JAKARTA Aug 22 Indonesian lawmakers are looking
into the possibility of reducing the stake foreign investors are
allowed to hold in local insurers, the latest move towards more
nationalistic policies in Southeast Asia's biggest economy.
Foreign investors are currently allowed to own up to 80
percent of domestic insurance companies.
Harry Azhar Azis, deputy chairman of the parliamentary
commission overseeing finance and banking, told Reuters that
lawmakers were hoping to pass a draft bill outlining a broad
plan to lower the limit by the end of September.
"Foreign companies own the majority of the insurance
business in Indonesia," said Azis. "We are looking to limit the
Indonesia's insurance sector has seen a spate of
acquisitions in the past few years as foreign companies seek to
capitalise on the low coverage and attractive growth rates.
Japan's Sumitomo Life Insurance Co and Dai-ichi
Life Insurance Co Ltd have bought stakes in Indonesian
insurers, while Britain's Aviva PLC is partnering with
Indonesian conglomerate PT Astra International Tbk to
sell life insurance products.
Azis said some political parties including Golkar, the
country's second biggest, have proposed a 49 percent ownership
cap. It was not clear if any revision to the limit would apply
to investors already holding stakes in Indonesian insurers or
just to new deals.
Indonesian lawmakers are also considering restricting
foreign ownership in plantations and banks, following a wave of
nationalist policies in the oil and mining sector imposed by the
The current parliament and government will remain seated
until October, when the new administration of President Joko
Widodo will take over. Widodo is seen by the markets as a
capable administrator who can bring in much-needed reform for
business, but he is also under pressure to impose more
(Reporting by Gayatri Suroyo; Writing by Eveline Danubrata;
Editing by Miral Fahmy)