An elderly Indonesian couple have started their court case against insurer AIA over a fake insurance policy they were sold by a rogue AIA agent for US$5.06 million in 2002.
On the first day yesterday, the battle lines were drawn as the couple - permanent residents here - pressed their case that AIA should have known what was going on.
But AIA has countered that the couple expect the insurer to do what no firm anywhere can do: eliminate fraud completely.
AIA also claims disgruntled customers Mr Ong Han Ling and his wife Enny Ariandini Pramana, both 77, are in a conspiracy with former AIA agent Sally Low to defraud AIA.
In a twist to the case, despite AIA alleging that the three are in a conspiracy, the insurer has asked Low to be its witness. Latest court documents stated that AIA appeared to have paid $35,000 to legal firm JLC Advisors to procure Low's affidavit.
The Ongs commenced this legal suit in 2012 against AIA and Motion Insurance Agency for negligence and breach of duty of care when handling their insurance matters, as well as asserting AIA's vicarious liability for Low's fraudulent acts.
The saga so far
The saga of the fake AIA Thank You policy began in late 2002, when businessman Ong Han Ling, 77, was allegedly sold the five-year plan by former top AIA agent Sally Low Ai Ming, 38, at a cost of US$5.06 million (S$7.2 million).
The money was paid by Mr Ong in five tranches into an AIA bank account in November 2002 for what he believed was a plan for selected customers. The Ongs were allegedly told by Low that they would receive guaranteed annual fixed returns of 6 per cent and 7.5 per cent, compounded yearly, on the US dollar and Sing dollar components of the plan.
This would have meant sums of US$4.95 million and $4.5 million upon maturity.
Mr Ong claimed that after getting the money, Low, without his knowledge or consent, used the funds to buy five AIA policies for himself, his wife and his daughter, effecting the purchases by submitting forged documents to AIA.
He alleged that midway through the tenure of the AIA Thank You policy, Low deceived him into giving the insurance proceeds from three of the unauthorised policies to her. Low's scheme came to light in 2008, after Mr Ong learnt from AIA that the Thank You policy was bogus.
AIA made a police report against Low and sacked her in December 2009. Mr Ong also made a police report against Low in January 2010 for allegedly cheating him of various sums of money. He sued Low for damages amounting to US$2.25 million and $2.99 million.
Low counterclaimed that the fake policy was part of a ploy cooked up by Mr Ong for both of them to defraud AIA for financial gains. In May 2011, she was charged with 19 criminal charges, including charges for cheating the Ongs, using forged documents and money laundering.
Although she was charged nearly five years ago, the matter has still not come up for hearing. So far, she has had six sets of lawyers acting for her and her sentencing date has been postponed several times. She admitted herself to the Institute of Mental Health, but was certified as fit to plead and stand trial. In December 2013, Low pleaded guilty to four criminal charges, but retracted her guilty plea six months later.
The couple wish to claim damages amounting to between $4.2 million and $7.2 million. They claimed that AIA and Motion breached a duty of care owed them - thereby causing loss to them. These duties included providing a sound internal system to detect and prevent fraud.
The Ongs alleged the firms failed to verify directly with them when five tranches of the AIA Thank You premiums of US$5.06 million did not match premiums payable for the unauthorised policies, resulting in suspiciously large refund cheques not being encashed for a long time.
Low also appeared to have been given free rein in managing these funds, allegedly giving instructions to AIA to issue the unauthorised policies. AIA has counterclaimed against the Ongs by alleging they are part of a conspiracy with Low.
The insurer stated in court documents: "The plaintiffs (the Ongs) expect AIA to achieve what no other company in the world can achieve, that is, AIA has to prevent fraud. This is not possible and would turn the entire industry on its head."
Yesterday, AIA's lawyer Wendell Wong of Drew & Napier cross-examined Health Sciences Authority handwriting expert Yap Bei Sing, who produced an expert report to be used by the Commercial Affairs Department in a long pending criminal case against Low.
AIA also appointed its own handwriting expert Daniel Wong.
The court documents stated that both experts agree that the numerous documents purportedly signed by the Ongs were forged.
Taking the witness stand after the Chinese New Year holidays will be former NTUC Income chief executive Tan Kin Lian. He has been called to be an industry expert by Mr Ong's lawyers KhattarWong.