Electronic Policy or e-policy Is it Legal? ~ Insurance Academy

There are some customers who ask me, is an electronic policy or e-policy a valid document? If there is a claim dispute, will it ‘sell’ in arbitration or court? Because of doubts about the validity of the e-policy, the customer asks for a hard copy of the policy or a printed policy.

According to Article 1 Number 6 of the Financial Services Authority Regulation Number 23/POJK.05/2015 of 2015 concerning Insurance Products and Marketing of Insurance Products (“OJK Regulation 23/2015”), an Insurance Policy is an insurance agreement deed or other document equivalent to a deed of agreement. insurance, as well as other documents that are an integral part of the insurance agreement, which are made in writing and contain an agreement between the insurance company and the policyholder.

According to the POJK, it is explained in detail about the provisions of insurance products. Insurance Products must have:

Premiums or Contributions in accordance with the promised benefits, which are set at a level that is sufficient, not excessive, and not applied in a discriminatory manner; and
Insurance Policy that does not contain words, phrases, or sentences that can:

give rise to different interpretations of the risks covered, the Company’s obligations[3], and the obligations of the policyholder, the insured, or the participant; and/or
make it difficult for the policyholder, the insured, or the participant to manage their rights.

The Insurance Policy must contain at least the following provisions:

the time the coverage takes effect;
a description of the agreed benefits;
how to pay Premium or Contribution;
grace period for payment of Premiums or Contributions;
the exchange rate used for the Insurance Policy in a foreign currency if the payment of Premium or Contributions and benefits is denominated in rupiah;
the time recognized as the time of receipt of payment of the Premium or Contribution;
Company policy that is determined if the payment of Premium or Contribution is made past the agreed grace period;
the period when the Company is unable to review the validity of the insurance contract (incontestable period) on long-term Insurance Products;
cash value table, for Insurance Products marketed by Life Insurance Companies containing cash value;
calculation of dividends on Insurance Policies or the like, for Insurance Products marketed by Life Insurance Companies that promise dividends on Insurance Policies or the like;
termination clause of coverage, either from the Company or from the policy holder, the insured, or the participant, including the terms and causes;
requirements and procedures for submitting claims, including supporting evidence that is relevant and required in filing a claim;
procedures for settlement and payment of claims;
a dispute settlement clause which among others contains a settlement mechanism inside and outside the court and the selection of the domicile for dispute settlement; and
language that is used as a reference in the event of a dispute or difference of opinion, for Insurance Policies that are printed in 2 (two) or more languages.

Insurance policies must be written clearly so that they can be easily read and understood by the policyholder, the insured, or the participant. In the case of an Insurance Policy there is a formulation that can be interpreted as:

exclusion or limitation of causes of risk covered under the relevant Insurance Policy; and/or
reduction, limitation or discharge of the Company’s obligations,

the part of the formulation in question must be written or printed in bold or italics so that it can be easily identified whether there are exceptions or limitations to the causes of risk or any reduction, limitation, or release of the Company’s obligations.

In Article 21 of OJK Regulation 23/2015, it is emphasized that the Insurance Policy is issued in hardcopy or digital/electronic form. In the event that the Insurance Policy is issued in digital/electronic form, the company must obtain the approval of the policyholder, the insured, or the participant.

In article 54 of OJK Regulation 23/2015, insurance companies are required to submit insurance policies to policyholders or the insured in hardcopy or electronic form (e-policy). In the event that the Insurance Policy is submitted in digital/electronic form, the part of the Insurance Policy in the form of an overview of the policy must still be submitted in hardcopy.

In conclusion, insurance policies can be issued in digital or electronic form or e-policies. The document is a legal document in the eyes of the law. However, the OJK emphasized that the summary of coverage section would still be submitted in hardcopy.

Credit picture: lippoinsurance.com