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UNDERWRITER RESPONSIBILITIES IN POLICY CLOSING LIFE INSURANCE

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ABSTRACT

Every human being must face a risk. The way to deal with the possibility of an unexpected event is

by transferring the risk to another party through an insurance agreement. The research was carried

out using a normative juridical approach, especially the statutory approach, where the relevant laws

and regulations will be studied in relation to the main issues that the author examines. The author

remain protected.

Keywords: Liability, Underwriter, Insurance Policy, Life Insurance

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 CC BY-SA International License.

INTRODUCTION

The concept of property and ownership is one of the important subjects in Islam.

Islam places the position of wealth as an important thing which is proven that there are five

maqashid sharia, one of which is hifz al-maal or maintaining assets. (Toriquddin, 2014) .

Islam believes that all wealth in the world belongs to Allah alone, where humans only have

the right to use and make use of it. However, Islam also recognizes a person's personal

transferring risk to other parties who are ready for it. Namely by signing an insurance

contract. In article 1 (one) of the Commercial Law Code (KUHD) it is stated that,

"Insurance is an agreement by which the insured makes an obligation to the insurer by

paying insurance premiums to compensate for losses, damages or loss of expected profits

due to an uncertain event.” In addition to Article 246 of the Criminal Code, insurance

based on Insurance Law Number 2 of 1992 is an agreement between 1 (one) party and

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another party where the insurer makes an obligation to the insured by receiving a premium

to compensate the insured for loss, damage or loss of anticipated benefits or legal liability

settlement of an event of payment as a result of the insured's death (Ramli, 2020) .

Law Number 40 of 2014 also provides an understanding of insurance, that coverage

is an agreement between the insurance company and the policyholder, whereby the

insurance company receives insurance premiums in return for: a) Providing compensation

the insured which stipulates that the insurer is obliged to carry out certain achievements,

such as paying a premium for the loss he suffers. The agreement which constitutes total

insurance itself stipulates that the insurer must carry out the performance by paying a

predetermined amount of money

And life insurance is included in this category. Emmy Pangaribuan Simanjuntak said

that life insurance is an agreement where one party promises to pay a certain amount of

money regularly or all at once, and the other party promises to pay a premium, which

depends on the person's death (Sastrawidjaja, 1997 ) . Underwriters are members of an

insurance company who are responsible for setting selection guidelines and making

decisions for each potential insured. Underwriting is a process in which someone who will

identification of policyholders, insured or participants, in accordance with Article 26

paragraph 1 of Law Number 40 of 2014. It is the size of each company's underwriting

criteria that will affect the level premium. In Article 34 of the Financial Services Authority

Regulation No. 69/POJK.05/2016 Concerning Business Conduct of Insurance Companies,

Sharia Insurance Companies, Reinsurance Companies, and Sharia Reinsurance Companies,

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business actors are required to have Underwriting Guidelines to be able to market a

product or service. This will show that the risk selection process is carried out carefully

in insurance agreements is a standard agreement, legal protection for policyholders

becomes very important. With the enactment of the standard agreement, the legal

protection of insurance policy holders is questioned because of the unequal position

between them and the insurance company.

authorities. The authority to regulate and supervise financial services activities in the

capital market, insurance, pension funds, financing institutions and other financial services

institutions sectors was transferred to OJK since 31 December 2012. However, the problem

lies in the extent to which insurance policyholders can be protected.

RESEARCH METHODS

This research uses normative legal research, or legal research that views law as a

building system of norms. Principles, norms, laws, conventions, and doctrines all fall under

this normative system. Using a statutory approach, all relevant laws and regulations will be

examined in relation to the legal issue being investigated. Primary legal materials come

RESULTS AND DISCUSSION

Implementation of Underwriting in the Life Insurance Policy Issuance Process

Life insurance is an agreement between 2 (two) or more parties where the insurer

binds himself to the insured by receiving a premium to provide payment based on the death

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of the insured (Aqimuddin & Kusnungi, 2022) . Life insurance comes in various types.

First, is one-time insurance. There is a time limit on this insurance, even though the

policyholder does not face the risk at the end of the term. Second, lifetime insurance. There

is a time limit for this insurance, which is until the policyholder dies. The sum insured will

be distributed to the heirs of the policyholder after his death. Third, dual purpose

insurance. This insurance can be used as a means of investment. The premiums paid are

entity; d) Protection of business partners and important people; e) A combination of 2

(two) or more things.

Underwriters play an important role in the insurance business. The Underwriter's job

is to check insurance or loan applications and calculate the risks. The Underwriter's job is

to select risks, including health risks, family medical history, occupation, financial

situation, hobbies of the prospective insured, and relationships with the parties to the

insurance contract. Its most important function is to determine whether the prospective

insured meets the requirements. Underwriters have the following obligations: a) First,

collect information from customers who come to apply for insurance, credit, or loans. The

Underwriter checks personal data such as the identity of the prospective customer, income,

1) Assessment of Policyholders. Policyholder is the person or legal entity responsible for

the insurance contract. The policyholder must be an individual or business entity that

has a relationship with the prospective insured (Tauris & Qomariyah, 2015) . This

relationship can take many forms, including parent-child, grandparent-grandchild and

legal entity-employee. If the prospective policyholder is a legal entity, the

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completeness of the documents supporting the fulfillment of the legal aspects of the

legal entity must be examined to determine its legality.

the contract, the minimum age must be the legal age of majority, and the

maximum age must be the average age at which a person can still communicate

and correspond.

b. Required Documents. The following are the documents required for prospective

is called the insured. The insured's requirements may differ depending on the type of

insurance. The main benefit of life insurance is basically protection against the risk of

death of the insured. The beneficiary will receive the sum assured. As a result, the

insured must be someone whose life the beneficiary depends financially (Pandawati,

2015). Some important things to consider in determining the criteria for the insured

include:

a. Child As Insured. The insured child is the insured who has not reached legal age,

namely between 0 (zero) years and 17 (seventeen) years. There are also insured

children who have reached legal age but are not yet working and are still

economically dependent on their parents. Underwriters must pay attention to the

b. Husband/ wife as the insured. Someone who is not actively working and not

earning a living outside the home is an economically dependent spouse. Spouses

who are actively working or productive must be insured under the type of

individual coverage to obtain the same sum assured.

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c. Parents as Insured. Life insurance contracts are long-term financial contracts.

Insurance is a guarantee to pay money in the future. Insurance only covers

insurance on behalf of an elderly mother, who is financially dependent on her

child, cannot be said to have an insurable interest because the insured mother

will not suffer a financial loss.

3) Beneficiary Assessment. The policyholder, insured and beneficiary all must have a

Settlement of Problems Due to Negligence in the Underwriting Process in Life

Insurance

Achievement of something that has been agreed before is what is expected by each

party in the insurance agreement. In the insurance agreement, of course, payment of

insurance claims to heirs is the most expected thing as a form of fulfillment of

achievements from the company. However, disputes in the insurance industry result from

where they work. In general, a life insurance agent is someone appointed by an insurance

company to acquire new business and serve existing customers. An agent is a person who

acts on behalf of another person or represents another person in a relationship with a third

party known as the authorizer (in this case an insurance company). Even though the agent's

name is not listed in the insurance policy, each agent is authorized to act as an intermediary

on behalf of the insurance company for the prospective customer (the insured), basically

the agent has no legal relationship with the insured. However, this is what creates a

problem, because with this disengagement the agent sometimes fails to convey the

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participation of the prospective insured, and in the end the company is unable to fulfill the

claims submitted.

are naughty and commit fraud. This is done to prevent agents from directly or indirectly

committing fraud and involvement in criminal activities, such as: a) Engaging in

dishonesty or fraud; b) Misuse of customer funds (such as premium receipts), customer

funds must be deposited immediately, delays in depositing premiums from customers can

signature on documents related to any business. The agent will be subject to sanctions that

contained in Article 21 paragraph (5) of Law Number 2 of 1992 and Government

Regulation Number 73 of 1992 namely: "Anyone who individually or jointly falsifies the

documents of a loss insurance company or life insurance company or reinsurance

company, is threatened with a maximum imprisonment of 5 (five) years and a maximum

fine of Rp. 500.000.000.- (Five hundred Million Rupiah)".

b) Insurance Brokers

An insurance broker is a representative who sells insurance contracts and has been

authorized by an insurance company. However, the broker is not responsible for paying

claims because once the prospective client's information is returned to the insurance

customers when closing, which causes customers to not understand the terms and

agreements. As a result, existing clauses are often detrimental to policyholders. Whatever

happens, the policyholder must comply with the guidelines of the insurance company

(Financial, 2007) .

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Underwriter Responsibilities and Legal Protection for Life Insurance Policyholders

In carrying out its duties, an Underwriter must make mistakes too. The Civil Code has

regulated responsibilities between employers and their employees. Confirmed in article

1367 of the Civil Code, if there is an error in fulfilling a claim in the Underwriting process,

compensation in the form of an amount of funds to the insured party but there is

a default alias broken promise, then the policyholder is permitted to claim

compensation costs accompanied by interest;

2. The first principle in the agreement is the principle of binding force, which is

stated in Article 1338 of the Civil Code. When applied to insurance contracts,

this principle requires that the insured and the policyholder are obligated to

enforce the terms of the contract. The insured has a legal premise to sue the

insurer to complete the presentation. Second, the agreement builds trust between

the parties that they will carry out their commitments and achieve the goals as

promised, in accordance with the principle of trust. Third, the principle of good

faith, which stipulates that the parties must adhere to decency in implementing

the agreement.

b) Legal Protection for the Insured According to the Criminal Code

Code, at the time the coverage agreement is made, the joint rights and obligations between

the insured and the insurer take effect immediately. That is, the insured still has the right to

claim compensation in the event of an event that was agreed upon, even though both

parties have closed the insurance agreement but did not make a policy. The insured must

use other evidence, such as insurance company correspondence, records, closing notes, and

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so on, to show that the insurance agreement has ended. Article 257 KUHD regulates the

making of insurance agreements, while Article 255 KUHD regulates the implementation of

c) Legal Protection for the Insured under the Consumer Protection Act

For consumers in Indonesia, including insurance consumers, Law Number 8 of

1999 is contained in Articles 5 (five), 7 (seven, 8 (eight), and 9 (nine). Consumers are

required to read and follow the instructions for using goods/services, and obliged to act in

Number 61/Pdt.Sus-BPSK/2018/PN Rap

Reisch having its address at Prudential Tower, Jl. General Sudirman, Kav. 79,

South Jakarta 12910; In this matter represented by attorneys Jhonshon Manik,

SH and Toshinory AP Siahaan, SH, Advocates and Legal Consultants at Andy

Natanael & Ridwan Law Firm (“ANR”), whose address is at Jalan Padang Golf

Komplek CBD Polonia Blok F-18 Medan, 20157, based on Power of Attorney

No. 153/PLA/LGL-POA/VIII/2018, dated 10 August 2018, which was registered

at the Registrar's Office of the Rantau Prapat District Court on 13 August 2018

Register Number: 226/SKC/2018/PN-Rap, hereinafter referred to as the

Petitioner;

Oppose

the place of consumer legal domicile, as well as Article 3 paragraph (3)