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2024 MarsdenLR 802
HIGH COURT MALAYA KUALA LUMPUR
NG EE NEE & ANOR – Appellant
Versus
PRUDENTIAL ASSURANCE MALAYSIA BERHAD – Respondent
[Writ No: WA-22NCC-5-01-2020]
The insured's failure to disclose material medical information breached the duty of utmost good faith, justifying the insurer's repudiation of the insurance claims.
Headnote:(A) Insurance Act 1996 - Sections 150 and 151 - Duty of utmost good faith - Material non-disclosure - Insured failed to disclose relevant medical information during proposal stage and medical examination, leading to lawful repudiation of insurance claims by the insurer - Allegations of fraud and forgery regarding proposal form rejected due to lack of evidence. (Paras 118, 177)
Facts of the case:
The dispute arose over repudiated insurance claims under two policies taken by the insured, who alleged non-disclosure by the insurer and forgery of her signature on the proposal form. (Paras 1, 9, 162)
Findings of Court:
The court found that the insured's failure to disclose critical medical history constituted a breach of the duty of utmost good faith, justifying the insurer's repudiation of the claims. (Paras 141, 205)
Issues: The main issues addressed included whether the insured's signature was forged and whether there was material non-disclosure of medical information. (Paras 30, 162)
Ratio Decidendi: The court ruled that the insured's undisclosed medical consultations were material facts that influenced the insurer's underwriting decision, thus justifying the repudiation. Allegations of fraud were dismissed due to insufficient evidence. (Paras 141, 177)
Result: Claims under both policies were dismissed. (Para 205)
Introduction
[1] This judgment concerns a dispute between an insured party and an insurance company over the repudiation of insurance claims under two policies. The key issues in contention are whether there was material non-disclosure by the insured that justified the insurer's repudiation of the policies, and whether there was any fraud or forgery committed by the insurer's agents in the process of obtaining the policies. The insured seeks declaratory and monetary relief, while the insurer maintains its repudiation was lawful and valid.
Background Facts
[2] The 1st Plaintiff, Madam Ng Ee Nee ("Madam Ng") had subscribed to various insurance plans from the Defendant, Prudential Assurance Malaysia Berhad ("the Defendant") through her insurance agent, Madam Lok Ai Tee ('Lok') prior to the policies in dispute in this case. On 1 March 2010, Madam Ng subscribed to a PRUlink Assurance Plan with Policy No. 34034127 ("Policy 4127") for medical insurance and an Insurance Plan for critical illness known as Crisis Shield Benefit with Certificate No. 95266419 through Lok.
[3] Madam Ng became pregnant with her daughter, the 2nd Plaintiff, Ashley Cai Ryui Enn ("Ashley"), whom she gave birth to on 9 September 2012 at Kedah Medical Centre, Alor Setar. On or about 1 December 2012, Madam Ng subscribed to an insurance plan known as 'PRUmy child' with policy number 34522881 ("Policy 2881") through Lok for the benefit of Ashley.
[4] On or about 1 February 2013, based on Lok's recommendation, Madam Ng agreed to increase the insurable limit for her critical illness coverage to RM1,000,000.00 under a policy known as 'Crisis Shield Benefit' with policy number 34564499 ("Policy 4499").
[5] Madam Ng was diagnosed with a brain tumour on 24 April 2013. She underwent a successful surgery to remove the tumour at Hua Shan Hospital in China and then returned to Malaysia.
[6] On or about 28 June 2013, Madam Ng made insurance claims against her policies with the Defendant. The Defendant approved her medical insurance claim for RM100,000.00 on 25 March 2014 and her critical illness insurance claim for RM150,000.00 on 20 March 2014.
[7] However, the Defendant rejected Madam Ng's claim under Policy 4499 for the extended RM1,000,000.00 critical illness coverage, even while continuing to charge premiums for a few months after. The Defendant also rejected Ashley's entitlement for the "PRUmy child" benefit under Policy 2881.
[8] In letters dated 25 April 2014 and 15 May 2014, the Defendant stated the reasons for the repudiation of the claims. For Policy 4499, the Defendant stated that there was suppression of material information by Madam Ng in the proposal form dated 7 January 2013 and during a medical examination conducted by the Defendant's panel doctor recorded in a Statement to the Medical Examiner dated 13 January 2013 ("SME"). For Policy 2881, the Defendant stated that there was non-disclosure in the proposal form dated 16 November 2012 signed by Madam Ng on behalf of Ashley.
[9] The Plaintiffs commenced this suit against the Defendant on 31 December 2019. In the original Writ and Statement of Claim, the Plaintiffs sought declarations that the Defendant wrongfully repudiated the claims under Policy 4499 and Policy 2881, an order for the Defendant to pay Madam Ng the RM1,000,000.00 under Policy 4499 with interest, an order for Ashley to continue receiving coverage under the "PRUmy child" benefit, special damages, general damages, exemplary damages, costs and other relief.
[10] On 28 January 2020, the Plaintiffs' solicitors sent a letter requesting from the Defendant's solicitors the copies of the relevant proposal forms signed by Madam Ng. On 28 February 2020, the Defendant's solicitors sent over copies of several proposal forms, including the Proposal Form No. 101040171 dated 7 January 2013 ("Proposal Form 171") related to Policy 4499.
[11] On 12 June 2020, when the Plaintiffs filed their Reply to the Defendant's Defence, the Plaintiffs
