Insurance in Timor-Leste

Private insurance uses a written policy to define the covered risk, premium, payment date, term, exclusions, compensation and the duties of each party. The policyholder takes out the contract, the insured faces the covered risk, and a beneficiary receives a payment where the policy provides for one. An intermediary may act as an agent, subagent or broker. A claim, called a sinistro in local insurance terminology, begins when the policyholder reports a covered event and provides the required evidence. The Banco Central de Timor-Leste (BCTL) licenses insurers, maintains the insurance register, supervises policies and advertising, applies solvency rules and can impose sanctions. Its register addresses for the licensed insurers are in Dili. As of December 2025, the licensed market included Sinarmas Insurance, SA and Federal Insurance Timor, S.A. for general insurance, and Sinar Mas Life Insurance, S.A. for life insurance. The market recorded US$35,676,206 in assets, US$6,129,889 in premiums, 14,581 policies, US$1,004,872 in claims and 275 claim cases; these figures describe the market at that date and are not a national coverage rate. General insurance can cover property damage, fire, business interruption, equipment, public or product liability, employer or professional liability, motor vehicles, marine and aviation risks, accidents, travel, financial guarantees, legal expenses, income protection and mortgage payments. Life insurance can cover death, provide an annuity or savings benefit, or link protection to pension or incapacity risks. Actual availability, exclusions, limits and prices depend on the insurer, product and risk. Health questions primarily belong to the health topic rather than this insurance overview. Timor-Leste also has a public, contributory Social Security system under the constitutional framework, Law 12/2016 and Decree-Law 47/2016. It uses pay-as-you-go financing and defined benefits, with reserves held by the Social Security Reserve Fund (FRSS). The system provides old-age, absolute and relative invalidity, survivor, death-grant, funeral, maternity, paternity and adoption benefits. A separate non-contributory regime provides old-age and invalidity benefits linked to citizenship. The available research does not establish a separate nationwide unemployment-insurance scheme or a distinct mandatory workers' compensation market, so neither should be assumed. Public- and private-sector employees, including fixed-term and indefinite-term employees and state employees, must generally be registered. Registration also applies to ENIN, which has been mandatory since 6 December 2022. Self-employed workers, informal-sector workers, domestic-service workers, company managers and directors, nationals abroad and unemployed people with at least three years of contributions may register voluntarily under the applicable rules. Registration can be completed personally or by email through Dili, municipal or RAEOA offices; online registration was still under construction in the researched material. An employee's registration should be completed by the first Remuneration Statement and takes effect from the start of the work relationship. Typical documents include a national identity card, electoral card or birth certificate, while a foreign national uses a passport. Mandatory Social Security contributions total 10% of the contribution base: 4% from the worker and 6% from the employer. The employer submits the Remuneration Statement from the first to the tenth day of the following month and pays from the tenth to the twentieth. The base includes basic pay, the thirteenth month and performance, night, shift, remote or other activity supplements, as well as compensation for unfair dismissal. It excludes travel, food and accommodation allowances, overtime, bonuses or profit shares, extraordinary food and representation expenses. Voluntary workers select one of 20 contribution bands and generally pay 10%; people aged 50 or more must use at least the fifth band. Voluntary payment can be made until the tenth day of the following month, with bank-transfer costs paid by the worker. Old-age Social Security benefits begin at age 60 if the qualifying period is met. In 2026, the qualifying period is 84 months and it rises by six months each year until it reaches 120 months in 2032. A death grant and funeral reimbursement do not require a qualifying period, but the application must be submitted no later than three months after the month in which the death became known. The death grant equals three times the reference earnings. Invalidity is assessed through the Social Security Validation Institute (SVI), and absolute invalidity begins when the SVI has made its decision. Before a private contract is concluded, the insurer or intermediary must assess the customer's needs and risk profile and explain the rights and duties. The policy must be written and signed by both parties. It must state the premium and due date, compensation, covered and excluded risks, duration, rights and duties, and the arbitration arrangements. A policyholder has a ten-day withdrawal or termination period; if no claim has occurred, the insurer refunds the premium after deducting administrative costs of no more than 10%. A policyholder must provide truthful risk information, pay premiums on time, reduce damage, report a loss without delay unless the policy sets another period, provide evidence, cooperate with the assessment and report relevant changes. The insurer must acknowledge, assess and pay legitimate claims, or promptly give the reasons for refusal and identify missing information. The researched rules do not establish one general statutory deadline for all private claims. The policy and insurer therefore determine much of the timing. An internal dispute procedure may be followed by voluntary arbitration; no separate insurance ombudsperson was identified in the available research. Motor third-party liability insurance is compulsory for every motor vehicle, including foreign vehicles entering Timor-Leste, and normally runs for at least one year. It covers death, bodily injury and physical impairment suffered by third parties. The owner or authorised driver must report an accident within five business days, and an injured third party may claim directly. A late accident report does not by itself allow the insurer to refuse the claim. The insurer must resolve the complete claim within 30 business days; a valid delay attracts a penalty of 20% per year unless there is just cause. The aggregate limit is US$20,000 for passenger-for-hire and heavy-goods vehicles and US$6,000 for other vehicles. An insurer may not refuse a motor-liability application, and district agents must be available. After a change of ownership, the previous policy remains effective for no more than 15 days. Motor insurers may seek recovery in situations such as driving without a licence, alcohol or drug use, use for an unauthorised purpose, unpaid or terminated premiums, intentional conduct or use of a stolen vehicle. Private policies can end through expiry, policyholder termination, just cause, legal resolution or mutual agreement. For non-payment, the insurer generally gives a written 30-day grace period, or 10 days after repeated late payment; intentional false information can justify immediate termination. If an insurer's licence is revoked, policies generally end 30 days after publication of the revocation, except for life policies. Insurers must maintain minimum solvency, technical reserves and liquidity, use reinsurance above exposure limits and submit quarterly reports. Core risk assessment, underwriting, premium receipt and claims payment cannot be outsourced, and a foreign insurer may operate only through a licensed branch.