Dharmala Manulife responds

Dharmala Manulife responds

On behalf of Dharmala Manulife, I would like to respond to the
letter from Marcellina Tanuhandaru that was published on July 15,
1997 with the title Life Insurance service.

Let me first briefly outline the basis of any insurance
contract:

1. The basis of each such contract is an application form that is
filled out by the applicant. The applicant has an obligation to
fill in this form completely, correctly and honestly.

2. In addition to the application, other medical information and
other supporting documents are required depending on the
circumstances of the application.

3. When the policy contract is issued, the application form and
the other documents form part of the contract. The contract
itself state this and it also states that if any of the declared
information has been misrepresented, the policy may be canceled
by the insurance company. Such a cancellation of the policy is
only permitted if the data misrepresented was material to the
underwriting process.

In this particular case:

1. The application was signed on Aug. 11, 1992 and a medical
examination was performed on Aug. 22, 1992 with additional
information submitted on Aug. 25, 1992.

2. The question on the application form regarding previous
illness were all answered in the negative.

3. The medical history revealed to the examining doctor indicated
only minor medical conditions. The applicant represented that he
was in good health.

4. Based on the above the policy was issued and 19 months later
the insured passed away with advanced gastric cancer.

5. In processing the claim it became apparent that the insured
had undergone some intensive medical examinations shortly before
buying the insurance. In particular:

* a CT scan of the abdomen was done on Aug. 6, 1992.

* consultation at a Jakarta hospital on Aug. 12, 1992 and Aug.
16, 1992.

6. These important facts were not disclosed to the examining
doctor.

Based on this information it seems clear that the information
in the application was incomplete and incorrect and that material
facts were misrepresented. This is why the insurance was
canceled.

Dharmala Manulife is well respected in Indonesia for treating
all its clients fairly. In 1996 alone we paid 972 claims of all
types for a total of Rp 15 billion.

WARSITO SANYOTO,SH

In-House Lawyer

PT AJ Dharmala Manulife

Jakarta