CELIOS has just released its latest report on the mandatory Third Party Liability (TPL) motor vehicle insurance policy. The study finds potential negative impacts on the national economy and the public, especially lower- and middle-income groups. If implemented, the policy risks reducing public income by up to IDR 20.7 trillion, lowering GDP by IDR 21 trillion, and reducing employment by 3.4 million people. Small businesses, such as those in the culinary sector, are also projected to be affected, with local revenue declining by up to IDR 354 billion.
CELIOS recommends that TPL insurance not be made mandatory, but remain optional. The government is advised to subsidize premiums for vulnerable groups while optimizing the SWDKLLJ scheme as an alternative that does not burden the public. In addition, stronger oversight is needed to ensure the policy’s transparency and integrity. This would help ensure the policy is better targeted without adding to the burden on the public and the economy.
CELIOS has released its latest report on the proposed mandatory Third Party Liability (TPL) motor vehicle insurance policy. The study highlights potential negative impacts on Indonesia’s economy and society, particularly for lower- and middle-income groups. If enforced, the policy could reduce household income by up to IDR 20.7 trillion, shrink GDP by IDR 21 trillion, and cut as many as 3.4 million jobs. Small businesses, including the food and beverage sector, are also projected to suffer losses, with local revenue declining by IDR 354 billion.
C ELIOS recommends that TPL insurance should remain optional rather than mandatory. The government could consider subsidizing premiums for vulnerable groups while optimizing the existing SWDKLLJ (compulsory contribution intended as an insurance guarantee for drivers in case of traffic accidents ) scheme as an alternative without imposing additional burdens on the public. Strengthening oversight is also essential to ensure transparency and integrity. This approach would allow the policy to better protect the public interest without exacerbating economic pressures on households and businesses.
CELIOS-Mandatory TPL Vehicle Insurance Download