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2025 MarsdenLR 6353
HIGH COURT MALAYA KUALA LUMPUR
SINNAMAH MUNISAMY – Appellant
Versus
GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD – Respondent
[Civil Suit No: WA-22NCC-301-07/2021]
Insurers are entitled to avoid life insurance policies for material misrepresentations regarding income and occupation, underscoring the duty of utmost good faith in insurance contracts.
Headnote:(A) Financial Services Act 2013 - Paragraphs 5(1), 5(2), 15 - Life insurance dispute - Claim for death benefits rejected on grounds of material misrepresentation of income and occupation in proposal forms - Court examines duties of utmost good faith, materiality of disclosed information, and burden of proof for non-disclosure. (Paras 1, 2, 34, 168)
(B) Utmost good faith - The insured must provide accurate information; failure to do so justifies policy avoidance and claim rejection. (Paras 90, 91, 172)
(C) Material misrepresentation - Misrepresentation of annual income and occupation found significant; insurer's reliance on inaccurate representations legally justifiable despite agent's negligence. (Paras 55, 170)
| Table of Content |
|---|
| 1. life insurance dispute concerning misrepresentation and duty of disclosure. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. facts regarding the purchasing of insurance policies and claims. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. legal representation following the death of the policyholder. (Para 17 , 18 , 19) |
| 4. plaintiff's arguments against the insurer's repudiation. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 5. defendant's argument focusing on misrepresentation and duty of good faith. (Para 27 , 28 , 29 , 30 , 31) |
| 6. issues framed for court deliberation regarding proof of non-disclosure. (Para 34 , 35 , 36) |
| 7. weight of hearsay evidence in determining insurance claims. (Para 40 , 41 , 42 , 43 , 44) |
| 8. materiality and influence on the insurer's decision. (Para 45 , 46 , 47 , 48) |
| 9. assessment of income declaration affecting insurance policy validity. (Para 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58) |
| 10. final ruling on misrepresentations and dismissal of the plaintiff's claim. (Para 168 , 169 , 170 , 171) |
[1] This judgment concerns a life insurance dispute arising from the rejection and avoidance of three insurance policies by an insurer following an early death claim. The case involves the fundamental principles of utmost good faith and material disclosure in insurance contracts, specifically whether the insured person made misrepresentations regarding his income and occupation in the insurance proposal forms
[2] The central issues before this court relate to the burden of proof required to establish non-disclosure of material facts, the honesty and sincerity of the information provided by the Life Assured, and whether the insurer waived its right to rely on the alleged misrepresentations.
[3] The deceased Life Assured had purchased three separate life insurance policies with a total death benefit of RM2,000,000.00, declaring himself as a business person managing a transport business with substantial annual income ranging from RM200,000.00 to RM400,000.00. Following the Life Assured's death from natural causes within months of policy inception, the insurer conducted investigations that allegedly revealed discrepancies between the declared income and occupation versus the Life Assured's actual financial circumstances.
[4] The insurer subsequently rejected all death benefit claims and repudiated the policies, citing material misrepresentations in the proposal forms that breached the duty of utmost good faith. The beneficiaries contested this decision, arguing that the investigation report lacked evidential value, that any discrepancies were not material to the risk, and that the insurer had waived its right to complain about non-disclosure through its conduct.
[5] This case therefore requires the court to examine the delicate balance between an insured's duty to make full and accurate disclosure of material facts and an insurer's reliance on such information in underwriting decisions. The resolution of these issues has significant implications for the insurance industry's practices regarding policy avoidance and the enforceability of death benefit claims
[6] The court must ultimately determine whether the evidence supports the insurer's decision to avoid the policies or whether the beneficiaries are entitled to the substantial death benefits claimed.
Background Facts
[7] The Life Assured, Kumaresan A/L Kovilan, purchased three separate life insurance policies from the Defendant, Great Eastern Life Assurance (Malaysia) Berhad, during the course of 2017. The first Insurance Policy, numbered 102550242-1, commenced on 12 July 2017 with a basic sum assured of RM500,000.00 and a monthly premium of RM500.00. The second Insurance Policy, numbered 102573408-6, commenced on 21 August 2017 with a basic sum assured of RM500,000.00 and a monthly premium of RM540.00. The third Insurance Policy, numbered 102597015-1, commenced on 28 September 2017 with a basic sum assured of RM1,000,000.00 and a monthly pre
