400,000 policyholders of Manulife face uncertainty
Rendi A. Witular, The Jakarta Post, Jakarta
Around 400,000 policyholders of PT Asuransi Jiwa Manulife Indonesia (AJMI), the local unit of Canada's giant insurer Manulife Financial Corp., have been put in a quandary following the Central Jakarta Commercial Court's controversial verdict to declare the firm bankrupt.
AJMI spokesperson Nelly Husnayati said that the company for the time being could not pay any maturing claims until a final and binding ruling had been issued by the Supreme Court.
She acknowledged that the firm had received some 2,880 phone calls from policyholders asking about the position regarding their claims.
There are also fears that policyholders might not be able to fully recoup their claims as their value might exceed AJMI's assets.
AJMI has temporarily shut down its offices throughout Indonesia following the court ruling.
AJMI is Indonesia's fourth largest life insurance firm with total assets worth Rp 3.1 trillion. As of December 2001, the company collected premiums of around Rp 570 billion.
The Central Jakarta Commercial Court declared AJMI bankrupt on Thursday after the receiver of the now defunct company, the former partner of Canada's Manulife in AJMI, brought a bankruptcy petition over an unpaid dividend in 1999. AJMI had argued that it did not declare a dividend during that year. Many have questioned the court's ruling.
AJMI is 71 percent owned by Manulife, with the remaining shares held by International Finance Corporation and local firm PT Tirta Dana Nugraha.
AJMI president Philip Hampden Smith, however, said during a press conference that the company was fully committed to protecting the interests of policyholders.
"Despite this unbelievable ruling, I would like to assure all policyholders that their policies remain protected by AJMI, and that we are fully dedicated to doing everything we can to ensure our employees and customers are not negatively affected by these criminals acts," he said.
AJMI operates its business through a network of 72 branches in 33 cities throughout Indonesia, with the support of 4000 members of staff.
Meanwhile, insurance expert and chairman of the Indonesian Insurance Council Hotbonar Sinaga said that the current situation was unfair to policyholders because they could not realize maturing claims.
He said, however, that although AJMI's assets might not be able to fully cover the claims of policyholders, the company's parent, Manulife, would likely step in to maintain its reputation as a world-class insurer.
On Friday, Manulife said that it was fully committed to staying in business in Indonesia.
AJMI has appealed to the Supreme Court over Thursday's ruling.
Until a final verdict is issued by the Supreme Court, AJMI will be run by a receiver, who will freeze the company's assets temporarily.
The ruling means, in effect, that the company's management will be under the authority and the supervision of the receiver and a supervising judge, both of whom act as caretakers of the company.
If the Supreme Court upholds the bankruptcy ruling, AJMI will be liquidated and its assets distributed to AJMI's creditors, who include policyholders.
However, policyholders whose policies have yet to mature will not receive their premiums back in full.
Manulife has faced a series of legal challenges here since it acquired its 40 percent stake in DSS in October 2000 at a government-held auction after DSS was declared bankrupt. The legal moves are believed to have been orchestrated by the Gondokusumo family, the owner of DSS and founder of the Dharmala Group, who has been trying to defraud Manulife since it acquired DSS stake in AJMI.
Manulife vows to fight back
Things in AJMI will be tense over the next 48 days as the Supreme Court decides on the insurer's fate.
AJMI's lawyer, Sheila A. Salomo of Hotma Sitompoel and Associates, said after the commercial court's odd verdict on Thursday that AJMI was disappointed, but was determined to appeal to the Supreme Court.
Moreover, Sheila added that AJMI would sue the plaintiff.
AJMI has eight days to register its appeal with the Supreme Court. A failure to do so would remove the company's last chance to seek justice.
After filing its appeal, AJMI will have to wait for another 10 days for the plaintiff, Paul Sungkar, the liquidator of the defunct PT Dharmala Sakti Sejahtera (DSS), to submit his counter- statement.
When the above prerequisites have been completed, the case file is delivered to the Supreme Court.
The Supreme Court will then sit to consider its decision 30 days after the case file has been received.
The current case is the fourth time DSS has tried to bankrupt AJMI since 2000, when it first lost control of the insurer.