THE LEGAL STATUS OF INSURANCE AGENTS IN THE INDONESIAN INSURANCE BUSINESS

Abstract

The insurance business is a sector within the financial services industry that provides services in the form of risk coverage and management, the sale insurance products, and provide consultancy related to insurance. To enhance company performance and value, good corporate governance is needed, particularly concerning the performance of insurance agents. This study aims to examine the legal status of insurance agents in the insurance business and to analyze the regulation regarding the training systems provided by insurance companies to equip agents with the necessary knowledge and understanding when offering insurance products to prospective clients according to the principles of accountability and responsibility in good corporate governance for insurance companies. The research method used is normative juridical method. Based on Article 16 of OJK Regulation No. 69/2012, insurance companies are required to ensure that insurance agents possess a valid agency certificate and are registered with the Financial Services Authority (OJK). However, this provision may give rise to multiple interpretations regarding whether the responsibility for obtaining certification and registration lies with the insurance agent or insurance company. The regulation regarding the legal status of insurance agents is considered merely a formality. Moreover, the regulation requiring a minimum of two product training sessions per year is considered insufficient, contributing to cases of client loss due to agents lack of product knowledge and poor communication of insurance products information, thereby violating the principles of accountability and responsibility in good corporate governance within the insurance companies.