The development of Islamic insurance in Indonesia requires regulatory support to ensure Sharia compliance and legal certainty. This study aims to analyze the legal foundations and operational regulations of Islamic insurance in Indonesia and identify challenges in their implementation. The research employs a qualitative method with a normative juridical approach through literature review and analysis of relevant regulations. The findings indicate that recent regulations, including the 2023 Financial Sector Development and Strengthening Law and several OJK regulations, have strengthened governance, supervision, and consumer protection. However, challenges remain, including regulatory fragmentation, limited independence of the Sharia Supervisory Board, and industry readiness for spin-off requirements and IFRS 17 implementation. The study concludes that regulatory harmonization and stronger Sharia supervision are essential to support the sustainable growth of the Islamic insurance industry.