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2025 MarsdenLR 6170
HIGH COURT MALAYA GEORGETOWN
NG AI SOOE – Appellant
Versus
HONG LEONG ASSURANCE BERHAD & ORS – Respondent
[Suit No: PA-22NCC-64-09/2023]
The court affirmed that non-disclosure of material facts in insurance applications constitutes fraudulent misrepresentation, allowing insurers to repudiate policies despite the incontestability clause after two years.
Headnote:(A) Financial Services Act 2013 - Paragraphs 5 and 13 of Schedule 9 - Life insurance policy - Claim repudiated due to non-disclosure of material facts by the insured - The doctrine of uberrimae fidei mandates utmost good faith in insurance contracts, requiring full disclosure of relevant medical history. (Paras 1, 43, 109)
(B) Burden of proof - The Plaintiff must prove full disclosure on a balance of probabilities, while the Defendants must prove fraudulent misrepresentation if claiming avoidance of the policy. (Paras 40, 92)
(C) Incontestability clause - The insurer cannot avoid a policy after two years unless fraud is proven; however, the court found sufficient evidence of fraudulent non-disclosure. (Paras 91, 104)
Facts of the case:
The Plaintiff, the widow of the deceased, challenged the repudiation of a life insurance policy by the insurer on grounds of non-disclosure of past medical conditions, including major depressive disorder and leukaemia. The Court examined the evidence and the credibility of testimonies regarding the disclosure of these conditions during the application process.
Findings of Court:
The Court found that the deceased had not disclosed significant medical history, and thus the insurer was entitled to repudiate the policy.
Issues: The main issues included whether the deceased disclosed his medical history, the role of the insurer's agents in the application process, and the applicability of the incontestability clause.
Ratio Decidendi: The court ruled that the deceased's non-disclosure of material facts constituted fraudulent misrepresentation, which justified the insurer's repudiation of the policy.
Result: Plaintiff's claim dismissed.
Introduction
[1] 'Uberrimae fidei" is a Latin phrase meaning "utmost good faith." It is a legal doctrine that requires parties to a contract to act with the highest level of honesty and transparency, particularly in insurance contracts. This means making full and accurate disclosures of all relevant facts to the other party.
[2] This case brings to fore the critical issue of whether the Plaintiff's late husband's life insurance policy was properly/ lawfully repudiated by the 1st Defendant as the insurer on account of non-disclosure and a breach of uberrimae fidei.
[3] I will in this judgment, set out the salient background facts/chronology of events leading to the commencement of this action, the parties' respective contentions as well as my analysis based on the evidence before me in determining if the Plaintiff's claim is meritorious.
Background Facts/Chronoloqy Of Events
[4] The facts of this case are not complicated and learned counsel for the Plaintiff has helpfully provided a chronology of events commencing November 2018 ie the date the Plaintiff and the deceased signed an e-authorisation/application form, right until the date the 1st Defendant (D1) repudiated the claim on 23 November 2021. The said chronology of events is annexed as Appendix A herein.
[5] From the pleadings and the trial, the salient background facts and the chronology of events can be summarised as follows.
[6] The Plaintiff is the lawful wife and executrix of the estate of the late Ooi Chong San (hereinafter referred to as "the Deceased") vide a Grant of Probate dated 16 November 2021 issued by the Penang High Court on 20 December 2021.
[7] D1 is an insurance company offering various insurance products. D2 to D4 acted at all times as agents of D1.
[8] Between November 2018 and February 2019, the Deceased [through D2 (DW1)] purchased a life insurance policy (Policy No UL 201818332354) from D1 with a death benefit of RM1,300,000.00 (hereinafter referred to as "the said life insurance policy"). The Plaintiff was nominated as the beneficiary under the said life insurance policy.
[9] It is undisputed that on 15 November 2018, the Deceased applied for the life insurance policy by completing and submitting the first proposal application to the D1 (hereinafter referred to as "proposal form") via an E-Application Authorisation Form.
[10] Of importance is cl 1 of the proposal form dated 15 November 2018 which provides as follows:
Pre-Contractual Duty of Disclosure
For consumer insurance contracts:
Paragraph 5 of Schedule 9 of the Financial Services Act 2013 (" FSA ") requires you:
(a) a duty to take reasonable care not to make a misrepresentation to us when answering any question in this proposal form; and
(b) a duty to take reasonable care to disclose to us any other matter (other than the questions in this proposal form) that you know may be relevant to our decision on whether to accept the risk which we are being asked to accept and the rates and terms to be applied.
1.2 Paragraph 5 of Schedule 9 of the FSA also prescribes that your duties set out in (a) and (b) above shall continue until the time the policy contract is entered into, varied or renewed.
* "consumer insurance contract" means a contract of insurance entered into, varied or renewed by an
individual wholly for purposes unrelated to the individual's trade, business or profession.
.....
You are advised that you should not signed this proposal form unless it has been completed to your full satisfaction as you are solely responsible for the answers given in this proposal form once it has been signed by you.
......
You are advised that you should provide full, complete and true answers in this proposal as your failure to do so may result in us avoiding any policy which may be issued pursuant to this proposal, rejecting or reducing the amount of any claim under such policy, or changing the terms of such policy."
[11] Further, reference is made to Section A of the proposal form which reads as follow
