Manulife agrees to pay settlement to plaintiffs
JAKARTA (JP): Life insurance firm PT Asuransi Jiwa Manulife Indonesia (AJMI) agreed on Monday to pay the rupiah equivalent of US$680,000 to an insurance policy holder and her beneficiaries on Tuesday, in an effort to settle a bankruptcy suit brought against the firm.
Representing Manulife, lawyer Palmer Situmorang handed a Citibank check worth $680,000 to the Jakarta Commercial Court on Monday and requested it be handed over to the plaintiffs, Monica, Marcellina and Protus.
The plaintiffs are children of the man insured, the late Paulus Tanuhandaru, who died in 1994 of pancreatic cancer.
"I cannot accept this check just like that, Your Honor. I request the court to ask Manulife's lawyers to accompany me while I cash the check. Whether I am able to cash the check or not, we can inform you today," the plaintiffs' lawyer, Lucas, told the hearing, presided over by Judge Mahdi S. Nasution.
Judge Mahdi adjourned the hearing until 2 p.m. on Monday but it reconvened at about 3 p.m.
Lucas told the hearing that Citibank had been unable to come up with the dollar reserves.
In response, Manulife representatives spoke with their lawyer, after which Palmer informed the court that the firm was willing to pay the rupiah equivalent of the settlement offer on Tuesday.
"Our client is willing to pay the rupiah equivalent," Palmer said.
Manulife had earlier won an initial civil lawsuit filed against it by the same insurance holder at the district court in 1998 and at the high court in 1999.
The bankruptcy suit was filed on Nov. 7 this year over the firm's decision to refuse to pay US$500,000 in insurance claim to the plaintiffs.
Paulus died at the age of 54 in March 1994, nearly two years after the life insurance firm -- formerly PT Asuransi Jiwa Dharmala Manulife -- issued the policy in August 1992.
"The plaintiffs have suffered $680,000 in material losses as a result of Manulife's disobedience ... Manulife has violated Article 1234 of the Civil Code on binding agreements," Lucas told the hearing presided over by Judge Mahdi.
"We demand Manulife pay $680,000 to the plaintiffs for losses caused ... $500,000 is the sum insured. The balance $180,000 is the (six percent) interest accumulated in the past five years."
While Paulus' three children are beneficiaries, the policy holder is Marcellina.
The policy was issued after physical examinations conducted by two doctors appointed by the insurance firm gave Paulus a clean bill of health, Lucas said.
"Marcellina made five quarterly premium payments of $5,075 beginning from Aug. 11, 1992. The last payment was made on March 29, 1994, the day her father died," Lucas said, quoting a court document dated Nov. 7 this year.
Manulife chief director, Adhie Purnomo Widjaya, officially declined to make the $500,000 payment to the policy holder in July 1994, reneging on what was stated in the policy Manulife had issued. The rejection letter was signed by Adhie in his capacity as chief director, Lucas said.
Paulus was diagnosed with pancreatic cancer in January 1993 by the Gatot Subroto Army Hospital here, about five months after the policy was issued by Manulife.
Marcellina said she filed a lawsuit against Manulife at the Central Jakarta District Court in December 1997 but the court dropped the suit in March 1998.
In April that year, she reported Adhie Purnomo and Manulife- appointed doctor Daldiono to the National Police Headquarters on fraud charges and filed an appeal with the Jakarta High Court.
With doctors appointed by Manulife refusing to testify, the High Court dropped the lawsuit as well. Marcellina has since appealed to the Supreme Court.
In a statement delivered to The Jakarta Post, technical advisor Piers Gillespie of Manulife Financial said that the insurance policy was not paid out due to the policy holder not disclosing a pre-existing medical condition, prior to taking out the policy.
"It was this pre-existing medical condition that was the contributing factor to the policyholder's death, and had PT AJMI been aware of this medical condition, the policy would never have been issued," Piers said.
Insurance bankruptcy case observer Suwandi Halim from the Indonesian Consumers Foundation for insurance problems (YLKAI) said on Monday that Manulife's mistake was in not conducting an investigation at the time Paulus was diagnosed with pancreatic cancer, in January 1993.
"That was about four or five months after the policy was issued, and Manulife knew this. Why did not Manulife investigate the matter then?" Suwandi said.
"Why was it that Manulife accept premiums from the policy holder, even on the day the insured died?" (ylt)