Indonesia– Jakarta- The Financial Services Authority (OJK) is designing a fire insurance product in the form of a pool fund consortium. The consortium will be able to help the government mitigate risks coming from forest and land fires.
OJK deputy for non-bank financial industries, Dumoly F. Pardede, said that the insurance will be able to pay claims for companies affected by the frequent forest and landfires, Bisnis Indonesia reported on Monday, October 5.
“We have conveyed this idea to the Ministry of Politics, Law and Human Rights. If the government asks, we will be ready to design the product,” Dumoly said last week.
Companies that can join the consortium are forest concession firms, fishery industries, plantations, and similar companies in Sumatra and Kalimantan.
The pool fund scheme will have participants pay premiums over a period of time to be managed and invested, and the fund could be used immediately to deal with forest-fire-related problems.
In 2014, the forest fires in Sumatra and Kalimantan had incurred the state a loss of more than Rp20 trillion, BNPB information data center and PR chief Sutopo Purwo Nugroho said. This year, the two islands have been experiencing forest fires as well, resulting in thick haze that reaches neighboring countries like Singapore and Malaysia.