Holders of fake $7m insurance policy sue AIA

Mr Ong Han Ling and wife Enny Ariandini Pramana with the files of documents they have accumulated in their legal battle against AIA after former agent Sally Low allegedly sold them a bogus policy. They said they learnt that the policy was fake only w
Mr Ong Han Ling and wife Enny Ariandini Pramana with the files of documents they have accumulated in their legal battle against AIA after former agent Sally Low allegedly sold them a bogus policy. They said they learnt that the policy was fake only when they asked about maturity payouts.ST PHOTO: AZIZ HUSSIN
A copy of the fake policy. The agent, Sally Low, who was under the management of AIA-related firm Motion Insurance Agency then, was sacked by AIA in December 2009. She now faces allegations of fraud and cheating, including fraudulent use of forged do
A copy of the fake policy. The agent, Sally Low, who was under the management of AIA-related firm Motion Insurance Agency then, was sacked by AIA in December 2009. She now faces allegations of fraud and cheating, including fraudulent use of forged documents and forging signatures. ST PHOTO: AZIZ HUSSIN

Couple claim negligence; agent allegedly used premium to buy policies in their names

An elderly couple caught in a fake US$5 million (S$6.7 million) insurance plan are suing insurer AIA and a related agency in the High Court.

Mr Ong Han Ling and wife Enny Ariandini Pramana, both 76, are suing AIA for negligence and lack of care when handling their policy premium of about US$5 million.

The money was paid by Mr Ong in five tranches to an AIA bank account in November 2002 for what he believed was a plan for selected customers called the AIA Thank You policy. The Ongs, who are Indonesians and Singapore permanent residents, were told by then AIA agent Sally 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 Singdollar components of the plan.

This would have worked out at maturity to sums of US$4.95 million and $4.5 million.

Mr Ong said in court documents he learnt from AIA that the Thank You policy was bogus only when he made inquiries about the maturity payouts due in January 2008.

  • The irregularities cited by the Ongs include large sums of money remaining idle in the AIA account for about four to six months before it was used to buy unauthorised policies in the clients' names.

Low, who was under the management of the AIA-related firm Motion Insurance Agency then, was sacked by AIA in December 2009. She now faces allegations of fraud and cheating, including fraudulent use of forged documents and forging signatures, including that of Mr Mark O'Dell, then AIA's Singapore general manager .

Motion is headed by Mr Rayner Lee, whose wife is Ms Mary Chen Ming Li, also a top AIA agent.

It is alleged that Low used the premium for the fake Thank You policy and forged documents to buy four AIA policies in the names of Mr and Mrs Ong and their daughter without their knowledge or authorisation.

The Ongs claim that Low appeared to have been given free rein in managing these funds, allegedly giving instructions to the insurer to issue the unauthorised policies.

They further claim that AIA and Motion failed to put in place a system of checks and controls to supervise her and to prevent forgery.

The Ongs also allege that the firms failed to verify directly with the couple when they should have realised numerous irregularities with respect to the application of monies paid by Mr Ong into the AIA account. Had they done so, he claims, the scam could have been uncovered earlier.

The irregularities cited by the Ongs include large sums of money remaining idle in the AIA account for about four to six months before it was used to buy unauthorised policies in the clients' names.

They point to US$1,306,900 that remained in the account for four months. There were also large sums of refund cheques issued by AIA that were not cashed by the Ongs as they allege they never received them. This money remained idle in the account for up to 13 months.

A key issue for the court is deciding whether the insurance company was acting reasonably and in line with its fiduciary responsibilities when it allowed Low to give directions over the customer's money without verifying and confirming their instructions.

 

AIA has stated in legal documents that it is a "reasonable and normal course of business conduct" for funds to be left in accounts for reasons such as time taken for customers to consider applying other policies and for future premium payments.

It also told The Straits Times that it would not be appropriate to comment while legal proceedings are under way in the High Court.

"We take the allegations seriously and are working closely with our lawyers to respond appropriately to the legal suit," said the insurer.

AIA had applied to the court to strike out the Ongs' suit on various grounds but were unsuccessful and the matter is now heading for trial. This is expected to start in February next year.

The Ongs are represented by Ms Deborah Barker and Mr Haresh Kamdar of KhattarWong, while AIA's lawyers are from Drew and Napier, with Mr Wendell Wong as the lead counsel.

A version of this article appeared in the print edition of The Straits Times on July 07, 2015, with the headline 'Holders of fake $7m insurance policy sue AIA'. Print Edition | Subscribe