Hearing starts for US$5m suit against AIA

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 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 Khattar Wong.

lornatan@sph.com.sg

This article was first published on Feb 3, 2016.
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