When Insurance Fails: Bankruptcy Law and Policyholder Protection in Indonesia

Ketika Asuransi Gagal Bayar: Hukum Kepailitan dan Perlindungan Pemegang Polis di Indonesia

Authors

  • Dedy Dedy Doctoral Program in Law Studies, Faculty of Law, Universitas Sumatera Utara, Medan Author https://orcid.org/0009-0000-4987-9413
  • Prof. Dr. Hasim Purba, S.H., M.Hum. Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia Author
  • Dr. Mahmul Siregar, S.H., M.Hum. Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia Author https://orcid.org/0009-0002-9050-6939
  • Dr. Mulhadi, S.H., M.Hum. Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia Author https://orcid.org/0000-0003-1280-4797
  • Prof. Dr. Sunarmi, S.H., M.Hum. Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia Author

Keywords:

access to justice, insurance insolvency, OJK Authority, policyholder protection

Abstract

Insurance failures reveal a fundamental legal tension between financial stability and policyholders’ private-law rights to timely benefit payments. In Indonesia, this tension is intensified by a gatekeeping model that channels insurer insolvency proceedings exclusively through the financial regulator, limiting direct court access for creditors. This study employs doctrinal legal research supported by case-study evidence from major failures, including Jiwasraya, Wanaartha Life, and Kresna Life, and adopts a comparative approach drawing on the Netherlands, the United States, and Singapore. The findings identify a “protection paradox”: although policyholders are formally prioritized in insolvency distribution, effective protection remains uncertain due to asset shortfalls, delayed regulatory intervention, and restricted judicial pathways. To address these shortcomings, the article proposes a three-layered reform model comprising strengthened early intervention, an operational policyholder guarantee mechanism, and a calibrated court-supervised insolvency framework. This model aims to balance systemic stability with legal certainty and effective policyholder protection.

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Author Biographies

  • Dedy Dedy, Doctoral Program in Law Studies, Faculty of Law, Universitas Sumatera Utara, Medan

    Dedy is a doctoral candidate in Law at the Faculty of Law, Universitas Sumatera Utara, specializing in financial law, insolvency, and creditor protection. His research focuses on regulatory frameworks for insurance company bankruptcy, integrating normative-doctrinal methods with comparative legal analysis to propose policy reforms enhancing legal certainty and justice.

  • Prof. Dr. Hasim Purba, S.H., M.Hum., Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia

    Prof. Dr. Hasim Purba, S.H., M.Hum. is a Professor of Law at the Faculty of Law, Universitas Sumatera Utara. He specializes in civil law and commercial law, with extensive academic and research experience in corporate law, financial regulation, and legal development. He obtained his Bachelor of Laws (S.H.) from Universitas Sumatera Utara in 1991, followed by a Master of Laws (M.Hum.) in 2001, and a Doctorate in Law (Dr.) from the same institution in 2010. He currently serves as the Head of the Master of Notarial Law Program (2021–2026) and has held various strategic academic and institutional positions, including membership in the Board of Trustees of Universitas Sumatera Utara (2020–2025). His scholarly contributions encompass numerous publications in national and international journals, addressing issues such as corporate governance, product liability, financial regulation, and legal harmonization.

  • Dr. Mahmul Siregar, S.H., M.Hum., Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia

    Dr. Mahmul Siregar, S.H., M.Hum. is the Dean of the Faculty of Law at Universitas Sumatera Utara and a senior lecturer specializing in investment law and international trade law. He completed all of his higher legal education at Universitas Sumatera Utara, earning his Bachelor of Law in 1997, Master of Law in 2001, and Doctorate in Law in 2005. In addition to his leadership role as Dean, Dr. Mahmul Siregar is actively involved in teaching and supervising graduate and doctoral students. His academic work focuses on corporate governance, international trade, financial regulation, and public interest protection in economic law. He has contributed to numerous national and international publications addressing issues such as state-owned enterprise governance, competition law, and legal system reform.

  • Dr. Mulhadi, S.H., M.Hum., Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia

    Dr. Mulhadi, S.H., M.Hum. is a senior lecturer at the Faculty of Law, Universitas Sumatera Utara. He specializes in civil law and insurance law, with particular emphasis on contract law, consumer protection, and legal issues in the insurance sector. He is actively involved in undergraduate, graduate, and notarial law programs at the Faculty of Law. Mulhadi has contributed to a range of scholarly publications addressing insurance disputes, legal protection of policyholders, and commercial law issues. His research also extends to corporate agreements, legal accountability, and financial disputes, including studies on the principle of utmost good faith in insurance and juridical analysis of court decisions. In addition to academic work, he has served as an expert in insurance-related legal cases, including providing expert testimony in criminal investigations concerning misleading information to policyholders. His academic and professional contributions reflect a strong engagement with both doctrinal legal scholarship and practical legal problem-solving in the field of insurance and civil law.

  • Prof. Dr. Sunarmi, S.H., M.Hum., Faculty of Law, Universitas Sumatera Utara, Medan, Indonesia

    Prof. Dr. Sunarmi, S.H., M.Hum. is a Professor of Law at the Faculty of Law, Universitas Sumatera Utara, specializing in bankruptcy law, commercial law, and comparative legal systems. She is widely recognized for her expertise in insolvency law, particularly in the comparative study of bankruptcy systems between civil law and common law traditions. She has produced extensive academic work in the field of bankruptcy and business law, including her notable contribution on the comparative analysis of Indonesian and United States bankruptcy systems, which has become a key reference in legal scholarship. Her research focuses on legal certainty, creditor protection, and the development of insolvency frameworks in Indonesia.

     

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Published

03-04-2026

Issue

Vol. 1 No. 3 (2026): LawSains Journal

Section

Research Articles

License

Copyright (c) 2026 Dedy Dedy, Prof. Dr. Hasim Purba, S.H., M.Hum., Dr. Mahmul Siregar, S.H., M.Hum., Dr. Mulhadi, S.H., M.Hum., Prof. Dr. Sunarmi, S.H., M.Hum. (Author)

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How to Cite

When Insurance Fails: Bankruptcy Law and Policyholder Protection in Indonesia: Ketika Asuransi Gagal Bayar: Hukum Kepailitan dan Perlindungan Pemegang Polis di Indonesia. (2026). LawSains Journal, 1(3), 14-25. https://journal.prisains.com/index.php/law/article/view/19