008 is overwhelmed in meeting the minimum capital requirements [in the new regulations]," he told Bisnis, recently.In addition, as Nanan continued, the commitment of running a business insurance may also lead to main cause of the fall of business activity."However, I remain optimistic that the insurance brokerage business will grow this year. Opportunities to work on general insurance are still wide open because 95% of insurance brokers is concentrated on general insurance, "he said.Head of Insurance Bureau of Bapepam-LK Isa Rachmatawarta said the revocation of insurance broker business license occurred because those companies are negligent in delivering financial statements and / or failure to meet minimum capital requirements for insurance brokers."The cause is usually an indication of fundamental problems, namely an insurance broker or reinsurance business which is not well taken care of or even no longer taken care of by their owners," he said.He also affirmed the revocation of the insurance brokerage business shows consistent regulator oversight to the business.Revocation of business license is targeting companies that are not committed to meet the rules.Ministry of Finance through Indonesian capital market watchdog revoked business licenses of three insurance brokers companies, namely PT Multi Partners Trust, PT Binakarya Sarana and PT Artha Jasa Indonesia in April and late May.Prior to revoke licenses, Finance Minister has imposed restrictions on business activities of those three insurance brokers. Clotting activities are also a further step after the first, second, and third warning is given by the Minister of Finance since 2009. (19)(t03/msw)

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