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2025 MarsdenLR 83
HIGH COURT MALAYA GEORGETOWN
NG AI SOOE – Appellant
Versus
HONG LEONG ASSURANCE BERHAD & ORS – Respondent
[Suit No: PA-22NCC-64-09-2023]
Insurers have the right to repudiate a life insurance claim if the insured fails to disclose material medical history, violating the duty of utmost good faith defined in the Financial Services Act 2013.
Headnote:(A) Financial Services Act 2013 - Paragraph 5 of Schedule 9 - Duty of disclosure in insurance contracts - Concept of 'uberrimae fidei' necessitates full disclosure of material facts to the insurer. (Para 1-2)
(B) Non-disclosure - Whether non-disclosure of medical history warranted repudiation of insurance policy. Court found Plaintiff failed to prove full disclosure of material health issues, which justified insurer's actions. (Paras 88-121)
(C) Incontestability clause - Clause is inapplicable where fraudulent non-disclosure is established. (Paras 91-109)
Facts of the case:
The Plaintiff’s late husband applied for a life insurance policy but failed to disclose previous health issues, leading to the insurer's repudiation after his death. The insurer contested the claim based on asserted non-disclosures.
Findings of Court:
The Court determined that the Deceased failed to disclose significant medical information, thus justifying the insurer's repudiation of the policy.
Issues: The main issues were centered around whether the Deceased disclosed his medical history at the time of the policy application, and whether the insurer could repudiate the policy under the incontestability clause.
Ratio Decidendi: The Court emphasized that the duty to disclose material facts in insurance contracts is ongoing and critical, validating the insurer's reliance on non-disclosure to avoid the policy.
Result: Plaintiff's claim dismissed.
| Table of Content |
|---|
| 1. definition of uberrimae fidei in insurance. (Para 1 , 2 , 3) |
| 2. chronology and details of the insurance policy. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22) |
| 3. details of the death claim submission and response. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 4. plaintiff's claims concerning disclosure and agent's role. (Para 31 , 32 , 33 , 35) |
| 5. defendants' stance on non-disclosure basis for repudiation. (Para 34 , 39) |
| 6. burden of proof in insurance disputes. (Para 36 , 40 , 41) |
| 7. importance of full and frank disclosure in contracts. (Para 42 , 43 , 44) |
| 8. critical issue of disclosure regarding medical history. (Para 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58) |
| 9. arguments regarding illiteracy and responsibility. (Para 59 , 60 , 61 , 62) |
| 10. court's consideration of the agent's credibility and records. (Para 63 , 64 , 65 , 66 , 67 , 68 , 69) |
| 11. evidence of non-disclosure and its implications. (Para 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78) |
| 12. plaintiff's counterarguments and evidence gaps. (Para 79 , 80 , 81 , 82 , 83 , 84) |
| 13. incontestability clause and its relevance to fraud. (Para 90 , 91 , 92 , 93 , 94 , 95 , 96 , 97) |
| 14. court's conclusions on fraud and application of laws. (Para 98 , 99 , 100 , 101 , 102 , 103) |
| 15. role of agents and the responsibility for disclosures. (Para 104 , 105) |
| 16. conclusion on repudiation based on uberrimae fidei. (Para 106 , 107 , 108) |
| 17. outcome of the case and dismissal of the plaintiff's claim. (Para 118 , 119 , 120) |
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 the 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/ Chronology 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-Contra
