Indonesia OJK - Rampant Fraud Cases

OJK received information that the rampant cases of fraud are allegedly carried out by organized parties. This is suspected based on claim documents, which are almost uniform with almost identical claim details and carried out in certain areas.

The regulator treats this as a serious problem as it not only harms insurance companies but also threatens public trust and upsets the stability of the life insurance industry as a whole

In recent years, the OJK has found various modes of crime involving life insurance claims. They range from embezzlement of premiums by agents and the falsification of claim and death documents to extreme cases such as premeditated murder.

No separate data is, however, available on the number of fraudulent life insurance claims detected each year. The OJK continues to monitor the situation.

OJK has said that many policyholders are not fully conversant with the policy provisions, claim procedures, and consumer rights and obligations, which also aggravates the problem. Other contributing factors are weak governance and internal controls in some insurance companies, as well as the use of technology that has not been backed by adequate security systems.

In addition, the rising trend in digital fraud shows that fraudsters are increasingly taking advantage of technological gaps.

OJK has strengthened its regulatory and supervisory framework, including the issuance of the regulation, "Implementation of Anti-Fraud Strategies for Financial Services Institutions" in 2024. This regulation requires life insurance companies to have a comprehensive anti-fraud strategy, strictly verify claims, and report indications of fraud to the OJK.