Michael SchumanStaff Reporter of The Wall Street Journal, 21 August 2001
JAKARTA, Indonesia — The Indonesian subsidiary of Manufacturers Life Insurance Co. of Canada faces bankruptcy because of one disputed claim, highlighting the desperate need for legal reform by President Megawati Sukarnoputri’s new government.
The beneficiary of a deceased policyholder has filed a bankruptcy claim against the subsidiary at Jakarta’s commercial court and a ruling is expected on Thursday. Manulife refused to pay the beneficiary of the 50 million rupiah ($5,714) policy, claiming that the deceased failed to disclose his health problems when he applied for the policy. The policyholder passed away two years ago. In a strange legal twist, however, the beneficiary and his lawyers, instead of filing a civil complaint against the company, are trying to push Manulife’s subsidiary into bankruptcy if it doesn’t pay the claim plus damages, an amount totaling 5.1 billion rupiah.