Some AJMI customers have started terminating contracts
Some AJMI customers have started terminating contracts
A'an Suryana, The Jakarta Post, Jakarta
Some worried policyholders of insurance company PT Asuransi Jiwa
Manulife Indonesia (AJMI) have begun to prematurely terminate
their insurance contracts and seek cash withdrawals after the
Commercial Court declared the company bankrupt last Thursday.
On Wednesday, one policyholder by the name of Riana, 42 years,
told reporters that she would terminate her contract on fears
that she could suffer a greater loss if the Supreme Court
approves the bankruptcy ruling.
"I know exactly that I would be making losses as I terminate
the contract. But, by terminating the contract, at least I could
still get a portion of the investment," Riana told reporters at
AJMI's headquarters on Jl. Cikini, in Central Jakarta.
Riana had paid a total of Rp 27 million in premiums, but by
cashing in the policy prematurely, she would be subject to
penalty and would only receive Rp 16 million.
Two other policyholders also admitted that they came to the
headquarters to cash in their policies but canceled their plans
after being persuaded by AJMI's agents.
The penalty may have also discouraged the policyholders from
terminating their insurance contracts.
AJMI declined to say how many customers have terminated their
contracts since the bankruptcy ruling.
But company spokeswoman Nelly Husnayati maintained that
policyholders were still confident in the company as some have
continued making premium installments despite the controversial
court ruling.
She pointed out that between Monday and Tuesday, 64 customers
made premium installments worth Rp 229 million.
"Those are figures at our headquarters, and not included at
our branches. This underlines that the confidence of the
customers to the company are still high," she said.
Another customer, Nur Maya MM shared her view, saying that
Manulife was too big to be declared bankrupt, therefore she
decided to continue her investment at the company.
"The company is solvent. I believe that it would win the case
at the Supreme Court," she told The Jakarta Post.
AJMI is the fourth largest life insurance firm in Indonesia
with total assets of Rp 3.1 trillion and some 400,000
policyholders.
The finance ministry has said that AJMI was solvent, meaning
that its assets were sufficient to cover its liabilities.
The Commercial Court declared AJMI, the local unit of Canada's
Manulife Financial Corp., bankrupt after a receiver of the now
defunct PT Dharmala Sakti Sejahtera (DSS) filed the bankruptcy
petition over a dividend debate in 1999.
AJMI shareholders voted not to distribute dividends for 1999,
a common practice in most corporations, but the court apparently
ignored that fact.
Manulife has made an appeal to the Supreme Court, which should
have its decision ready within 45 days.
As of Wednesday, no significant numbers of customers were seen
flocking to AJMI's headquarters.
However, a sense of dismay gripped the headquarters, as the
employees wore green bands on their left arms, and banners were
seen stretched in several places, declaring that employees
rejected the ruling.
AJMI is now in the hands of a court-appointed receiver.
The company had earlier criticized the receiver for publishing
an advertisement which essentially told policyholders and other
creditors to submit their claims immediately, raising fears that
the company's assets could be squandered.