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Constitutional law expert Margarito Kamis as the Petitioner’s expert giving his statement virtually at the judicial review hearing of the Insurance Law, Thursday (24/9). Photo by Humas MK/Ifa.

JAKARTA, Public Relations of the Constitutional Court—The Constitutional Court (MK) held another material review hearing of Law No. 40 of 2014 on Insurance on Thursday, September 24, 2020. The hearing had been scheduled to hear the Petitioner’s expert. The petition of case No. 32/PUU-XVIII/2020 was filed by the members representative body (BPA) of mutual life insurer Asuransi Jiwa Bersama (AJB) Bumiputera1912.

Constitutional law expert Margarito Kamis as the Petitioner’s expert said Article 7 paragraph (1) of Law No. 2 of 1992 on Insurance Business contains a provision that insurance business can only be carried out by limited liability companies (Persero), cooperatives, and joint ventures. Meanwhile, paragraph (2), without reducing the provision as referred to in paragraph (1), stipulates that actuarial consultant business and insurance agent business can be carried out by private companies.

Margarito believes the provision on insurance by joint ventures are further regulated by law. However, the law has been repealed by Law No. 40 of 2014 on Insurance. He said, before Law No. 2 of 1992 was repealed by Law No. 40 of 2014, the Constitutional Court through Decision No. 32/PUU-XI/2013 stated, "Paragraph (3) Article 7 of Law No. 2 of 1992 is unconstitutional as long as it is regulated by law."

"Equating Article 7 of Law No. 2 of 1992 with Article 6 of Law No. 40 of 2014 based only on text does look misleading," Margarito said to the justice panel led by Chief Justice Anwar Usman.

He believes Article 7 of Law No. 2 of 1992 doesn’t lay out the specifics of existing mutual business insurance as a legal entity. This article only supports mutual insurance as one of the three types of insurance business, while the specifics regarding the legal entity has to be further regulated by law. This is what distinguishes it fundamentally from Article 6 of Law No. 40 of 2014.

"In addition, Article 6 paragraph (3) of Law No. 40 of 2014, apart from being a typical capitalistic article, also denigrates the ideological will of the Constitutional Court, and in [the Court’s] decision is also [said to be] destabilizing the legal system. This is because the legislators were ordered by the Constitutional Court to form a Joint Business Insurance Law separately from the General Insurance Law, not to recognize joint venture insurance as legal entities," he explained.

Margarito asserted that the legislators’ denial of the Constitutional Court’s decision through Article 6 paragraphs (2) and (3) of Law No. 40 of 2014 is a direct blow to the national mutual cooperation value, which is typical of the nation. "I cannot imagine that the Constitutional Court would dare give a new capitalistic nuance to the mutual cooperation [stated] in its previous decision," he said. He appealed to the Court not to be played by capitalists.

Constitutional Justice Suhartoyo questioned Margarito’s description of capitalistic mutual cooperation, which is not included in the legal considerations of the decision. He also asked the relevance between the government regulation and the Petitioner’s constitutional loss.

Margarito answered that Article 6 paragraph (3) should be related to paragraph (2) in Law No. 40 of 2014, which orders the formation of a government regulation on joint insurance business. He believed it to be different from Article 7 paragraph (3) of Law No. 2 of 1992. He suspected that the article was drafted because in paragraph (2) legislators have recognized existing joint insurance business as legal entities.

He also believed that Law No. 40 of 2014 has fulfilled the Constitutional Court’s order. However, it is interpreted not as an order to pass a new law on joint insurance business, but the same law as the one already reviewed. “I believe there must be a specific new law as ordered by the Constitutional Court after interpreting Article 7 paragraph (3) of Law No. 2 of 1992,” he said.

Also read:

Members Representative Body of Mutual Life Insurer Bumiputera Challenges Provision on Insurance

Govt: Regulation of Insurance Business Is Open Legal Policy

House Affirms Review of Govt Regulations Under Purview of Supreme Court 

Nurhasanah, Ibnu Hajar, Maryono, Achmad Jazidie, Habel Melkias Suwae, Gede Sri Darma, Septina Primawati, and Khoerul Huda are the members representative body (BPA) of mutual life insurer Asuransi Jiwa Bersama (AJB) Bumiputera1912. They challenge Article 6 paragraph (3) of the Insurance Law, as they believe they have suffered constitutional loss because the a quo article is against the substance of the Constitutional Court Decision No. 32/PUU-XI/2013 dated April 3, 2014, in which the Court ordered that the provision on mutual insurance business shall be regulated in a separate law at the latest two years and six months after the ruling was pronounced. They believe the president and the House of Representatives (DPR) has induced a regression by amending Law No. 2 of 1992 on Insurance into Law No. 40 of 2014 on Insurance, especially the a quo article.

The Petitioners also deem the provision in violation of the Constitutional Court decision that ordered the Government and the House to form a separate law on mutual insurance. They also believe that the government regulation (PP) contradicts the existing article of association of AJB that guarantee the Petitioners’ status and authority. 

Writer: Utami Argawati
Editor: Lulu Anjarsari
PR: Annisa Lestari
Translator: Yuniar Widiastuti (NL)

Translation uploaded on 9/29/2020 22:38 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.

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