Manulife agrees to pay settlement to plaintiffs

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)